How to Turn Software Renewals into Wins

Tory Kaigan-Kuykendall: Hope you're having an amazing SaaS news so far. Fab and I are here today to talk about how to turn SaaS renewals into wins. We're so excited to talk to you about this. Before we get started, we don't have a ton of time. So if you have any questions, feel free to throw those in the chat and if we have time at the end, we'll answer them or we'll get back to you after the session.

Fab Reissner: Hi everyone. I'm Fab Reissner. I'm a senior SaaS services manager and we're super excited to have you here today at SaaSMe and ready to move things along.

Tory Kaigan-Kuykendall: Yeah, I'm Tory Kaigan- Kuykendall, senior SaaS services manager as well. Fab and I have a wealth of renewal expertise being in SaaS for quite a while now, so we're excited to share with you some of our tips and tricks. If you're new to Zylo, you'll get some insights and how the platform can increase your wins when it comes to renewals. And if you're familiar with it, we'll also highlight some tips and tricks that you can use to enhance your renewals as well. Awesome. As you're probably all aware, you face hundreds of software renewals every year. On average, we see customers having around 204 renewals every year, which if you're not used to handling renewals or running renewals, be it you're in IT or SAM, it can create chaos. More than ever, you want to be on top of your renewals. We're seeing suppliers coming with really heavy price increases this year and you're probably only given a flat budget. So with more pressure to make the most out of your money, we're going to show you some tips and tricks that you can use to keep yourself within your budget but get that best unit price you need.

Fab Reissner: During the session we want to help you master your renewals so that you go in feeling confident when handling hundreds of renewals throughout the year. Tory and I are seasoned professionals that can guide you through this renewal season. Some key things to remember when you kick off your renewals are be proactive. Get ahead of the game so that you're not running up against the clock. You don't want to lose leverage by waiting until the last minute. Leverage data. You don't want to go in blind. Familiarize yourself with pricing structure and scope before you go in. And negotiate with power. Key levers we use on a day- to- day basis will help you achieve the best possible outcome. Shift from reactive into proactive mode and start 90 to 120 days in advance. This is a good timeframe for most apps but for larger apps you may even want to give yourself more time. Renewals are complex, they take time. When you have time on your side, you can evaluate for redundancies, you can take a look at alternative applications, gather the right data, strategize with the app owner and so much more. Getting ahead of the renewals is easy to say and even harder to do. It's hard to stay ahead of them when you don't know when they are happening. A couple of things you can do to help make this shift is one, centralize your contracts and two, create a renewal calendar. Getting the right people involved is making sure that everyone from finance, stakeholders, security and legal are involved from the beginning. There's nothing worse than getting to the signature phase only to find out that legal is requesting a new MSA or DPA or that budget wasn't approved for the most up- to- date scope. Importing contract data is time- consuming, so let us do it for you. For current Zylo customers, integrating contracts into Concierge into your contract process can be as easy as adding docs at Zylo as a watcher on your signature. That way, all of your renewals are taken care of and tracked and you have a hundred percent visibility into upcoming renewals. Chasing down a contract ahead of renewal or completely missing that renewal because the contract was nowhere to be found is frustrating. Centralize your SaaS contracts. SaaS sprawls through different channels and is purchased all across your organization, just like contracts. Create one central hub for your contracts and contract data. Zylo Contract Center integrates with Coupa contracts to centralize all contracts in Zylo. Contract Concierge uploads or emails any SaaS contract, and the service automatically scrapes and transfers contract content into the appropriate application display within your Zylo instance.

