Before You Auto-Renew: 12 Questions to Ask About Any Tool
Software has changed more in the past three years than the decade before, and that isn’t slowing down. The landscape has changed for every category on the market. For some in subtle ways, others dramatic. Some categories are entirely new.
Somewhere in your stack there’s a renewal date you aren’t on top of. That’s true of 99% of companies. Whether it’s a core item like your loan origination system or CRM, or something niche that became essential three years ago. If you’ve got auto-renew on, then that unobserved date will carry over year to year until finally someone asks, “why are we paying for this?”
When’s the last time you were caught unaware by a renewal? How much did that sting, how many projects were put off by an inability to shift away from your current provider?
Every renewal is worth a pause, and genuine questions about what value this tool is bringing, what more could be gained, and what the alternatives are. This isn’t an argument to switch anything, it’s an argument to decide purposefully, change or no change.
When Auto-Renew Makes Sense
Don't just auto-renew. Make the vendor earn your renewal. Very few tools in any stack are irreplaceable. It's our perceptions of day-to-day tools that make it seem like every third subscription is “necessary.”
For many organizations, renewal management is a squishy, non-standardized process. Original buyers move on. Departments quietly off-ramp. Notice windows creep up, and before you know it you’re locked. Multi-year terms dangle attractive discounts, while holding the threat of “all or nothing” terms behind their backs. Depending on the vendor, maybe they don’t negotiate at all.
But it doesn’t need to be that way. At your renewal you have your vendor’s full attention. If they’re serious, they know they need to win your confidence again, like they did when you first signed. When you as the buyer approach renewals as a conversation, oftentimes you uncover better terms, benefits, or add-ons that would have passed you by had the auto-renew stayed undisturbed.
And in other cases, circling up with your vendor makes it clear that they’re no longer the fit that they once were.
More Options Than Ever, Everywhere
It’s a good problem to have as a buyer. The explosion of AI enablement has led to an incredible blossoming of new competitors and disruptors in established spaces. Hard for sellers, great for buyers.
It also means that the tool you were sold on, however many years ago, may not be the best fit today—or even the best version of itself. New vendors are building on newer foundations. Established ones are shipping at a different pace. Some products have grown with their customers, and some have stayed put. “New” doesn’t always mean better, and there are risks that go along with adopting new technology. Not to forget the implementation, down time, re-skilling, and other HR costs. But contrasting the cost of a switch to the opportunity cost of staying put isn’t always simple.
We asked our Principal of Mortgage Platform, Rebecca Frisbie, her thoughts on the software renewal circus:
The software landscape is changing so quickly that one vendor may support something natively that you are paying for with another. With the market where it is at the moment it is in every company’s best interest to perform their research and assess whether their current tech stack is living up to the ROI that was promised and if not, weigh the opportunity cost of switching. Longer term contracts could hinder your ability to evolve and improve at the rate of your competition.
— Rebecca Frisbie
She raised an important point: some tools’ centrality has been eroded by new, standalone platforms while others have merged and made more inclusive offerings. Every renewal for a tool on your belt is a chance to look at the whole of your stack, and make sure that you aren’t paying for the same functionality in multiple places. It pays to be aware of new options as they emerge, and the more aware you are of your full stack’s functionality the easier it is to discern if a new tool will replace or augment what you’re already paying for.
Before Renewal: Ask Your Team
Like we said, every renewal is an opportunity to review, not just a negotiation. But without a process, that becomes its own time sink. At Tidalwave we’ve created an entire project within our CRM to track the renewal dates, notice terms, costs, and owners for all of our subscription tools. It only takes one time overlooking a five-figure renewal to learn to value proactivity with vendors. With that, we have automated reminders that give our teams enough time to convene, review, and decide if we want to look at alternatives.
Start earlier than feels necessary, ideally well ahead of the notice deadline in your contract. Gather the people who use the product daily, since they know things no vendor dashboard shows. Ask a few alternatives for demos, even if you expect to stay. And ask your current vendor the same questions you’re asking everyone else. A good vendor welcomes it.
And, be sure to poll your end users. Someone in your org may have heard of something new, or seen a partner using a tool that caught their attention. If someone doesn’t feel a part of the conversation, the best option available may never make it to the table.
If you’re not sure where to start with evaluating tools, take a look at these focusing questions you can use with your team.
Is it doing the job we bought it for?
1. What problem were we solving when we bought this, and is it still solved?
2. Which features do we use every week, and which have we never touched?
3. Are people working in the product, or around it with spreadsheets and workarounds?
Has the product kept pace?
4. What has this vendor shipped in the last year that made our work easier?
5. Does their roadmap match where our business is going, not just where it was?
6. When we’ve asked for improvements, what happened?
What does it really cost?
7. What is the full cost, including add-ons, integrations, services, and the staff time spent keeping it running?
8. Would the same money buy more elsewhere?
9. Is the price tied to how we use it, or to how long we’ve been locked in?
How easy is it to change course?
10. Can we export our data in a usable form, and what would it take to move?
11. Is the term length something we chose, or something we were handed? Would a shorter term, or a pilot with another option alongside, be possible?
12. If we weren’t already a customer, would we pick this today?
If most of your answers come back confident, great. Renew with a clear conscience, and maybe negotiate something better. If several come back uncertain, you’ve found your next project.
The bottom line
The best customer relationships are the ones where both sides keep choosing each other. A renewal is the natural checkpoint. Take a look around, ask hard questions, and decide with your eyes open.
At Tidalwave, we think that’s how every software decision should work. We’d rather earn the next year than assume it.