What options do I have if a SAAS based organization is enforcing auto-renewal?

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JASON LEMKIN

This is answering the other “side” of the question, but I strongly recommend SaaS vendors do not attempt to enforce auto-renewals … other than by shutting off the service.

Auto-renewals are for the most part, a “screw you” for customers in practice. Forget to send an email notice? Didn’t schedule it proper as a reminder? Well, you’re on the hook for another year! Tough luck! Even if you never use the product the next year, or even, used the product the preceding year.

Having said that, SaaS vendors definitely want auto-renewals. It’s a huge headache, and waste of resources, to have to go out and manually renew contracts each year.

I’d suggest the best compromise it to have autorenewals, but if the customer never pays you for the next year, simply shut off the service. They will either quickly pay then — or they won’t. And make sure you give them plenty of notice to pay up first. You didn’t earn the renewal anyway if they don’t mind the service ending.

Suing a customer is tough, and threatening to sue a customer is almost as bad, as is sending them to a collections agency. You’ll never get them back if you do. And they will bad mouth you. And it takes too much energy to deal with these issues, anyway. Just let it go.

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Published on December 26, 2017
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