Cloud customers; don’t let yourself get surprised by that upcoming contract renewal. Especially if the software you are renewing is of great value/importance to your organization. Cloud software vendors take into account some key considerations before they kick start a renewal discussion. At a high-level they are typically based on either 1) When THEY need the subscription renewed/contract signed, or 2) When it's clear you will have little time to make a fully-thought out decision. This is evident in the models you see out there, some of which include an automated notification regarding your upcoming renewal. This more hands off approach works for less complex solutions and treats the renewal like a “Keep the Lights On” activity. It assumes that you, the customer, are satisfied with the solution and the renewal isn’t in question. In situations like this, you’ll often see these automated notifications sent out with less lead time for your to weigh your options thoroughly. The other approach (for more complex solutions) is a few months out, and typically done by a reach out from your account or customer success manager. This approach is obviously more collaborative, but keep an ear to their underlying goal(s). Is it just completion of the renewal on time, or are they doing it early? Are they trying to add more services? Etc. etc.
The key here is to start taking control of the discussion. Reaching out early to start the renewal conversation keeps your cloud technology partner on their toes and gives you ample time to consider options, particularly in cases where you haven’t necessarily achieved the desired outcomes you sought to when you initially purchased. Having this discussion early and collaboratively, leveraging an approach based on mutual success, actually puts customers in the drivers seat when it comes to the renewal.
- Can you keep the year to year cost flat?
- Can cost be reduced?
- Can services be included that will help you derive more value?
- Can you swap unused products out?
- Can you get custom SLA’s incorporated?
- Or worst case, can you export your data in order to move to another provider?
The list goes on. These numerous negotiation levers become less realistic if you have limited time to complete the transaction and find yourself ill-prepared, and subsequently forced, to renew for another term. So, keep an eye on your upcoming cloud software contracts. Numerous contract management applications exist that can help you do this, but if you’re looking for a really low cost method, it never hurts to create a spreadsheet with all your cloud software solutions listed, along with their associated cost and renewal dates. Further, you can create an event in your calendar to remind you about important upcoming renewals that warrant additional lead time to complete.
Preparation is the key to success!
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