You walk into your office thinking it won’t be a busy day. But then you check your inbox. Dozens of emails from software vendors await, all with a similar message:
“We’ve automatically renewed your subscription to [insert name of one of the 300+ SaaS tools your company uses].”
You’re not just looking at a messy inbox, but a messy tech stack, too. You haven’t had a moment to consider which solutions your team doesn’t use anymore, or which contracts need negotiation to cut costs.
“Oh well,” you sigh to yourself, “Maybe next month.”
SaaS renewal management prevents these problems from becoming the norm. By proactively managing your solutions before they auto-renew, you have a chance to find and eliminate the solutions that are needlessly draining your business’s budget.
In this article, we guide you through SaaS renewal management, what it involves, and how to eliminate waste and tidy up your tech stack for maximum efficiency. We also include a free SaaS renewal management calendar to make tracking your software renewal dates easier.
What Is SaaS Renewal Management?
SaaS renewal management is the ongoing process of overseeing your company's software stack and renewals. By implementing proactive renewal procedures and policies, you can handle renewals, weed out unneeded solutions, and renegotiate your SaaS contracts.
The process essentially consists in evaluating the effectiveness of the software, keeping costs in check, and ensuring that the teams have the right tools to meet business objectives.
We like to think of it like good software management hygiene—akin to brushing your tech stack’s teeth. For those chompers to shine pearly white, you need to remove unnecessary contracts before you’re charged for them.
Why Is SaaS Renewal Management Important?
SaaS renewal management is important because it directly impacts your company’s operational efficiency and lets you cut costs on software your team doesn’t need. As Katie highlights, “It’s crucial for ensuring that companies continue to get the best value from the tools and services they rely on.”
Some of the other benefits of addressing renewals proactively:
- Avoids auto-renewals: Some SaaS licenses auto-renew and might even hike up prices without warning. Intercepting renewals helps you cancel before more money goes out of your pocket.
- Opens up opportunity for renegotiation: Actively managing your renewals lets you reopen negotiations with your vendor, potentially getting you a better deal.
- Aligns your SaaS stack with business goals: Your company’s objectives aren’t static—so why should your tech stack be? Reviewing renewals proactively means you can cancel and reinvest funds into different software that aligns with your business goals.
- An integral part of general SaaS management: Renewals are a critical part of your whole SaaS management process. It keeps you from paying for software you don’t need by deciding what gets another month and what gets left behind.
The Consequences of Poor SaaS Renewal Management
“Failing to manage SaaS renewals effectively can have significant consequences for a company, from missing opportunities to negotiate more cost-effective options to being locked into contracts with undesired terms or overpaying for features that aren’t utilized.” – Katie Timms, Customer Success at Cledara.
It might not be immediately apparent, but letting renewals auto slide without careful consideration can lead to long-term damage.
Firstly, you’re potentially wasting spend on software your team doesn’t even use. As your tech stack grows, prices wrack up, and you risk budget overruns and missed opportunities to negotiate better deals. Without SaaS renewal management, your tech stack becomes parasitical, silently sucking up your funds for nothing.
But it gets worse.
Secondly, poor SaaS renewal can lead to a bloated tech stack filled with overlapping tools. It’s expensive and hard to manage. If you have 345 tools in all, 45 of which have the same features, how will teams know which to use? There’s likely no single standard, and if there is, why do you need so many platforms that do the same thing?
Exactly—you don’t!
What you do need, however, is a procedure for intercepting renewals before they drain up your company’s money and your effort.
What Does The SaaS Renewal Management Process Involve?
An efficient SaaS renewal management process for an optimized platform involves a few key elements:
- Getting a centralized view of all your SaaS subscriptions: It’s difficult to track renewals when they aren’t in one place. Fortunately, SaaS management software lets you monitor your solutions through a single dashboard, complete with usage rates, upcoming renewals, and spend analysis.
- Business value assessment: Understanding how your software fits in with short- and long-term business objectives involves analyzing if your chosen solutions are really necessary for efficiently carrying out daily operations—and seeing ROI.
- Comparing budget to cost: Compare your budget allocation to the actual cost of maintaining your tech stack. Are you paying more than you should, about the same amount, or are you in the clear? This will tell you how important it is to strip down your tech stack and cut costs.
- Contract review: Revisit your SaaS vendor license and see if there’s an opportunity for better deals through bulk discounts and longer contracts. You can also compare them to other vendor prices, or look for hidden fees or price increases.
- Setting up a renewal policy and procedure: Do you renew, cancel, or renegotiate? To make the choice, set up a standardized method for reviewing, optimizing, and keeping or cutting software renewals. Make sure to get buy-in from stakeholders, document the process, and appoint the appropriate people to the task.
4 Key Strategies for Smarter SaaS Renewal Management
To turn the never-ending wheel of SaaS renewals into an opportunity to cut costs, you need a clear method in place.
Here are the top four strategies that put you back in control of your tech stack.
Create A Renewal Calendar
Your renewal dates are likely scattered across the month, which can make them difficult to track and review. You might even have annual subscription fees with many vendors. Whatever the case, check your software welcome emails and vendor contracts to find the exact renewal dates for each.
