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With the growing adoption of Salesforce across organizations of all sizes, management of Salesforce licenses and costs has become a crucial task. Salesforce licenses account for a significant portion of the total cost of Salesforce ownership. According to a study, nearly 37% of companies admit to overspending on Salesforce by purchasing more licenses than they need.
In this blog post, we will discuss effective strategies that can help you optimize your Salesforce licenses and achieve cost savings of up to 30%. Some of the key strategies we will cover include consolidating multiple organizations, identifying and removing inactive users, aligning user licenses to actual usage, and employing configuration tools to automatically track license usage.
Implementing these strategies requires some effort upfront but can provide great long-term returns. The cost savings achieved can be invested in purchasing additional capabilities, training employees, or funding innovations. With a well-defined approach to Salesforce License Optimization, you can make sure that you are making the most of your investment using this powerful platform. So, let’s get started!
What is Salesforce License Optimization and why is it required?
Salesforce license optimization refers to the practice of continuously managing your Salesforce user licenses to align with your current business needs and reduce overall licensing costs.
As companies grow and evolve, Salesforce usage patterns and user requirements also fluctuate. However, Salesforce license purchases, renewals, and assignments often happen in siloed teams without centralized oversight. Over time, this causes overbuying, underbuying, and inefficient allocation of Salesforce licenses.
How Can You Lower Salesforce Subscription Costs and Make Better Use of Your Contract?
Reducing Salesforce subscription costs and expanding the value of your contract can be achieved through several strategic approaches. Here are some efficient approaches for accomplishing this:
- Regular License Audit:
Conduct a thorough audit of your Salesforce licenses to identify underutilized or unnecessary subscriptions. This involves analyzing user activity and aligning license types with actual user needs. By right-sizing licenses, you can eliminate unnecessary costs. - Negotiate with Salesforce:
Engage in negotiations with Salesforce to explore opportunities for better pricing or more favorable contract terms. This could involve consolidating licenses, adjusting subscription levels, or discussing alternative pricing structures based on your organization’s specific needs. - Utilize Available Features:
Ensure that your organization is fully utilizing the features and capabilities included in your Salesforce subscription. This may involve providing training to users to maximize their proficiency with the platform and take advantage of its full potential. - Optimize User Access and Permissions:
Streamline user access and permissions to align with business requirements. By ensuring that users have the appropriate level of access based on their roles, you can potentially reduce the number of higher-cost licenses needed. - Stay Informed About Updates and Changes:
Keep abreast of Salesforce updates, new features, and changes to licensing models. Understanding these updates can help you make informed decisions about your subscription and take advantage of new opportunities to optimize costs.
Also, read: Salesforce Consumer Goods Cloud: The Ultimate Guide for Consumer Goods Businesses
Types of Salesforce licenses:
Salesforce offers a variety of licenses to meet the needs of different users and use cases. Some of the major license types include:
- Salesforce Platform – For users who need access to custom apps but not standard CRM functionality.
- Salesforce CRM – For sales, service and marketing users.
- Salesforce Platform One – Provides access to custom apps along with CRM.
- Salesforce Platform Developers – For developers to build and test custom apps.
- Salesforce Workspace/Platform – Designed for customers, partners, and employees who need to access custom apps.
What are the features and limitations of Each License?
The licenses differ significantly in terms of the Salesforce features and functionalities they provide access to. For instance, the Salesforce CRM license allows access to key CRM capabilities for managing the sales pipeline, contacting leads and opportunities, productivity tools for email and calendar integration, etc.
In contrast, the cheaper Platform license does not include any standard CRM features. The Platform license is ideal for users who only need access to custom-built apps. Some key limitations are no access to Leads, Opportunities, Campaigns, and other standard objects.
Understanding these distinctions for different license types is quite important for optimal license provisioning. Assigning licenses aligned to actual user requirements results in lower licensing costs.
How to Identify Unnecessary Licenses?
To identify unnecessary licenses, it is essential to understand a few common scenarios where unnecessary licenses get purchased, such as:
- Assigning a Salesforce CRM license to IT team members who only access the Service Cloud console for support tickets.
- Providing access to custom Partner Portal through expensive CRM licenses as opposed to Platform licenses.
- Leaving licenses assigned to ex-employees who no longer need access.
Salesforce Admins should conduct periodic user license reviews and identify use cases where the platform or other cheaper licenses could meet the requirements. Implementing SSO across apps can also help correlate license assignment to application access patterns.
By preventing shelfware licenses that are paid for but not utilized, enterprises can yield significant cost savings.
Assessing Current Usage
Audit of Current Salesforce License Usage.
