Contract renewals are nothing new. You know the drill…
But even the best practitioners can get caught in a bind when it comes to renewals. Every seasoned market data professional has a horror story. The auto-renewal missed by a day. The contract cancellation window that came and went unnoticed. The business unit that wanted out, only to find itself locked in for another year at full price.
When the dollars involved run into the hundreds of thousands, these aren’t just small mistakes – they’re budget killers. In some cases we’ve seen over the years, even career killers. And in an industry where market data costs are scrutinized like never before, even the basics deserve a second look.
Here are six reminders worth keeping top of mind:
1. Early preparation = leverage
Leave it too late, and the balance of power naturally shifts to the supplier. Start reviewing contracts 60-90 days before key dates, longer for major deals. If you’re scrambling near the deadline, expect limited negotiation room and higher renewal costs.
2. Know when suppliers feel the pressure
Don’t forget vendors have sales targets, too. The best time to negotiate isn’t when they’re holding all the cards – it’s earlier in the renewal cycle. Be mindful of catching your account reps when they need to fill their pipeline with deals, and you might just find cost reductions or better terms on the table.
3. It’s not always about the price
If a supplier just won’t budge on cost, encourage your business to think creatively about other use cases, additional users or expanded features instead that create value. On the flip side, if you’re paying for access you don’t need, scaling back rights can also serve as a point of negotiation.
4. Evergreen contracts = hidden costs
Evergreen (perpetual) contracts are the easiest to ignore, but the easiest to waste money on. Review them regularly. If you don’t need a service, cancel before the renewal window. If you’re unsure, usage tracking tools can build a picture to allow you to right-size.
5. Track contracts like your budget depends on it (because it does)
Managing market data contracts without an active renewal calendar is a disaster waiting to happen. Use contract management tools to flag key dates and track commitments. Nobody wants to tell their boss that they missed a six-figure cancellation deadline.
6. Don’t accept supplier usage data at face value
Supplier-generated usage reports can be vague, or worse, misleading. From the start, set clear expectations for what data you need and include it in your contract. If possible, collect independent usage data so you’re negotiating with facts, not just what a vendor tells you.
And one last thing…
We’ve seen near misses. We’ve seen costly mistakes. And we’ve seen firms locked into contracts they could have revised – if only they’d acted sooner. Don’t let contract renewals be an afterthought. The right process, tools and timing can mean the difference between a smart renewal and an expensive oversight.
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