Katie adds, “Starting the renewal review early (between two and four months before the renewal date) will give you enough bandwidth to review your current plan, discuss potential changes, and negotiate better conditions if necessary.”
If you’re looking to manage things manually, a calendar will help you monitor your efforts as you comb through software ripe for renewal. Include columns with your solution’s name, vendor, renewal date, team contract owner, contract type, and renewal decision.
Regardless of how you choose to manage renewals, Katie notes the importance of knowing exactly what you’re looking for. “For every SaaS product, establish clear criteria for renewal based on usage, performance, and ROI. For instance, if a tool hasn’t been used in the last few months or isn’t meeting key performance indicators, it may not be worth renewing.”
📅 Need a calendar but don’t have the time? Here’s our free SaaS renewal management calendar template.
Turn Off Automatic Renewals
If there’s an arch nemesis of an optimized tech stack, it’s automatic renewals. While created with convenience in mind, automatic renewals take away your ability to end your partnership with a vendor or negotiate until the next period
Disable the auto-renewal function on your software wherever possible. You can usually find the option through your solution’s account settings. Otherwise, contact your vendor or look through support documentation.
We say "wherever possible” because some vendor tools come with auto-renewal clauses, effectively locking you into a commitment.
If you find such a clause in your contract, you can either:
- Cancel if the tool is redundant, or you wish to renegotiate (reach out to your vendor first!)
- Set renewal reminders so you don’t accidentally lock into another year
Hold ‘App Owners’ Accountable
SaaS renewal management isn’t an operation you do apart from the rest of the company. Instead, all departments can contribute to the process by being accountable for the software they use. Set one point of contact for each team as an “app owner” to track which tools are essential and which solutions overlap or are otherwise causing bloat.
If necessary, you can even give them approval for renewal decisions related to their teams. For example, there’s no reason your human resources department needs five different benefits trackers—which one do they use the most?
After assigning an owner to each app, remind them of their software spend budget and encourage them to find cost-alternative solutions or reopen negotiations with the help of your procurement process and team.
Use SaaS Renewal Management Software
Filling in renewal calendars, digging up contracts, and nudging your teammates can be effective—but it also takes time and effort that you might not have.
That's where using SaaS renewal management software can make a huge difference. Cledara lets you add reminders to stay on top of renewal dates, giving you enough time to reassess your priorities and cancel before you make a choice.
Here are just some of the ways Cledara can help:
- Budgeting and Forecasting capabilities enable you to get insights into future renewal costs and manage your SaaS budget effectively by keeping all information in one place.
- Cledara’s Reminder Feature helps by proactively notifying the teams when the upcoming renewal is coming up.
- The Notes & Attachments section facilitates having all the details on hand when starting your renewal review.
- The Insights feature makes it easy to identify overlapping subscriptions and recommend possible consolidations.
- Benchmarks & Negotiation puts pricing trends across tools from more than 1000 customers at your disposal to make it easier to negotiate with vendors. It also uses AI capabilities to spot opportunities to negotiate better terms based on usage and business needs.
- The Engage feature provides data insights into product usage and adoption to help decide whether to renew or not.
Cledara’s renegotiation copilot works alongside benchmarks to give you insights on software spending, how it compares to others, and a list of alternative solutions. You get all the information you need to renegotiate with vendors for a better deal, eliminate the tools you don’t need, and optimize your tech stack.
How Do You Know Whether To Renew A SaaS Contract?
Looking at a long list of software can get confusing. There’s a reason you’ve bought them, but many have outlived their purpose. How do you tell which ones make the cut and which don’t?
Katie says:
“The key parameters to consider when considering whether to renew a SaaS contract are usage and adoption of the product, needs of the business, value, and ROI.
You also want to evaluate the terms and conditions of the contract, the support level and guidance provided, security and compliance, and the exit strategy and transition plan.”
Here are a few key pointers on when you should renew a SaaS contract:
- It has high usage and adoption rates
- It directly supports your business goals
- Vendors offer favorable terms through your relationship
- Stronger and more cost-effective alternatives don’t exist
- The tool is necessary for regulatory compliance and security
Here are some reasons you should end your contract or at least pause it to negotiate terms with vendors:
- It’s not essential to daily operations
- The costs of the tool outweigh the benefits
- Cheaper, more beneficial alternatives exist
- The tool doesn’t integrate well with your current tech stack
- Contract terms aren’t favorable and have rigid terms, price hikes, and lock-ins
- The software usage has been declining for some time (over two months)
To Renew or Not To Renew: Let Cledara Help
Software renewal management puts you on top of your tech stack, gets rid of costs, and drives operational efficiency. If there’s a better trio of benefits to pursue for your business—we don’t know about it.
What we do know is that SaaS renewal management can be difficult and time-consuming to undertake manually. That’s where a tool like Cledara can centralize your tech stack, making it easy to optimize from one place. It even creates a virtual debit card per subscription, letting you activate and deactivate the card immediately and prevent further renewals.
Whether you’re a procurement specialist or a CFO, Cledara helps you clean up your tech stack and make sure it’s actually working for your business.
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