Don’t Let Divestitures Undermine Your Salesforce Negotiation

In an ever-changing business landscape, there are many scenarios that organizations need to plan for as Salesforce renewals approach. An important one that we see play out quite often are divestitures. Because divestitures often create immediate changes in ownership, usage, and licensing needs, ensuring early communication with Salesforce is essential to prevent these shifts from becoming negotiating disadvantages.

Communication is also vital because it ensures fewer surprises as you negotiate with your vendor. This is especially the case with Salesforce, as they are very good at siloing organizations that are going through similar scenarios. In this blog, we walk through the divestiture situations organizations most commonly encounter and provide guidance on how to navigate each one successfully.

Divestiture Since Your Last Renewal

When planning for scenarios where the divestiture has happened since last renewal (i.e., lower volumes left over at the upcoming renewal) the following questions are important to keep in mind:

• Has the divested entity already begun discussions with Salesforce to ensure transition services have been (or are being) utilized appropriately?
  • Many technology vendors like Salesforce offer robust transition services for organizations that are going through and have been through similar scenarios.
  • If the respective vendor has not come forth with this information, this can be leveraged during the negotiation as a focal point around what should be offered by the vendor.
• Have there been conversations around what the new needs will be at renewal? Have these been communicated/discussed with SFDC?
  • SFDC inherently has the ability to monitor nearly all of the product/subscription usage across the client’s portfolio. However, a common tactic used by the vendors is to act surprised when significant reductions show up at renewal. The biggest way to combat this is through early communication, typically from relationship owners, outlining the needs for reductions.

Divestiture Before or During Renewal Negotiations

The following outlines how to plan for scenarios where a known divestiture is about to happen and will happen before/during renewal negotiations:

• These scenarios require additional attention as there will be two entities by the end of negotiations (typically one “net-new” relationship, as well as the post renewal relationship from the remaining entity).
• In this scenario, it is critical to ensure that there are two relationship owners running the negotiation and extensively planning the needs of each organization with respect to which products and services will be needed moving forward.

Divestiture During the Upcoming Term

Here is how to plan for scenarios where you think a divestiture might happen during the upcoming term (i.e., after you upcoming renewal)

• While this scenario is somewhat rarer than the above two scenarios, the key again is early planning with regard to upcoming needs.
• In addition, it will be important to put in place and negotiate the need for robust transition services, while outlining that this comes from a place of understanding that large changes could be on the horizon and the organization would like to prepare appropriately.

Moreover, the key to success when planning for a divestiture at any scale is early and extensive preparation on the part of the remaining and divested (or soon to be divested) organizations. That way, there are no unexpected surprises when it comes to the actual negotiations.

We have seen time and time again, organizations typically are not thinking closely about their Salesforce relationship prior to divesting, which allows Salesforce to effectively “steamroll” each entity into losing many of the concessions they had negotiated prior to the split.

This is something UpperEdge excels at assisting and working through as part of our services. To ensure your organization is fully prepared for its upcoming Salesforce negotiations, explore how our Salesforce Advisory Practice can support you: Learn More.