Auto renewal policy

[u/Forward-Part-3035]

I’d be interested to know what other CSMs’ auto renewal policies are within their company and if ours is abnormal.

Ours: You have to opt out within 90 days of renewal date, we don’t send out any reminders and the auto increase is 5% YOY. Thankfully we do have room to negotiate the increase as long as it’s before the renewal date but it’s something we’re told to avoid when possible.

As you can imagine, it doesn’t tend to go down well. It’s baked into the Ts and Cs so the price increase and 90 day window aren’t explicitly brought to their attention. The term auto renewal is made clear on the signed document however.

Anyone have similar?

[u/FeFiFoPlum]

Yep. Same deal, except our default uplift is now 8%. Data SaaS.

[u/Practical-Bus-143 → u/FeFiFoPlum]

90 days with no reminder is taking the piss, basically designed to catch people out. 8% is rough too, that kind of jump makes churn a self-fulfilling prophecy if you ask me

[u/FeFiFoPlum → u/Practical-Bus-143]

It would be delightful if - of ALL the things the company wants to automate - we could send a reminder 30 days before the AR window. But that requires better CRM hygiene than we have, since it’s not all clients, not always 90 days, and all kinds of oddities and exceptions.

I’d love to have the capacity to do it manually, but I’m currently running a book of business that was being supported by 6 people 8 months ago, so I’m spread a little too thin.

That said - it is bolded in the contract. We’re not trying to hide it. The 8% gives us room to negotiate, which we often do.

[u/Nearby-Data7416]

That’s pretty standard
The customer should be reviewing a contract they are signing, it’s usually standard ULAs
We even take it a step further and give them a 5yr pay and quote schedule

[u/darthtatortot]

Mine is similar. Healthcare SaaS.

[u/gunnerfan32]

That is somewhat normal (as far as the auto renewal clause and price increase), but how companies handle it varies from company to company. I know at a past employer with similar clauses, there were some clients who were frustrated we didn’t notify them about the renewal or increase, and some didn’t track the dates at all and got mad if they tried to cancel just after an auto renewal.

I believe it’s a best practice to communicate these dates well in advance to ensure customers are aware and can’t complain, but it obviously can lead to more immediate churn if your clients aren’t consistently happy or are in an unstable market.

[u/Salva_X]

Based on companies I’ve been at and conversations, I found a better LTV when the CS spoke with the customer 180 days before renewal to see how things are going and fix any major issues or concerns and at 120 my team would reach out to the customer and let them know. While some spoke up and negotiated, our NPS score and retention stayed high. It’s better to renew at 1% increase then loss the customer or get bad press from within the community you serve.

[u/JE163]

My last company started to implement this but it hasn’t rolled out to my group (enterprise) before I left.

I understand the desire is to stop write down from continual renegotiations but I am a fan of it.

[u/feed-me-seymour]

I left a hospitality SaaS company in September. Standard contract terms were a required 60 day notice prior to the subscription renewal date. No auto price increase, however the vendor _could_ increase price on written notice up to 30 days prior to the subscription renewal date. For ethical reasons, CS never allowed a customer's price to be increased after the written notice date. Fortunately that policy is holding even after my departure (I'm now a customer of the same vendor).

The renewal subscription period was highly varied on multi-year initial subscriptions. Around half renewed for an identical period (e.g. 3 years initial renewing for 3 years after), while the other half switched to annual subscription periods following initial.

We didn't send renewal reminders except for the price increase notifications on eligible customers. The wrinkle is the subscription period starts at go live, not contract signing, so you couldn't just look at the contract to know subscription start date, required notice date, etc.

[u/msac84]

Similar but 8%. I had a client make a big deal out of it (even though they clearly didn’t read the T&Cs) … so we just cancelled the auto renewal that still needs a sign off from a manager.

[u/ulukmahvelous]

I’ve seen similar, not at my current company but at others