Tory Kaigan-Kuykendall: Awesome. Thank you so much, Fab. So another really important reason to be proactive and to start early is to avoid auto- renewals. Nothing hurts more than reaching out to a supplier to discuss a renewal and finding out it's already renewed. So one really simple way to avoid auto- renewals and this may sound crazy but remove that term from your agreement. State that that's a non- negotiable term and get that removed prior to even signing agreement. Oftentimes, suppliers are going to come to you and say, " Hey, auto- renewals are great for you. You don't have to worry about it. You never have to look at this agreement again. We'll discharge you every year." In actuality, it's really bad for customers because it doesn't allow for you to understand how people are using your licenses throughout the year and most of our customers who are just constantly renewing are being overcharged for unit prices and are purchasing way more than they actually need and use. So if the ship is already sailed and you have the auto- renew clause in your agreement, that's okay. The Zylo platform offers you the ability to add auto- renew languages into your contracts. So as Fab already discussed Contracts Concierge and the importance of putting your contracts data into Zylo, within that, you can actually put the auto-renewal language right into that contract section for that specific application. Then what you can do is set up alerts. So depending on when that agreement auto- renews, is it 30 days prior, 60, 120, you can set up Zylo to alert you and say, " Hey, looks like you have the Salesforce renewal coming up. Just so you know, here's the auto- renew language in this auto- renew 60 days in advance." This is so helpful and has saved so many of our customers. So I just want to reiterate how important this is, and that's why it's so critical to start ahead and be proactive because nothing again hurts like having an agreement auto- renew when you don't need it. Awesome. Moving on to our next little win. So leverage data and understand usage and needs. So we've talked about why starting early is important, some of the reasons, but another reason it's really important is it gives you time to do these next wins, right, these next tasks. So oftentimes, renewals are really complex. There's a lot of factors to consider. There's a lot of teams using the application and there's a lot of things you want to understand before you're even reaching out to the supplier. So some factors that we think it's important to consider is how the application's being used. And if there's another application with a redundant functionality, you want to understand the usage, how it's being used, the team's using it, and then look what other applications you have in your SaaS stack. This may be a good opportunity to move away from of the two that's redundant and consolidate applications, so you have one team using one application and get rid of that redundant spend. Do the users using the app? Are the licenses assigned? Are they actually using it? So it's really important to make sure you have your direct integration setup. So Zylo offers a functionality where you can directly integrate with certain applications. So take Salesforce for instance. You can directly integrate your Salesforce instance with Zylo where you're pulling live application data, right, so you can see how people are using it, when they're using it and if they're on the right license type, right? So what you can do is run a workflow. We have two different types of workflows, four direct integrations. These are either a deprovision. These are people who haven't had a lot of activity, maybe haven't logged in the last 90 days or never. You would ask them, you'd send a survey, email, ask out and say, " Hey, looks like you haven't logged in the last 90 days. Do you still need this license?" And then from there they can say, " Yes, I do," and provide a reason why or no. And right then you get a full report directly in Zylo that allows for you to directly deprovision in app. We also have another kind of workflow that's a downgrade. So for licenses like Salesforce or Zoom Pro, you can see, " Hey, for Zoom Pro, looks like you're not using any of the Zoom Pro features. We're seeing if you'd be willing to take a free license," and then directly from the app you can survey those users and see which one they want to downgrade if they need to keep it and why. This has helped so many of our customers really dig deep into their application usage to understand how it's being used, who's using it, and what they need for the future.

Fab Reissner: Often when working on a renewal, you may not be the sole owner or team. So make sure that the stakeholder is sharing the contact information for the correct point of contact at supplier X. Get the background of the relationship. How has the relationship been throughout the last contract term? Will this be a flat renewal? If not, are there plans to expand or reduce scope? Does a multi- year make sense? And lastly, is there any additional information I should be aware of prior to entering into the renewal discussions? This is also a good time to understand what negotiable terms the application owner and the business will find agreeable.

Tory Kaigan-Kuykendall: Now once you've done that, you understand what you need, you understand who's using it, the amount, the internal stakeholders, what they're looking to do in the future. Now you need to focus on the price. So you can utilize the Zylo price benchmarks features. This is an additional feature in application where you can actually put in all your license information to understand if you're paying a fair price or not. So you can put in application, license type and price and it'll tell you right away if you're paying below average or above. A lot of customers are shocked to find that they are way paying above the average. And when that's the case, we're going to give you some really great negotiation tips that are going to help you handle getting that unit price lowered.

Fab Reissner: With SaaS prices going up, nearly every vendor is increasing prices, but that doesn't mean that you have to miss out on a good deal. The SaaS industry is always changing, so understanding the current market trends, competitors and suppliers wants and needs is critical when going into a negotiation. Understanding both your and the supplier's most desirable outcome during a negotiation is critical. Make sure that you know when the supplier's fiscal year end and quarter end is so that you can put together an action plan prior to negotiation. This will provide you with a framework for how you want the negotiation to play out. And spoiler alert, do not share these with the supplier.

