As a consequence of the ever-rising popularity of CRM solutions deployed through the software-as-service model (SaaS), I get a lot of inquiries about pricing and contracting with vendors like Microsoft Dynamics CRM Online, NetSuite, RightNow Technologies, and salesforce.com. Sage CRM products (Sage CRM and Sage SalesLogix) are now offered through “the cloud”, and specialty CRM players in the life sciences sector, such as Cegedim Dendrite, StayinFront, and Veeva Systems, also offer this deployment option.
The individuals responsible for choosing to deploy a CRM SaaS solution are often business users, not IT people or solutions sourcing professionals — the director of sales and marketing, vice president of sales, and director of customer service, for example. These business executives are often unfamiliar with the more technical and commercial aspects involved in choosing a SaaS application. Obviously getting a good price is important, but there are additional considerations to keep in mind. Here are some guidelines to help you to negotiate a sound agreement:
Strive for a price lock-in at renewal time. Firms are often able to negotiate substantial discounts when signing initial contracts with SaaS vendors. But these companies don't always consider what happens at the end of the initial contract term. A discount of more than 50% might be offered, but once the contract is up for renewal, you may be in for a surprise if the discount is no longer available. Make sure to have renewal pricing rules stipulated in your contract.