Pricing models on SaaS vendors’ websites aren't the be-all-end-all price for software. In fact, there are plenty of ways to reduce your SaaS costs. More often than not, it begins with asking the vendor and opening up a conversation. Here are seven SaaS negotiation hacks to reduce your SaaS costs today.
1. Renew SaaS subscriptions at least three months in advance
SaaS vendors are willing to provide discounts on their tools, but you need to have leverage on your side to maximise your chances. It’s unlikely you will be given a discount without a compelling reason. One way to increase your chances of a successful SaaS negotiation is to renew your contract/plan at least three months in advance. For SaaS vendors, renewing in advance ensures greater predictability for their revenue forecast. The vendor is happy to lock the sale in early, and you have more leverage to get a better outcome. The next time your SaaS subscription is up for renewal, try this strategy to help reduce your SaaS costs.
2. Ask for a discount when you upgrade to an annual plan
Proactively reach out to the vendor to reduce your annual contract value. Many SaaS vendors offer discounts, but you need to ask for them; if you don’t ask, you don’t get. Like early renewals, locking in an annual contract provides greater predictability for the SaaS vendor’s revenue forecast. It also ensures that the SaaS vendor has a client for the next year. This could be leveraged, and you can negotiate a discount when you switch to an annual subscription.
3. Negotiate a lower price on a longer-term SaaS subscription
SaaS vendors are more compelled to give better rates when you’re committed to a longer-term contract. It’s also easier for them to forego renewals as you’re locked into a multi-year plan. Ensure you only do this for the core tools that you’ll not move away from. Contact the SaaS vendor and see if you can reduce the price of your SaaS.
4. Purchase or renew SaaS subscriptions in the last quarter of the financial year
Timing your SaaS purchases and renewals with the vendor’s financial year could help you to negotiate better prices on your SaaS subscription. SaaS sales representatives have a target that they need meet each year. When their deadline approaches, they’re more willing to negotiate in order to reach or exceed their quotas. By optimizing the time of your purchase and renewals, you can lower your SaaS costs and go through a successful SaaS negotiation. Consider timing them with the vendor’s calendar year to see if you can get a better price.
5. Request to extend the free period of your trial
Haven’t had time to confirm the SaaS purchase with your executive team? Unsure of the technical fit? Does pricing still need to be approved? Contact your sales representative and ask if they can extend your free trial. Let them know your situation and have a specific extended period in mind. Sales representatives are more likely to extend the trial if there’s a possibility of increasing the deal value or ensuring they win the business. Keep this in mind when you’re discussing an extension.
6. Request a discount from a SaaS vendor in exchange for a customer review or case study
Become a brand advocate for the SaaS vendor’s product. SaaS vendors often provide marketing discounts for customers who give their company a review, case study, or testimonial. You’re boosting their brand and receive a discount as compensation. Consider reaching out to their sales representative to see whether they would like to do the exchange.
7. Ask the SaaS vendor to beat a competitor’s price
Compare the costs of your SaaS subscription with its competitors. Take note of overlapping features and see who’s offering the better deal. One of our customers was able to get a 20% discount on their SaaS subscription by using this method. We found a competitor was offering the same features for a much lower price and asked the SaaS vendor to justify the price difference. This led them to provide a more competitive offer, reducing the overall costs of our customer’s SaaS.
These seven SaaS negotiation hacks could bring in huge savings for any SaaS stack. If going through these processes would demand too much of your time, consider signing up for Hudled’s SaaS audit. We go through your entire SaaS stack and expertly break down your tools, contracts, and prices to bring thousands of savings for your SaaS. By using some of these recommendations we’ve listed today, we have identified an average of nearly $30k savings per audit.