Not everyone is used to and skilled at renewing vendor contracts, but you have to be, especially when it comes time to renew your SaaS contracts. An integral part of a renewal prospect is to establish the drawbacks and benefits of renewing a contract and letting the chance go or forging ahead with renewal.
Below are some important tips to help you capitalize on that opportunity.
Negotiate SaaS Contracts Annually
Ideally, your SaaS contracts should only be valid for one year. This will force yearly bidding or at the very least, renewal opportunities with your current vendors. While this might be time-consuming, think of all the potential savings you will get.
Strategizing is Key
Do not go into a renewal negotiation meeting without a clear idea of what you want. You should have ideally explored in advance all the potential outcomes of renewing a SaaS contract, and how these could support your company’s needs and goals going forward.
Knowing beforehand what you do not need and what is essential will provide you focus and clarity during a renewal of a SaaS contract negotiation. It will likewise help you determine when and where to be flexible, and when to have a firm hand.
Look for Volume Discounts
Before asking for volume discounts, you should know how much your company spends on current SaaS providers and how much competing providers might charge you for similar services or products.
When you have this crucial information, you can then explore aggregating purchases to obtain volume discounts.
Having Options is a Great Thing
While you might have good relationships with some or all of your current SaaS vendors, they also know that your relationship with them is still a business. Consider exploring bids from other SaaS vendors before negotiating your current SaaS contracts just to see what other vendors could offer you.
As with any other vendor contract, negotiating a SaaS contract is essentially about knowing what you need so that you know what you’ll be paying for and getting until the contract ends and it’s time for renewal again. Plenty of companies ultimately lose money because of poor negotiation skills.