The Auto-Renewal Trap: Reclaiming Leverage on Your Biggest IT Contracts

Auto-renewals are vendor gold mines. One client had 43 contracts auto-renewing with 12-18% price increases—$1.4M in automatic increases nobody approved.

## The Auto-Renewal Problem

Typical clause: "Contract auto-renews annually unless cancelled 90 days prior to expiration."

What happens:
- Notification buried in 40-page agreement
- No calendar reminder set
- Miss deadline by 2 days
- Locked in for another year at vendor's price

## The Renewal Calendar System

**Step 1**: Inventory every contract >$25K
- Contract start/end dates
- Auto-renewal terms and notice periods
- Price increase clauses
- Termination requirements

**Step 2**: Set 3-level alerts
- 180 days: Begin market research
- 120 days: Get competitive quotes
- 90 days: Deadline to cancel/renegotiate

**Step 3**: Build negotiation leverage
- Have alternatives ready
- Document usage vs. licensed amount
- Benchmark against market rates
- Be willing to walk away

## Contract Clause to Demand

Old: "Auto-renews annually with 90-day notice"
New: "Renewal requires mutual written agreement 60 days prior to expiration"

Vendors will push back. Counter: "We prefer partnership over auto-pilot." Most agree.

Real savings: Financial services company implemented renewal calendar, renegotiated 23 contracts, saved $890K annually.