Tory Kaigan-Kuykendall: Awesome. So some negotiation levers that you can use to, again, negotiate with power are right here. The first one is increased usage. Just like at Costco, when you're buying more, you're getting a better price. So as your agreement grows, your unit price should significantly lower. So if that is not happening, you need to talk with your supplier about renegotiating on one unit price. A lot of times suppliers like to add little buckets. So, hey, yeah, you bought a hundred last year and now you're adding 50, so we'll give you 50 at this lower price. No, what you want to do is say, " Hey, we're buying more, but we want to renegotiate the whole agreement and get the lower unit price." Please stress for that. Now, on the flip side when it comes to decreased usage, which, hey, maybe you ran a Zylo workflow and now you understand that you purchased way more than you actually need. So this year you want to rightsize your agreement. Well, just a lot of suppliers like to slap you with an increased unit price when you decrease usage. I always stress that you get a flat unit price. So hey, I know we're lowering by 20 licenses, but we've only budgeted for our previous unit price and it'd be outside of our budget if we had the higher unit price. Push, push, push on this. Also, make sure you understand what SKUs of products you're buying. So hey, you have Salesforce and you're also buying MuleSoft. Try to bundle these services together on to one agreement to show your increased purchasing power. Next, we have multi- year contracts. So multi- year contracts are a really great way to get out of those high inflation costs that you may be seeing on annual agreements. So locking in a longer term is actually mutually beneficial to you and the supplier. You have a locked in good guaranteed price and they have guaranteed revenue. Oftentimes for three- year agreements, you can see up to 15% off unit prices. One important point to note is making sure you have flat year- over- year prices for multi- year agreements. Don't let suppliers sneak in a 5% increase year- over- year if you're signing a multi- year agreement. If you sign multi- year, you should get the same price every year unless you have growth built in within that. Next is early signing. I know we've talked about how important it is to be proactive, but it's really critical because there's a lot of levers you can't take part in if you aren't starting early. So early signature is really key way to get some easy savings. Understand when your supplier's end of quarter or end of year is and try to sign your agreement prior to that date. This may be three to two months before you need that renewal to be signed, but it's important to ask the supplier, " Hey, we look like we know what we want with this. Are there any timelines, any early signing initiatives that we can take part in? If we get this done by the end of the month?" It never hurts to ask. I've saved 20, 30% just asking that simple question to a supplier. So be sure to take part in this.

Fab Reissner: Some additional negotiation levers are competition. Leverage competitors in the space. Do your due diligence on the players in the game. Your use case might be better suited for one of their competitors, or they may even have better pricing. Payment terms. Take a look at your current payment terms. If you're currently on net 60 or net 45 or maybe you had negotiated quarterly and semi- annual payments previously, you can take a look at what your position is. And if it's changed, then suppliers will always prefer net 30 annual over any of the previous ones I mentioned. That could potentially get you better pricing overall. And making sure that you're negotiating uplifts and price cap language can save you major headaches down the road. This can be as simple as removing a price cap altogether or reducing it from 10% to 3%. Make sure to keep an eye out for these because they generally get snuck into agreement if you're not looking for them. If price isn't competitive enough, don't be afraid to involve leadership. Have the CFO send a quick email as the final push to get you where you need to be. You'd be surprised at how effective that technique is. Does your company allow for logo usage or marketing rates? A lot of suppliers will give you some hefty discounts in order to attract more business when you're at an impasse on cost reduction, free months of service, free licenses or a free product to pilot versus a reduction in cost is also a big win, so don't sell yourself short.

Tory Kaigan-Kuykendall: Awesome. Thank you, Fab, so much. Those are some amazing negotiation levers that I've used a lot. Both Fab and I are members of the managed services team. As part of that team, we provide SaaS negotiations for our customers. So if you and your team are struggling with negotiations this year and want a little bit of professional support, feel free to reach out to Zylo and get some information on our SaaS negotiation services. We help all of our customers with both renewals and new purchases, and we really take that pressure off these IT teams because we're able to facilitate with all internal teams and work directly with your suppliers for you.

Fab Reissner: If you're not a customer yet, we're more than happy to support whatever your needs are from benchmarking to process improvement. Thanks so much for joining us. If we didn't get to your questions, we will answer them after this session. Enjoy the rest of SaaSMe.

Tory Kaigan-Kuykendall: Whoo, go SaaSMe. Thanks guys.