How Much Does Salesforce Cost?

The journey of implementing Salesforce within your company is, likely, to begin with figuring out how much does Salesforce cost. It’s a good place to start, considering that the pricing listed on the Salesforce.com website isn’t exactly straight forward; especially when you factor in all the different editions. Even once you get the licensing cost sorted out; it’s still only half of the equation.

The good news is that I’ve helped many of our clients through the very same journey, and with that experience, I’ve put together this article. My hopes for this article is that it’ll help light the way for you as you go through the process of purchasing Salesforce for your organization.

Before we continue it’s important to note that my focus will be on Salesforce Sales Cloud; the CRM offering. Salesforce does have a number of other offerings, but the information in this article can be applied to any of them. Now, let’s talk about what you’re really buying.

What Are You Really Buying?

Compared to most other software, Salesforce can seem rather expensive; especially when it appears that there are at least a dozen alternatives that can be purchased at a fraction of the price. I agree with you; when you think of Salesforce as just another CRM system it does, in fact, seem pricey. Heck, if you’re a small business just looking for some basic CRM software that’s economical then something like Zoho CRM is likely a better fit anyway.

However, unlike alternatives, Salesforce is a robust and customizable platform for sales and business automation. It’s alternatives if you can call them that simply pale in comparison. Salesforce, when leveraged correctly, won’t be just another cost as with most other technology in IT. Instead, it’ll be an investment becoming a center for value creation within your organization. Great right? But how much does Salesforce cost?

Current Salesforce Licensing Cost

Although Salesforce has several editions only two really matter; Professional and Enterprise. And actually, until recently, Professional Edition didn’t really matter either. It lacked most of the automation functionality that sets Salesforce apart from its competition. Our “go-to” edition for the longest time was Enterprise, but now, with the new “Lightning Editions”, Professional is certainly worth consideration. Let’s take a look at each of the editions.

• SalesforceIQ CRM Starter | $25/user/month - This isn't Salesforce; it's separate software that was built by a recently acquired company called "RelateIQ". While it has some neat features I would consider this on-par with Zoho CRM, or Nimble CRM.
• Lightning Professional | $75/user/month - This is the real deal, and with it's recently included workflows and approvals functionality it's serious value for the price.
• Lightning Enterprise | $125/user/month - As mentioned by Salesforce, this is the most popular edition. It's the edition 90% of our clients are on. Enterprise Edition includes everything Salesforce has to offer.
• Lightning Unlimited | $300/user/month - Think Enterprise with higher limits. Unless you plan to run your entire company, meaning every department, it's hard to justify this tier. None of our clients use this edition.

Like I said the choice really comes down to Professional or Enterprise. If you can, spring for Enterprise; especially if you need any of the following features. Otherwise, go with Professional.

• Territory Management
• Advanced Forecasting
• Team Selling
• Advanced Customizations
• Custom App Development
• Custom Integration to Other Systems (API)

Please note that, even though the prices listed are on a monthly basis, you’ll be billed annually. So just be prepared to cut a check for your first full year when you get started.

Buying Your Salesforce Licenses

Now that you’ve got ballpark numbers on pricing (users X monthly) I wanted to share some advice on purchasing your licenses. These are just a few of the tips I’ve picked up, along the way, while helping other clients through the purchase process.

Save Money on Licenses by Purchasing Only What You Need

Despite what a Salesforce sales rep might say, you can actually mix some of your license types based on the needs of each user, within your organization, to save some money. In addition to the sales cloud licenses mentioned above, there’s also App Cloud licenses. App Cloud licenses can be purchased and used in conjunction with your Sales Cloud licenses. App Cloud licenses give you access to pretty much everything in Salesforce minus sales specific functionality such as leads, opportunities, forecasting, etc…

Let me explain with an example. Let’s say that, within your company, you have 10 sales reps and 5 customer support agents that you would like to use Salesforce. Well instead of purchasing 15 Enterprise Edition licenses at $150 a pop you could actually get away with buying 10 Enterprise Edition licenses for your sales reps, and 5 App Cloud licenses for your customer support agents. The entry level pricing for app cloud is $25/user/month. I’m sure you’re beginning to see how quickly these savings could add up.

Negotiating Your License Pricing

Now that you’ve saved some money by mixing up you licenses it’s time to take things a little further. We can shave off some additional savings by negotiating our licensing rates. Although discounts vary from deal to deal I don’t think I’ve ever seen a client pay full list price for their licenses. In my experience, you can typically knock 10-25% off monthly licensing fees. The two biggest negotiating factors are the number of licenses, and the number of years you commit; three years being the max. Basically, you’ll be able to get a much better deal if you’re buying 100 licenses with a 3-year commitment than if you were to buy 10 licenses under a 1-year commitment. Lastly, as with most sales organizations, you’ll have much better luck negotiating near the end of a quarter due to sales reps pushing to meet their quotas.

To give you a real life example. One of our clients were able to purchase 125 Sales Cloud Enterprise licenses under a 3-year commitment at $90/user/mo for a total savings of $270,000. This more than covered their implementation costs. So whenever you’re ready to buy your licenses be sure to employ some of these tips so you, too, can get a good deal.

Salesforce Implementation Cost

Once you’ve worked out a deal with Salesforce for your licenses, the next thing you’ll want to consider is your implementation cost. Unless you’re a small company, with less than 5 users on Professional Edition, you’ll likely need some help getting Salesforce implemented within your organization. This is mainly to ensure you get the most out of your investment.

I will be writing a detailed article on the cost of implementation, and the implementation process. Until then let me give you some rough numbers. For a standard implementation with no advanced development/customization, you can expect to spend around $10,000. My team and I typically work on implementations involving a lot of heavy custom development so the average project hovers at $50,000 or so. Although we don’t usually bill for our services by the hour, our hourly rate would break down to about $200/hr. This should help give you a comparison in your search for a Salesforce implementation partner.

Although dependent on the size of your team the last cost you may need to consider is for a Salesforce administrator.  This will be the person who handles your day to day support. You can typically get this support from your Salesforce partner for a monthly fee, but if your team is big enough it may make sense to hire a full-time administrator. A full-time Salesforce administrator will run you $60,000 – $100,000 annually depending on experience, and what part of the country you’re in.

Summary

So there you have it; you now have an answer to “how much does Salesforce cost”. I hope that this article helps shed some light on what you can expect to spend once you go down the Salesforce rabbit hole. Aside from the cost, though, the primary thing I want you to remember is that money spent on Salesforce is an investment. It’s a platform that can actually deliver on the value it promises, and that your organization needs. It’s expensive for a reason; because it’s worth it. If you do decide to pull the trigger, and make the investment I hope my tips will help you get the best deal possible.

Until next time I’d appreciate your feedback. I’d especially love to hear your thoughts on the cost of Salesforce. Do you think Salesforce is expensive? Do you think it’s worth it? Leave your comments below. Take care!