SaaS Management
Contract Management

SaaS Renewal Best Practices To Follow In 2023

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5 mins
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January 27, 2023
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In today's thriving market, SaaS is increasingly used for routine operations. You mention it, and there's a SaaS solution that helps you run your business more efficiently. SaaS cannot and will never be sufficient because it is widely used for various purposes. 

With a SaaS model, businesses can benefit from increased scalability and flexibility, as well as reduced cost and maintenance.

Despite a plethora of benefits, SaaS apps have their pain points, too: renewals. Keeping track of SaaS renewals is proving to be a significant obstacle for businesses.


1. It is hard to keep track of SaaS renewals, as numerous applications are used, and the renewals vary for each application. 

2. Businesses still use spreadsheets to manage their SaaS stack and track renewals.

3. Often, businesses end up auto-renewing their SaaS contracts due to a lack of an alert system.

But there is always a solution. As businesses continue to embrace SaaS solutions, you must learn SaaS renewal best practices to stay on top of renewals and avoid losing money due to auto-renewals. 

So let's get started,

What is a SaaS renewal process?

SaaS renewal is the process of renewing a SaaS agreement. It involves extending the existing agreement for an additional period and often includes renegotiating terms and conditions. 

SaaS renewal aims to ensure that the buyer continues to receive value from the product or service while providing an opportunity for both parties to review and update their contract.

SaaS contract renewal is an essential aspect of SaaS contract and vendor management and falls under SaaS governance. A proper SaaS renewal plan reduces the cost consequences of missed renewals and prevents the renewal of unnecessary apps. Furthermore, SaaS renewal will boost the visibility and understanding of your SaaS portfolio and help with SaaS security.

SaaS renewal strategy

Create a SaaS renewal strategy with clear criteria for ownership, negotiation, and auto-renewals to control your SaaS renewal process. A proper SaaS renewal plan reduces the costs of missed renewals and prevents the auto-renewal of redundant apps.

"The secret to SaaS success is acquiring new customers and retaining and expanding the ones you already have." Brent Adamson, Principal Executive Advisor at Gartner

The best strategies for managing SaaS renewals are planning, reviewing usage and user insights, negotiating with vendors, and evaluating alternatives. By planning, businesses can ensure they have enough time to review their usage and determine if they need to make any changes to their subscription. 

Analyzing usage

Reviewing usage will give you a better understanding of how the service is being used and can help identify areas for improvement. Negotiating with vendors will allow you to get the best deal possible, and evaluating alternatives will help your team make more informed decisions about their subscriptions.

Define an ideal SaaS renewal process

Another critical strategy for managing SaaS renewals is having a transparent process. The easiest way and recommended practice is to use automated SaaS renewal workflows, so you always stay vigilant about your renewals and take advantage of them.

Understand vendor’s capabilities

In addition, businesses should also consider the scalability of the service, the level of support offered, and the provider's financial stability to ensure the continuity of the service.

Furthermore, compliance and security concerns should also be considered, as well as measuring the ROI of the service before proceeding with the renewals.

What is a SaaS renewal rate - From vendor's perspective

The SaaS renewal rate is an essential metric for any business. It measures the percentage of customers renewing their SaaS product or service subscription. 

"The true test of a company's mettle is not how it performs in good times, but how it manages its business in bad times." The renewal process is a perfect opportunity to demonstrate a company's commitment to its customers." Marc Benioff, CEO of Salesforce.

So it is a crucial indicator of customer satisfaction and loyalty, showing how many customers are willing to continue using the product or service, renewal rate is also an indicator of customer lifetime value.

Knowing the SaaS renewal rate benchmark can help businesses understand how they perform compared to their peers and make informed decisions about their pricing, marketing, and customer experience strategies. 

An illustration to ensure SaaS renewal rate

The typical SaaS renewal rate is at least 80%, but some industries and companies have higher rates. For example, three-quarters of all developers renew their subscriptions to a SaaS product, while the average annual subscription cost for a developer in the U.S. is $811 per year.

However, renewal rates of more than 80% are regarded as healthy. On the other hand, the best-performing SaaS companies have a revenue renewal rate exceeding 100%. 

A suitable benchmark for SaaS churn is between 5% and 7% for annual churn and less than 1% for monthly churn. For young startups and SMB-market enterprises, an excellent yearly turnover rate is between 10% and 15% in the first year. Their monthly churn must be between 3% and 5%.

