SaaS vendors are sliding a nasty detail into SaaS renewal term price protections: taking a “3–5% cap” and multiplying it by the number of years in your next term (e.g., 3% × 3-year = 9%). That’s not a cap—that’s compounding pain. Adam shows how to spot it, why it’s spreading, and exactly how to push back.
Key takeaways
- There needs to be a cap on the increase a SaaS vendor can apply to your pricing at renewal
- A price increase should happen one-time at renewal
- Price increases at renewal should not go up with more term commitment
- Make this a front-of-funnel pricing issue (tie it to discount asks), not a late legal cleanup.
- Longer term should mean better protection (e.g., 3-year cap 3%, 5-year cap 2%), not a bigger increase
- Vendors watch each other and manage to what Wall Street wants to see (increases to downstream revenue). Expect this tactic to spread unless you push back.
How to negotiate
- Insist on one renewal uplift cap (define exactly what it applies to)
- Remove conditions that hold you hostage to volume/product mix
- Tie discounts today to locking in clean renewal language now.