Does Salesforce Have Pricing Power?
Salesforce raises list prices for the second time in three years
Last week, Salesforce announced a 6% average list price increase across some of its core products, effective August 1, 2025. That follows a 9% hike in 2023, which was the company’s first in seven years.
On the surface, this sounds like good news. In theory, raising prices without losing customers is the strongest form of margin expansion. It’s also the holy grail of business strategy: pricing power.
But is that what Salesforce really has? Is this the start of consistent price increases, or just a one-off choice in a saturated market where growth is getting more difficult?
In this post, I’ll break down:
What Salesforce’s price hike actually means for investors
And whether Salesforce really has pricing power
Salesforce’s Price Hike
Last week, Salesforce announced new product packaging and pricing across several key areas, including Agentforce, Customer 360 Apps, and Slack.
One significant change is the general availability of Agentforce, Salesforce’s suite of AI features, which replaces the old Einstein add-ons and bundles. Two tiers are being introduced:
Agentforce add-ons, starting at $125 per user per month, can be added to core products. They include:
Unlimited access to generative AI and Agentforce
Industry- and role-specific agentic templates (e.g. banking service assistant for Financial industry, patient services assistant for Life Sciences)
Full access to Salesforce’s suite of predictive, generative, and agentic capabilities
Tableau Next, an integrated agentic analytics platform
Prompt Builder, a tool for getting the best and most relevant LLM responses
Agentforce 1 Editions, a bundle starting at $550 per user per month, which includes:
All Agentforce add-ons
Cloud-specific functionality
Task credits for agents
Data Cloud access
Slack Enterprise+
Beyond Agentforce, Salesforce will raise list prices for its Enterprise and Unlimited Editions for Sales Cloud, Service Cloud, Field Service, and select Industries Clouds, by an average of 6% starting August 1, 2025. The Enterprise and Unlimited Editions are two common tiers used for core products like Sales Cloud and Service Cloud. This follows a 9% hike in 2023 (their first in seven years).
Lastly, Slack is also undergoing changes:
AI features are being added to all paid Slack plans
The Business+ plan will increase from $12.50 to $15/user/month
A new Enterprise+ tier is being introduced
Every Salesforce customers will now get access to Slack’s free plan with integrated Salesforce functionality.
Price increases are only valuable if they don’t drive customers away. Salesforce’s attrition rate—around 8% annually—is already on the high side compared to SaaS peers with known attrition rates. However, in 2023, after the company’s first price hike in seven years, attrition held steady below 7.5%, suggesting that most customers absorbed the change without much difficulty.
But this time might be different. With the prior price hike, the company has had seven years to improve their offering and justify the price increases.
“If we look back seven years ago since the last price increase, there has been a huge amount of development on the platform, including a now fully integrated Lightning Platform, embedded Einstein AI features, DevOps Center, native Slack Apps, Flow, and features such as Pipeline Inspection.”—Salesforce Ben on the 2023 price increase
This next hike mainly comes with a steep push into agentic AI with Agentforce. The question now is whether Salesforce’s moat is strong enough to withstand increased churn. Do customers see the product as indispensable? Or will they start weighing switching costs against higher pricing?
Does Salesforce Really Have Pricing Power?
Not all pricing power is created equal. Some companies raise prices because customers love the brand. Others do it because switching is costly, or because the product is simply irreplaceable. So where does Salesforce fit?
Specifically, five sources of pricing power exist:
Differentiation: Salesforce pioneered cloud CRM, but today its core product is no longer that unique. Microsoft Dynamics offers similar capabilities, and other tools—especially in the mid-market—are available in abundance. Agentforce offers some uniqueness, but it’s not enough to justify steep pricing against peers like Microsoft.
Substitutes: While Salesforce’s offering aren’t entirely unique, for large enterprises, Salesforce has few true substitutes. Its breadth, integrations, and developer ecosystem make it hard to replace. Microsoft Dynamics is the only credible full-suite rival, especially with Office and Outlook. For smaller companies, substitutes are more common, with CRMs like HubSpot being generally cheaper and easier to implement. Still, there’s a reason over 90% of the Fortune 500 remain Salesforce customers.
Switching Costs: Once a company embeds Salesforce across teams, migrating away becomes a real problem, with the risk of data loss, retraining costs, and operational disruptions. Long-term contracts and partner ecosystems further reinforce entrenchment. Switching costs are clearly high.
Willingness to Pay: Willingness to pay is hard to observe directly, but attrition gives a useful proxy. Salesforce’s attrition remains around 8%, and the 2023 price hike didn’t impact this figure. This next price increase will be a second important test: if attrition rises this year, customers’ willingness to pay might not be high enough.
Brand & Behavior: Salesforce is the safe choice for CRM solutions. It’s entrenched in operational teams, widely supported by consultants, and deeply known in enterprise IT. But that doesn’t translate to real pricing power. Brand strength tends to matter more in consumer-facing businesses, where loyalty and emotion drive buying decisions.
Overall, Salesforce clearly has some degree of pricing power, thanks to limited substitutes at the enterprise level, high switching costs, and continuous innovation.
In a maturing industry, that is important. Growth will increasingly come from growing revenue at existing customers—not just through upselling, but also via pricing.
But this 6% list price increase doesn’t mean revenue simply rises by an additional 6%. List price is just a reference point. Actual pricing depends on bundling, discounting, negotiation, and more, especially for large customers. And this increase only applies to a subset of products, not the full portfolio.
Moreover, price increases aren’t new for Salesforce. They’ve always used ways to raise prices for existing customers, especially at renewal. What’s different now is that they’re raising the list prices for the second time in just three years. We’ll have to see how customers respond to Salesforce’s pricing decision, starting August 1.
In the next post, I’ll look at three businesses with even clearer pricing power, each trading at a discount.
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Disclaimer: the information provided is for informational purposes only and should not be considered as financial advice. I am not a financial advisor, and nothing on this platform should be construed as personalized financial advice. All investment decisions should be made based on your own research.