The SaaS renewal benchmark varies depending on the industry and the type of SaaS product. However, according to a study by Pacific Crest, the average SaaS renewal rate is around 90%. 

It is important to note that the renewal rate should not be the only metric businesses focus on. Businesses should also consider usage, net revenue retention, customer satisfaction, and churn rate to understand their SaaS product's performance better.

A survey by Okta found that SaaS companies with high customer satisfaction levels have renewal rates up to five times higher than those with low customer satisfaction levels.

SaaS renewal best practices to stay ahead of renewals

Renewing a SaaS contract can be an overwhelming process. It requires careful planning, review, and tracking to ensure you get the best value out of your renewal. To help make this process easier, here are ten best practices to follow during SaaS renewals,

Plan ahead

Always plan, preferably 90 days in advance. One of the best practices for SaaS renewals is preparation. Planning ahead includes setting reminders and starting discussions with your team well in advance of the renewal date. 

This will give you plenty of time to review your usage and determine if you need to make any changes to your subscription. Planning ahead ensures that you are well-prepared for the SaaS renewal process and have enough time to make informed decisions.

An workflow of renewal which is one of the SaaS renewal best practices

Platforms like CloudEagle provide renewal workflows. You can create a workflow that will initiate the reminders 90 days in advance; instead of just sending email reminders, CloudEagle will assign individual stakeholders and escalate them until you’ve renewed the contract. 

It works more like renewal guidance than a reminder, which most platforms provide. 

There are more feasible solutions than tracing reminders manually or via spreadsheets. The best way is to leverage workflows from platforms like CloudEagle to stay on top of the renewals.

Check out this exciting customer story of Falkonry and how they streamlined renewals using CloudEagle:

Centralized contracts

SaaS renewal best practices begin with how you organize your contracts. Once a new contract is signed, where do you store it? Do you have centralized, secure storage? Or do you use spreadsheets to track your contracts?

Most businesses use spreadsheets to track SaaS contracts, which is an unsecured practice. Instead, use a contract management tool to centralize your SaaS contracts.

So that, during internal auditing or SaaS renewals, you can find and retrieve all the required contract data in one place.

SaaS contract management dashboard of CloudEagle

Review your usage

Before renewing your SaaS agreement, reviewing your usage and determining if you are getting the most out of the service is essential. 

This means identifying features or services you're not using and additional features or services that could be beneficial. By understanding your usage, you can make more informed decisions about your subscription and ensure that you only pay for what you need.

Ways to review your app usage

There are two to do it,

1. Login to each application and check the usage manually.

2. Use a tool that provides real-time app usage insights, including impressions on the applications and details about the users using them. 

A dashboard showing SaaS app usage

Reviewing app usage manually is a time-consuming process. Instead, you can use SaaS management platforms to see who’s using the applications and how much they use them. 

It’ll also provide optimization insights that can be leveraged during renewal negotiations. 

SaaS contract negotiation with vendors

Once you clearly understand your usage and needs, it's essential to negotiate with vendors to get the best deal possible. 

SaaS renewal negotiation practices include asking for discounts or special terms and creating custom packages that better meet your needs. By negotiating with vendors, you can ensure that you get the best value for your money and that your subscription is explicitly tailored to your business needs.

But negotiations can be complex; a business uses 100+ SaaS applications on average, so negotiating through all the renewals can be cumbersome. This is where you need the help of assisted buying experts.

These on-demand negotiation experts will review your usage and requirements, re-negotiate with vendors on your behalf, and help you save on SaaS spending. They’ll do all the heavy lifting for you and get the best SaaS deals, while your team can focus on more strategic tasks or optimize more SaaS contracts. 

Evaluate alternatives

Evaluating alternatives is essential even if you are happy with your current SaaS provider. This means researching other providers and solutions that could better meet your needs. 

By evaluating alternatives, you can ensure that you are making informed decisions and taking advantage of better options.

Consider the price benchmarking data from CloudEagle. Get the latest updates on the pricing plans of SaaS vendors worldwide, compare them with your existing stack, see what your competitors are paying for similar products, and leverage the data during renewal negotiations. 

Create a renewal process

To ensure that your SaaS renewals are efficient and effective, it's essential to establish a straightforward process for renewing your agreements. This should include regular usage reviews, vendor negotiations, and a clear decision-making process. 