The first step towards Salesforce license optimization is conducting a thorough audit of your current Salesforce licenses. This involves creating a master list of all active Salesforce licenses and reviewing the following elements for each:
- License type and associated products/capabilities.
- The user profile the license is assigned to.
- Department and role of employee the license is provisioned for.
- Date when the license was first provisioned.
- Any recent activity or logins in the past 3-6 months.
Capturing this data provides visibility into several licenses purchased, their distribution across functions, and potential shelfware licenses assigned to inactive users or departments not using Salesforce actively.
Analyzing User Activity and Engagement
In addition to auditing license usage, Salesforce Admins should leverage reporting and analytics to determine how actively users are engaging with Salesforce. Some key metrics to analyze per license user include:
- Number of monthly logins.
- Recently viewed/modified objects and records.
- Usage trends over time.
- Adoption of key features like campaigns, cases, and reporting.
By layering activity metrics on top of license audit data, you can determine potential license downgrades or removals for minimally active users.
Identifying Underutilized Licenses
Correlating the data points captured in the license audit and activity analysis will highlight pockets of over-licensing and underutilization across your Salesforce environment.
Some common examples include:
- Shelfware licenses assigned to former employees or department heads.
- Overprovisioning standard CRM licenses instead of cheaper platform licenses.
- Buying add-on license packs in bulk due to unofficial internal requests.
- Rationalizing these underutilized licenses by reassigning or removing them presents an opportunity to yield tangible cost savings.
Also, read: Salesforce B2C Commerce Cloud Implementation Guide
How to Implement Best Practices for Salesforce License Optimization?
- Right-sizing Licenses for Users:
Right-sizing licenses for users is a crucial aspect of Salesforce license optimization. It involves aligning the features and functionalities provided by a license with the actual needs and usage patterns of individual users.
By matching the right license type to each user’s specific requirements, organizations can avoid over-provisioning and reduce unnecessary costs. This practice ensures that users have access to the tools they need without paying for features they don’t use.
- Utilizing Role Hierarchy Effectively
Utilizing role hierarchy effectively is essential for managing user access and permissions within Salesforce. By establishing a clear and logical role hierarchy, organizations can control data visibility, access to records, and the overall user experience.
This not only enhances security and data integrity but also streamlines the user experience by providing access to the right information to the right users at the right time.
- Streamlining User Access and Permissions
Streamlining user access and permissions involves carefully managing the levels of access granted to different users based on their roles and responsibilities.
By defining clear access levels and permissions, organizations can ensure that users have the appropriate access to data and functionalities within Salesforce, promoting efficiency, security, and compliance with data protection regulations.
Implementing monitoring tools is essential for effective Salesforce license optimization. These tools can help organizations track license usage, identify underutilized licenses, and monitor user activity to ensure that licenses are being used efficiently.
Salesforce Optimizer is one such tool that can help organizations understand feature usage and permissions, enabling them to optimize their Salesforce license usage rates across their users.
- Regular Reporting for License Usage
Regular reporting for license usage is another critical aspect of Salesforce license optimization. By generating regular reports on license usage, organizations can identify trends, track usage patterns, and identify areas where licenses are being underutilized.
This information can then be used to optimize license allocation and make sure that consumers have access to the tools they require without having to pay for services they do not use.
- Setting up Alerts for Potential Issues
Setting up alerts for potential issues is another best practice for Salesforce license optimization. By setting up alerts for license usage thresholds, organizations can proactively identify potential issues before they become significant problems.
For example, if a user is approaching their license limit, an alert can be triggered to notify the administrator, who can then act to optimize license allocation or purchase additional licenses as needed.
Also read: Salesforce for Property Management: Unveiling the Top 10 CRM Solutions
Negotiating with Salesforce
Understanding Salesforce Licensing Agreements:
Familiarize yourself with the details of your current Salesforce licensing agreements, including the terms, conditions, and any potential limitations. Understanding the specifics of your contract will empower you during negotiations.
Tips for Successful Negotiation:
- Clearly outline your organization’s needs and objectives to Salesforce representatives. Communicate any challenges or areas where you seek improvement in your current licensing structure.
- Highlight your organization’s commitment to the platform and its potential for future growth, demonstrating a long-term partnership mindset.
- Be prepared to discuss specific data on usage, user needs, and any areas where you believe the current licensing model may not align with your organization’s requirements.
Exploring Discount Opportunities:
- Inquire about potential discount opportunities based on factors such as the volume of licenses, additional services, or extended contract terms.
