Objective
Lower a proposed 2.5x subscription fee renewal increase by a big box SaaS CRM vendor and secure caps on future renewal pricing (to avoid the same problem in the future) —and do so within a 2-month timeframe (before the current term would auto-renew and the opportunity would be lost).
Approach
Seprio was brought in when the initial term for a SaaS CRM product ended and the vendor’s proposed renewal pricing was more than double the previous annual fee (a classic ‘bait and switch’ where vendors attempt to take back negotiated savings with large price increases in subsequent renewals). Seprio quickly created a project team and used our proprietary process to carefully craft the message to, and all other communication with, the vendor while establishing both the Client requirements (competitive price, desirable term, and proper ongoing price protection) and the potential benefit to the vendor (i.e. avoiding a reluctant, one-year renewal during which the Client would issue a full RFP). Seprio used market intelligence to determine what other buyers, both larger and smaller, were paying per seat for CRM and successfully negotiated the vendor down from their original proposal to a competitive (and substantially lower) rate. However, the vendor continued to resist any cap on increases and used a tactic of attrition to delay long enough that the Client would be forced, because time was up, to accept the vendor’s offer. Seprio escalated the conversation with the vendor, resisted their attempts to go around the project team to Client executives, and made it clear that if caps on increases were not built into the agreement, the Client would initiate a full-fledged RFP to find a new CRM vendor.
Results
Seprio negotiated a very competitive per seat price that, when combined with a $500,000 services credit, saved $3.2MM when compared to the vendor’s original renewal proposal. The vendor would not agree to perpetual price protection, but Seprio was able to lock the fees for the initial renewal term, and secure a predetermined one-time rate increase for a second renewal term, thereby giving the Client years of budget certainty and a clear path to a full RFP prior to the end of the second renewal term.
