When we talk about how hard it is to cancel SaaS subscriptions, it’s not just a sales tactic. We mean it. The SaaS industry thrives on making it easy for anyone for trial and buy – and harder to cancel.
Whether companies bury restrictive language in their contracts or hide behind vague terms to keep you from leaving, some practices have become downright predatory.
One software VC firm even had to write up the five most unethical sales practices as a reminder to companies in its space. Not everyone plays nice.
Each SaaS vendor that you thoroughly reviewed before signing a contract has its own cancellation policy and you will be one step ahead if you were able to carefully review and negotiate exits before you entered the SaaS contract.
There are some general recommendations that you can use as guidance to cancel any SaaS Subscription that will differ based on the value of the contract and size of the SaaS vendor you are dealing with.
SaaS cancellation process
- Read the Master Service Agreement (MSA).
Most termination clauses include the right for you to give 30-day/60 or 90 days' notice to cancel. Some vendors can try to negotiate a larger window, for example, going from a 30-day cancellation clause and get that to be 60 or 90 days instead.
- Oblige with the vendor’s cancellation policy (fees)
If you signed a pre-paid annual or multi-year SaaS contract in exchange for a discount or other terms, then there’s generally no reason the vendor will return any pre-paid cash. The contracts are generally not cancellable by your terms, so they can keep the cash.
Jason M. Lemkin gave an interesting SaaS vendor's perspective that you can use for tackling policies, “cash + usage are key”.
- Follow the Service Level Agreement (SLA)
SLAs include the termination processes on what happens to the data that resides with them and how it will be exported to you. The process should be clearly defined and followed once in action.
- Stay on good terms
Once the cancellation is done stay on good terms with the vendor because you never know when you will be needing their services again. Unless it’s an experience that’s described below.
Painful SaaS cancellation example
Recently Cleanshelf had a run-in with a particularly nasty vendor.
- Unauthorized credit card charges?
- Disappearing customer support?
- Have they misrepresented contract terms?
So, what happened? Well, one of our company goals is to constantly improve our connection with customers and prospects. To better engage with website visitors, we recently trialed a chatbot service called Drift.
After a month of testing, we concluded it wasn’t a fit and immediately canceled. No big deal. This was back in May.
Imagine our surprise, when, in June, we were hit with an additional $550 subscription charge. (Yes, we use our Cleanshelf product, and it flagged the expense. Yay!) Immediately, we wrote to Drift’s customer support and shared the mistake.
Five days later (yes, FIVE!) a Drift rep responded that we should “give them 30-day notice for cancellations.” We did a double-check and, as expected, this wasn’t in the contract or explicitly communicated anywhere.
No doubt this is a standard process: it sounds legit enough, probably scares off most companies and lets them squeeze a few hundred bucks from unsuspecting customers.
But not us.
The saga continued ...
We reconnected with Drift and reminded them of our intent to cancel. We even shared the date-stamped email proving our request. Case closed, right?< Not quite. One month later, Drift hit us with another $550 charge.
Apparently there’s a disconnect between sales, customer support and a new-to-us team called Customer Advocacy when there’s money on the line. Someone didn’t get the memo we cancelled, or that our bank was investigating the charge. Even the name of the team we were dealing with was a misnomer; it sure didn’t feel like anyone was advocating for us.
One process was working, however.
An automated message from a cheery-looking avatar on Drift’s Conversational Marketing Customer Service Team showed up in our inbox a month later:
“Hey Dusan, did you have any feedback for us?”
SaaS cancellation is a nasty business. We know this first hand and from the countless stories, we hear from our customers. That is why we created the Cleanshelf platform.
Companies with dozens or hundreds of SaaS apps can’t be expected to manually manage a growing suite of services and terms. Renewal dates come and go. Surcharges and price increases get quietly applied. Overages and drawn out cancellations are the new normal in the cutthroat world of business apps.
Cleanshelf lets growing companies stay on top of their subscription software. Dashboard views of license and vendor use, department breakdowns, pricing intelligence, and renewal reminders make it easier than ever to get the most out of your SaaS budget.
Tired of dealing with bad SaaS actors?
Ready to start controlling your enterprise SaaS?
Cleanshelf is the leading enterprise SaaS management platform focused on tracking, controlling, and benchmarking SaaS applications. Their SOC 2-compliant and AI-powered technology helps companies save up to 30% on their SaaS spending by automatically identifying unmanaged contracts, duplicate licenses, and wasted cloud software subscriptions. Based in San Francisco, Cleanshelf provides an enterprise-grade solution to over a hundred clients, including Hilton, Looker, and CoStar Group.