How to Prepare for a Successful SELA Negotiation

We explored Salesforce’s motivation to land more SELA deals in the first part of this series – spoiler alert – the SELA provides Salesforce more ways to be creative with regard to fee increases, adding products into your portfolio, and ultimately increasing their revenue and profit margins.

We also explored some common painful scenarios as well as things to look out for when considering a SELA. Themes such as a lack of consideration for usage costs, excitement over new products that are not market ready, deals that include overcommitting to products/volumes, etc,. seem to always be there.

Now that we have an understanding of Salesforce’s motivations and key tactics that they employ, it’s time to explore how to use these insights in order to negotiate your SELA and set up your organization for long-term success.

SELA Negotiations: Insights for Success

1. It’s imperative that you prepare for your negotiation as soon as possible.

Whether you’re renewing or considering moving into a SELA for the first time, it will take a lot of time to fully understand what Salesforce will be proposing. Even if you had all of the transparency last time, each SELA is going to be a custom deal based upon the product portfolio that is included. With Salesforce’s ever-changing product portfolio comes changes in subscription models and how products are consumed, meaning there will be a lot to take in.

Remember, you also have a product portfolio to evaluate and a roadmap to determine. Giving yourself ample time to explore not only the capabilities you aren’t using but  also what is actually being used can be impactful. Are you receiving the full and expected value that your organization was sold on when you made the purchase? Are there more capabilities that need to be unlocked?

2. Ensure you have a firm grasp on what it will actually take to deploy each capability of every solution.

It’s very easy to get excited about the possibilities a new software can bring to your organization. Remember, Salesforce will be happy to sell you a solution with zero input into how you would actually implement it. And if they’re pitching their implementation services, know that rolling things out will almost certainly require more effort and time than they’re alluding to.

As you prepare to draft the SOW, it’s crucial to safeguard against unnecessary expenses. However, it’s vital to comprehend the requirements thoroughly before getting to the negotiation table. Acquiring a clear understanding is empowering and essential for effective decision-making.

3. Be prepared to deal with an overwhelming amount of changes.

Salesforce will aim to add confusion and layers of complexity to navigate when it’s time to renew. Product metric changes, naming changes, sunsetting of certain products, folding sunsetted functionality into new products that you need to adopt, etc., are just some of the things you will be dealing with. With Super Messages as an example, if metric changes aren’t enough to deal with, Salesforce is now imposing the right to make changes to those metrics on the fly (i.e., throughout the course of your term), which could have significant implications on your ongoing demand and needs (after your deal is signed!).

Given SELAs will likely have a bundled pricing and/or fee structure, these types of changes to the underlying details create more opportunities for Salesforce to manipulate things in their favor. Being able to understand the nuances is just the beginning – having the resources in-place to execute a counter plan (from both a negotiation and technical standpoint) is important.

4. Use everything you learned to acquire transparency, and negotiate both protections and flexibility.

It’s critical to understand the mechanics behind the deal that you’re looking to sign. What are the underlying pieces that add up to your bundled SELA? What is the value tied to each of those components? You need to know these things, especially if you ever want to think about right-sizing or making any changes. Knowing what proper protections and flexibility looks like is also key. How can you be sure that you have the flexibility to maximize your purchase, while also protecting the future in case your needs do change?

The Bottom Line with SELA Negotiations

In navigating the complexities of a SELA negotiations, the key to success lies in thorough preparation and strategic foresight. Understanding Salesforce’s motivations and the potential pitfalls of SELA negotiations is crucial. Empower yourself with knowledge about the products, their deployment, and the flexibility and protections needed in your agreement. This preparation not only fortifies your negotiation stance but ensures you can adapt to unforeseen changes, safeguarding your organization’s interests in the long term.

Bringing a trusted third-party advisor into the conversation can significantly enhance your negotiation strategy. They offer a clear perspective on what success looks like and provide valuable insights from other organizations’ experiences, ensuring you’re not navigating these complex waters alone. Remember, a successful SELA negotiation is not just about securing a deal; it’s about setting a course for your organization’s future resilience and growth. With the right approach and expert advice, you’re well-equipped to turn these negotiations into a strategic advantage.

At UpperEdge, we help clients understand their Salesforce proposals and navigate whether a SELA construct is the right fit while maintaining a strategic relationship with Salesforce. For more on how we can help, explore our Salesforce Advisory Services.