The SaaS industry needs no introduction. Its benefits are enormous, but so are the cumulative costs. Forbes estimates that the SaaS spend of businesses averages around $3500 per employee and many believe that the figure is quite conservative. Businesses that are not careful may easily get caught in a never-ending spiral of increasing costs without significant returns.

Optimizing your SaaS licensing and curbing shadow IT are some ways to control these costs. Also, seeking SaaS discounts can help you get the maximum value for your money and find the perfect balance between costs and benefits.

Securing discounts for SaaS subscriptions

An effective discount strategy isn’t simply utilizing any discount being offered. You may be tempted to do that, but an overall holistic approach is essential for the best results. 

The ideal strategy is to take a constructive look at what you might gain against what you might lose. And also how that would impact your organization’s performance. 

You must consider the long-term implications of the discount on your plan and existing operations. The right discount strategy for SaaS, however, can create long-term and solid relationships with existing vendors.

Key steps for the best discount strategies that maximize gains

SaaS discount strategies are not one-size-fits-all. All businesses will have some key priorities where they’ll be willing to spend more than usual.

The following steps will allow you to cater to those nuances and develop a strategy that maximizes the returns on investments. 

1. Analyze usage and needs

Before utilizing any discounts in the purchasing process, first assess your current SaaS usage and the immediate requirements of your company. 

While it’s tempting to offer a wide variety of tools to your employees, there might just be tools that are simply not being utilized. You can identify the necessity of that software to determine any potential cost-saving opportunities.

This inward look towards a company’s operations allows you to understand your company’s SaaS requirements. And it can also help you prioritize your needs during contract negotiations.

2. Consolidate vendors and bundle services

Some companies fall into the trap of availing all features offered by their SaaS vendors. Even the most effective businesses report not using around half of their SaaS portfolio features.

Similarly, companies may also end up paying two different vendors offering the same features. That’s why it’s imperative to review all existing SaaS vendors and their licenses to consolidate and remove any duplication.

Moreover, having an in-depth understanding of what your SaaS vendor offers has an additional benefit. It allows an opportunity to leverage bundled services against better pricing and tips the power to your benefit on the negotiation table.

3. Negotiate flexible licensing and contract terms

SaaS providers understand the need for flexible licensing options. And several SaaS programs operate on a modular basis to offer pay-per-feature or pay-per-user pricing. Understanding your business requirements will allow you to find the most optimal licensing option between the two.

And that’s not all.

A thorough look at the contract, such as cancellation policies, etc. not only allows you to negotiate more favorable terms but also facilitates discussions of scalability and contract adjustments as required.

4. Seek volume-based discounts

Many SaaS tools and solutions offer volume-based pricing models. You can take advantage of such discounts by determining optimal user thresholds and encouraging tool uniformity across the organization.

5. Establish long-term commitments and renewals

Many SaaS vendors offer several discounts to loyal users. That’s why it’s recommended to assess the feasibility of any SaaS solution for long-term commitment while approaching a vendor.

Similarly, prepayments also allow you to negotiate discounted pricing and have some additional cost savings.

6. Leverage collaboration and referral programs

You can also take advantage of different collaboration opportunities offered by SaaS providers. Several vendors offer SaaS discounts or credits on referrals.

Many providers offer an ecosystem of different SaaS tools that are offered together at discounted rates. You can also negotiate a special price by establishing strong business partnerships with other collaborating companies. 

7. Negotiate pricing

No strategy can ever be successful if your team isn’t prepared for in-depth budgeting discussions. This involves more than just looking at the company’s requirements. You need to gather comparative pricing details and extensive market research linked to the vendor’s competitors.

The ideal team on the negotiation table should be proactive with enough research to back their claims.

8. Leverage trials and proof of concept

One way to enhance your SaaS experience is to leverage trials and proof of concept (POC). Many vendors offer trial periods and POCs, allowing businesses to test the functionality and suitability of the tool before committing to a full subscription.

These opportunities can also be an excellent way to engage in direct communication with the vendor. And you can negotiate favorable terms based on your specific usage and anticipated benefits.

This approach not only minimizes financial risks but also positions your business for informed decision-making and more advantageous long-term agreements.

9. Monitor and re-evaluate expenses

An effective SaaS expense management extends beyond the initial negotiation phase. 

Regularly monitoring and re-evaluating your expenses is crucial for maintaining cost efficiency. Implement a robust tracking system to assess the utilization of each SaaS tool and its impact on productivity. Additionally, stay informed about industry benchmarks to gauge the competitiveness and effectiveness of your current SaaS portfolio.

This ongoing evaluation empowers your organization to make informed decisions, ensuring that your SaaS expenses remain aligned with your evolving business needs and market dynamics.

Simplify your procurement with Spendflo

Interested in getting exactly what you need and paying only for what you get? Cost optimization is an art and it goes beyond seeking discount strategies. Spendflo can help you maintain effective control over your SaaS costs. 

Simplify your vendor management processes, streamline your SaaS stack, and negotiate the best deals with Spendflo's comprehensive spend management platform. Experience more efficient purchasing, improved cost control, and reduced errors in your procurement journey. With Spendflo, not only do you save time, but you also unlock significant savings on your annual SaaS expenses.

Ready to unburden your finance team and enhance your vendor relationships? Get a free savings analysis with Spendflo today

Guru Nicketan
Content Strategist
Karthikeyan Manivannan

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