One of the top questions Gartner receives from clients evaluating salesforce.com is, why are salesforce.com services so expensive versus the competition? With the recent introduction of salesforce.com’s Performance Edition (see “Salesforce.com Announces New Comprehensive CRM Edition”), customers who would have purchased Unlimited Edition (no longer available) are paying 25% to 35% higher prices than they would have with Performance Edition. Salesforce.com does offer more functionality in Performance Edition, but not all customers need those capabilities.
Gartner has seen customer evaluations that indicate that salesforce.com can be as much as three times the subscription price versus that of the competition. In some cases, customers assume that if salesforce.com is that much more expensive it must be better. Gartner suggests that customers avoid equating price with value, a trait inherited from consumer buying habits. Functional differences between salesforce.com editions may be minor for particular customer solutions; salesforce.com has continued to hold their premium, particularly for larger enterprises. Over the course of hundreds of evaluations, we asked clients why they would pay such a premium for salesforce.com, and we have come up with five basic conclusions that we will explore in a just published research note (see When, and When Not, to Pay the Salesforce.com Premium). It was clear the customers who did not choose salesforce.com did not place enough importance on these reasons to justify salesforce.com’s price premium. This is research is a must read if your in the vendor selection or contract procurement process with salesforce.com.