- Explore the possibility of bundling services or licenses to achieve cost savings. Salesforce may offer discounts for comprehensive packages that include multiple services or products.
Training and Adoption
Getting internal stakeholders aligned on the value of optimizing Salesforce licenses is key for driving adoption. Some recommendations include:
- Inform users during onboarding about selecting licenses aligned to their roles.
- Create FAQs explaining license types and how usage is tracked.
- Train team managers on how to request appropriate license levels.
- Develop policies for initiating use cases requiring non-standard licenses.
By fostering a culture of mindful Salesforce usage, teams can jointly govern efficient license management.
Promoting Best Practices Within the Organization
In addition to formal training programs, promotions through various channels continuously reinforce best practices for users:
- Salesforce Admins can showcase optimization successes in newsletters.
- Leadership townhalls should highlight the ROI achieved.
- Internal social channels can demonstrate examples of right-sizing licenses.
This creates momentum and accountability at all levels to uphold responsible usage.
Encouraging User Feedback for Continuous Improvement
Finally, take in regular feedback from business teams to uncover new optimization opportunities:
- Sales reps may suggest underutilized product add-ons to remove.
- Service agents can flag redundant license allocations.
- Business analysts have visibility into adoption trends.
This input empowers users and frontline teams, tightens the optimization cycle, and keeps your license management model updated.
Also read: How Salesforce Manufacturing Cloud Is Revolutionizing the Industry
Potential Challenges and Solutions
Optimizing Salesforce licenses can present several challenges for organizations. Common challenges include identifying underutilized licenses, aligning licenses with user needs, and managing the complexity of different license types and features.
1. Strategies for Overcoming Challenges
To overcome these challenges, organizations can implement strategies such as conducting regular license usage audits, leveraging monitoring tools to track usage, and right-sizing licenses for users based on their specific needs.
Additionally, effective role hierarchy utilization and streamlining user access and permissions can address many of the challenges associated with Salesforce license optimization.
2. Continuous Improvement for Long-Term Success
Continuous improvement is essential for long-term success in Salesforce license optimization. By regularly reviewing and adapting license allocation based on changing user needs and organizational requirements, businesses can ensure ongoing cost savings and efficient license utilization.
This iterative approach allows organizations to adapt to evolving business needs and technological advancements, maximizing the value derived from their Salesforce investment.
Also, read: Salesforce for Small Business: How it can be helpful
Get the best way to identify areas for improvement in Salesforce license usage
Cynoteck is a Salesforce consulting partner that can help businesses optimize their Salesforce licenses and achieve cost savings. They offer a range of services, including license usage audits, license optimization recommendations, and contract negotiation advisory services.
Cynoteck’s team of Salesforce experts can help businesses identify underutilized licenses, and right-size licenses for users, and effectively manage user access and permissions. They can also help businesses implement monitoring tools and set up alerts for potential issues, ensuring ongoing license optimization and cost savings.
By partnering with Cynoteck, businesses can achieve long-term success in Salesforce license optimization and maximize the value derived from their Salesforce investment.
Conclusion
Emphasizing the importance of ongoing monitoring and adaptation is crucial for sustained success in Salesforce license optimization. By continuously monitoring license usage, identifying potential issues, and adapting license allocation based on changing requirements, organizations can ensure that their Salesforce investment remains cost-effective and aligned with their evolving business needs.
It is essential to encourage businesses to take proactive action for cost savings through effective Salesforce license optimization. By implementing the outlined strategies and continuously monitoring and adapting license allocation, organizations can achieve significant cost savings while maximizing the benefits of their Salesforce investment.
Also, read: Salesforce Lightning vs Classic: A Comparative Analysis
Frequently Asked Questions:
Salesforce License Optimization is the strategic management of Salesforce licenses to enhance efficiency and cut costs. It’s crucial as it ensures organizations pay for only what they need, leading to significant financial savings.
Conducting a thorough audit of current Salesforce license usage helps identify unnecessary licenses. Analyzing user activity and engagement provides insights into which licenses are underutilized, enabling informed decision-making.
Right-sizing involves matching licenses to user needs. Strategies include understanding user roles, optimizing role hierarchy, and streamlining user access and permissions to ensure each user has the appropriate level of access.
Understanding Salesforce licensing agreements is key. Organizations should prepare by researching their usage needs and engaging in open communication with Salesforce representatives. Exploring discount opportunities and demonstrating a commitment to a long-term partnership can lead to favorable terms.
Common challenges include resistance to change, lack of user awareness, and complexity in monitoring usage. Solutions involve comprehensive training, promoting best practices, and continuous improvement to address evolving challenges in Salesforce license management.
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