By having a process in place, you can ensure that your renewals are handled consistently and that you are always using the best possible solution for your business.

CloudEagle's SaaS renewal workflow section in app

You don’t have to spend too much time creating a SaaS renewal process. Just use the renewal workflows from SaaS management tools to stay on top of SaaS renewals. These workflows will ensure that you renew on time, as you can create a Slack channel specifically for workflows so your team can stay updated all the time.


Post renewal practices

Continuously monitor and evaluate the service

Once your SaaS agreement has been renewed, it's important to continue monitoring and evaluating the service. This means keeping track of usage, identifying areas for improvement, and working with your vendor to address any issues. 

By reviewing and updating SaaS contracts, you can ensure that you are getting the most out of your subscription and that it is meeting your business needs. This will help you identify services that may be redundant or no longer needed and cancel them, saving you money.

Track ROI of SaaS applications

Keeping track of the ROI of your SaaS subscription is essential. It’ll help you ensure that the applications deliver a positive investment return. By tracking ROI, you’ll know which contracts should be renewed or canceled. 

This will help you understand the value of the service and make more informed decisions about renewals. 

Businesses must utilize SMPs to track their SaaS services' usage, adoption, and ROI. This will help your team make data-driven decisions and identify areas for optimization. 

Communicate with your vendor

Keep open lines of communication with your vendor and discuss any concerns or issues you may have. Communicating with SaaS vendors can address any issues and ensure that your service meets your business needs. 

As you renew your SaaS agreements, it's important to ask your vendor about their future roadmap, features they plan to add, and plans to support the existing features. This will help you understand the vendor's vision and plan your usage accordingly.

Also, before renewing SaaS agreements, it's essential to ensure that your vendor is financially stable and able to continue providing the service in the future. This will ensure the continuity of the service and give you peace of mind that your business will not be affected by any unexpected disruptions.

By following these SaaS renewal best practices, businesses can ensure that they are getting the most out of their SaaS subscriptions and using the best solutions for their needs. 

SaaS renewal challenges and how to overcome them 

Managing SaaS subscriptions and renewals can be challenging for businesses of all sizes. Businesses often need help managing their SaaS investments. Read on to learn about overcoming SaaS renewal challenges.

Lack of visibility into usage and adoption

One of the biggest challenges businesses face when renewing SaaS agreements is a need for more visibility into how their team uses and adopts the service. This can make it difficult to determine if the service is providing value and if any changes or adjustments need to be made. 

Dashboard showing app usage which is a best practices for SaaS renewals

To overcome this challenge, businesses should establish regular reporting and usage tracking to better understand how the service is being used and identify areas for improvement.

To get SaaS visibility, you can use tools like CloudEagle, which displays all your SaaS stack, including the usage and spending data, on a single dashboard. 

Difficulty in negotiating with vendors

Another challenge businesses face when renewing SaaS agreements is negotiating with vendors. Many businesses struggle to get the best deal or terms for their subscription and may end up paying more than they need to. 

To overcome this challenge, businesses should research and be prepared to negotiate with vendors. This includes clearly understanding their needs and usage and being willing to walk away if a vendor is unwilling to offer a fair deal.

If your procurement team doesn’t have enough bandwidth to negotiate with all the vendors, you can seek assistance from SaaS buying experts who can negotiate for you and secure the best deals. 

Limited budget

Renewing SaaS agreements can be challenging for some businesses due to budget constraints. They may need more funds to renew a subscription at the current price point or may not be able to afford to add new features or services. 

To overcome this challenge, businesses should review their usage and determine if they are getting the most out of the service and if there are any areas where they could cut back or adjust to reduce costs.

Have a clear understanding of your budget before renewing. Perform a thorough cost optimization check before proceeding with the renewals. Check if your teams are using apps with similar functions and remove them. 

Difficulty finding the suitable alternative

When renewing SaaS agreements, finding a suitable alternative can be challenging. They may need to be aware of other providers or solutions that could better meet their needs. 

To overcome this challenge, businesses should use a vendor research tool to research and evaluate alternatives, even if they are happy with their current provider. This will give businesses a better idea of the market and help your team make more informed decisions.

Poor vendor monitoring

One of the challenges businesses face during renewals is poor vendor monitoring. 

As part of the renewal plan, you must determine whether to renew the contract or shift to a different vendor. But poor monitoring makes it hard for businesses to track the costs and value that vendors have provided. 

