As companies’ level of digital integration becomes increasingly correlated with their competitiveness, interest in the pursuit of CRM solutions continues to grow. Industry leaders have recognized that prioritizing efficiency is and will be necessary to evolve – and when companies seek out CRM solutions to drive efficiency, they often choose Salesforce.
Powering over 150,000 businesses, from mom-and-pop shops to Fortune 500 household names, Salesforce is the most widely-used CRM on the market. Research from Ceterna shows that Salesforce captures 33% of all CRM users, a statistic that cements the company’s reputation as a powerful and effective solutions provider.
However, implementing Salesforce can be an intimidating lift, as the company has a unique licensing model that may perplex new customers. In actuality, Salesforce licenses are nowhere near as complex as they may seem – and leaders who take the time to learn about the system's nuances will find that licenses give them an unparalleled ability to customize their solution.
Let’s take a brief look at Salesforce’s licensing structure.
What is a Salesforce license? Why are licenses important?
Salesforce licenses unlock features of the CRM and specify which users can access what functionalities. Licenses are essential to Salesforce’s business model, as they allow organizations to pick and choose the functionalities they need without paying for the ones they don’t. Salesforce Trailhead compares licensing agreements to leasing an office: organizations provide an initial payment for an “office space” that unlocks access to the solution of their choice and can unlock additional “doors” to additional products if they so choose. The advantage of this model is that licenses allow organizations to pay only for the functionality they need, with the option to pursue more on an as-needed basis.
With that in mind, let’s run through the four types of licenses Salesforce currently offers: user licenses, permission-set licenses, feature licenses, and usage-based entitlements.
User licenses: setting baseline access for each user
User licenses are licenses administered on an individual basis that unlock a base set of functionalities for each user. Organizations can link user licenses to a series of permissions through their Salesforce account; then, users can access specific product features. User licenses can be understood as an essential must-buy, as each user must have one to access the Salesforce system.
Feature licenses: distinct features on-demand
Feature licenses are an extension of the access granted by user licenses. With a feature license, companies can grant a single user access to a tool or functionality within Salesforce that is not originally included in the base user license. This access is tied to that user’s profile and can be toggled on and off as needed by leadership; as long as the feature license is maintained, the additional functionality will always be available.
Feature licenses give organizations the ability to customize their access to Salesforce, providing specific employees with functionalities that aren’t universally needed across the user base. As such, feature licenses can be an effective way for businesses to keep costs low without compromising on their solution’s utility.
Permission set licenses: additional access as needed
Permission-set licenses are an extension of the access granted by feature licenses. With a permission-set license, leaders can grant users piecemeal access to an array of Salesforce tools that were not previously included in their user license. These permissions allow employees to access and utilize a specific set of features within the Salesforce system so long as they abide by parameters that are pre-set by leaders.
A good example of how this works would be if several sales representatives' roles shift to include customer relationship management. They have baseline access to Sales Cloud through a user license, but their user license doesn’t allow them to access some of the features used by their marketing department in Service Cloud. Leaders can grant permission-set licenses to these employees to expand their access to Salesforce, allowing them to unlock areas previously cordoned off for other departments by management.
Usage-based entitlements: everything you need, as you need it
Most of the licenses we’ve covered center around incrementally expanding access to Salesforce’s wide array of tools and solutions to particular employees. Usage-based entitlements, however, have a different focus – they allow organizations to license Salesforce solutions that limit access to a set number of uses.
Essentially, organizations can either purchase unlimited uses for all their employees or purchase a set amount, such as 50. In this scenario, once an employee with access logs on to Salesforce for the fiftieth time, their organization’s access to Salesforce will conclude after that session. The utility of usage-based entitlements is that organizations can customize their access to solutions, paying only for what’s needed when it’s needed. Salesforce offers a wide variety of options for usage-based entitlements that suit a broad spectrum of needs.
Selecting the license that suits your organization’s needs
The goal of the license system is to allow organizations to better pick and choose how they interact with Salesforce, selecting the options that will best suit their needs and maximize the value of their investment. We hope this primer will demystify what can sometimes be a complex-seeming pricing model and help your organization choose the proper licenses for its transformation journey.
If you still have questions or aren’t sure which licenses will provide the most value, you can always enlist a Salesforce partner to help map your digitalization journey. Gerent is a leading Salesforce Summit partner with a mid-size firm's agility and a large integrator's capabilities. We have over 1,100 successful implementations under our belt, and our industry-knowledgeable consultants come well-equipped to build a solution that complements your strengths while resolving your pain points.
If you’re interested in learning more about what we can do to help kickstart your digitalization journey, give us a call to speak with one of our industry experts.