How to Optimize Your SaaS Costs: A Practical Guide
Most companies overspend on SaaS by 30% or more. Learn proven strategies to reduce costs while maintaining productivity.
1 SaaS Spending Audit
Start by listing every SaaS subscription your company pays for. Include corporate cards, expense reports, and department budgets.
You'll find surprises: duplicate tools, unused subscriptions, and shadow IT purchases you didn't know about.
Calculate the total: average companies spend $2,500-4,000 per employee per year on SaaS. How do you compare?
2 Identifying Redundant Tools
Map tools by function. Multiple project management tools? Several video conferencing platforms? Consolidation opportunities exist.
Check for overlap between tools. Many platforms have expanded features that duplicate standalone apps.
Talk to users. Sometimes "redundant" tools serve different teams with legitimate needs. Sometimes they're just habit.
3 License Optimization
Audit license utilization. Most companies have 20-30% of SaaS licenses with low or no usage.
Rightsize licenses: do all users need premium features, or would basic tiers work for some?
Remove departed employees immediately. Create offboarding processes that include license revocation.
4 Negotiation Strategies
Most SaaS pricing is negotiable, especially for annual contracts or multi-year deals.
Time negotiations around renewal dates. Vendors are most flexible when they're trying to prevent churn.
Get competitive quotes. Even if you're staying, knowing alternatives strengthens your position.
5 Consolidation Options
Platform consolidation reduces integration complexity and training burden. But beware of vendor lock-in.
Consider all-in-one platforms for core functions: HubSpot for marketing, Microsoft 365 for productivity.
Calculate true consolidation savings: license costs minus switching costs, productivity loss, and implementation time.
6 Building a SaaS Policy
Create approval processes for new SaaS purchases. Prevent shadow IT before it starts.
Define evaluation criteria: security requirements, integration needs, budget thresholds.
Centralize procurement to negotiate better deals and prevent duplicate purchases.
7 Ongoing Management
Review SaaS spending quarterly. Contracts renew, needs change, and waste accumulates.
Use SaaS management tools (Zylo, Productiv, Vendr) for larger organizations with complex stacks.
Build a culture of tool accountability. Teams should justify renewals and regularly evaluate alternatives.
Key Takeaways
- Research thoroughly before committing to any software purchase
- Take advantage of free trials to test with your real data and workflows
- Consider total cost of ownership, not just license fees
- Involve end users in the evaluation process for better adoption
- Plan for integration with your existing tools and processes
Guide FAQ
Is this how-to guides up to date for 2026?
Yes, this guide was last updated on December 1, 2025. We regularly review and update our content to reflect the latest pricing, features, and market changes.
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This guide was written by Emma Wilson, our SMB Software Specialist. Emma specializes in software solutions for small and medium businesses. With experience running her own consulting firm, she understands the unique ne...
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