Moreover, vendors often change their plans and pricing policies annually without making any announcements. So with poor monitoring, the renewal process gets more challenging, primarily if you deal with several vendors. 

To address this challenge, businesses require efficient SaaS vendor management software. You can optimize your existing SaaS stack with vendor management software to boost productivity, decrease complexity, and reduce wasteful costs

Thus, taking these steps and following the strategies mentioned above can help overcome SaaS renewal challenges.

How does Cloudeagle make SaaS renewal management possible?

CloudEagle is a SaaS management tool that helps businesses manage their subscriptions and automate the renewal process effectively. It offers a range of features and services to help enterprises to optimize their SaaS investments and ensure they get the most value from their subscriptions.

One of the key features of CloudEagle is its contract management feature. This feature allows businesses to easily manage their SaaS contracts and keep track of important information such as contract expiration dates, renewal terms, and pricing.

The contract management feature of CloudEagle allows businesses to upload and store their SaaS contracts easily, making it easy to access and review the terms of their subscriptions during audits or renewals.

This can help businesses ensure that they are in compliance with their contracts and identify any potential issues or areas for negotiation before the contract comes up for renewal.

CloudEagle's dashboard

Centralized dashboard

CloudEagle also offers a centralized dashboard that provides businesses with a single view of their SaaS subscription. 

This allows businesses to quickly and easily manage their subscriptions and view important information such as subscription costs, usage data, and renewal dates. Besides this, it can help businesses identify patterns in usage and opportunities to optimize their subscriptions, such as by consolidating subscriptions or renegotiating pricing.

Renewal management

CloudEagle's renewal workflows can make renewing SaaS contracts much easier and more efficient. The platform allows businesses to set up automatic reminders and notifications for contract renewals so they don't have to track the expiration dates manually.

This feature allows businesses to set up automatic reminders and notifications for subscription renewals 90 days before the expiration date. This ensures businesses have enough time to negotiate better terms with vendors, plan their SaaS investments more effectively, and avoid unexpected costs.

SaaS Spend management

CloudEagle allows businesses to keep track of their SaaS spending and identify areas where they can reduce costs. Businesses can analyze their subscriptions and usage data, thus allowing them to determine which subscriptions provide the most value for their money and which ones should be canceled or consolidated.

In summary, CloudEagle's contract management feature and renewal workflows make managing SaaS contracts more straightforward and efficient, allowing businesses to focus on growing their business rather than managing subscriptions. 


The SaaS industry is constantly evolving, and businesses must stay on top of the latest trends and best practices to ensure they get the most out of their subscriptions. 

"SaaS companies live and die by their renewal rates." "If you're not thinking about retention from day one, you're making a big mistake." Jason Lemkin, Founder and CEO of SaaStr

By following the SaaS renewal best practices and the SaaS renewal strategy ideas discussed in this blog post, businesses can ensure that they are getting reasonable renewal rates and the most value for their money, using the best possible solutions for their needs, and being prepared to face the challenges that may arise during the renewal process. 

Additionally, businesses can save money, improve efficiency, and maintain a competitive edge by having a proactive, comprehensive, and well-coordinated approach to upcoming SaaS renewals. 

Remember, SaaS renewals are not a one-time event but a continuous process requiring ongoing monitoring, evaluation, and adjustments to ensure that the services align with the company's needs and objectives.

So, the ultimate practice is to use a platform to stay on top of renewals all the time. 

Frequently asked questions

1. How Do I Manage My SaaS Renewal?

To manage your SaaS renewal, you can use a SaaS management tool like CloudEagle to automate the process and provide visibility into your subscriptions, usage data, and costs. 

Additionally, you can set up automatic reminders and notifications for subscription renewals and use the tool's cost optimization feature to identify areas where you can reduce expenses. 

Also, negotiating better terms with vendors and implementing a 90-day advance renewal can help you get more value out of your SaaS subscription. Reviewing and optimizing your subscriptions to align with your business needs can also help ensure you get the most value from your SaaS investments.

2. How can businesses ensure they get the most value from their SaaS subscriptions before renewing?

Businesses can ensure they get the most value from their SaaS subscriptions by regularly reviewing and optimizing them to align with business needs. Businesses can also use SaaS management tools to track usage and monitor costs to identify areas where they can reduce expenses. 

Written by
Joel Platini
Content Writer and Marketer, CloudEagle
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