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What is the point of having multi-year contracts in SAAS if the customer does not pay upfront for the 2nd year?

What if the customer does not pay in the second year?

Direct Sales

SaaS

Sales Management

Shaun Nestor answered

If you have an enforceable contract, the client is obligated to pay for the services received.

As a business owner, I would be very concerned if a SAAS was demanding upfront payment for 2 years.

John S. Farhat answered

A multi-year contract helps you ensure steady revenue for your business. So long as it can be properly enforced.

There can be different payment models: monthly, yearly, full contract upfront, etc... And you can discount each of the terms appropriately. If I were a customer I would want some flexibility in how often and what I pay for.

But just like everything else, no payment / no service.

Steve Coltman answered

You tie in the customer.

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