What is a co-term?
In this case, “co-term” can mean one of two slightly different things.
On the one hand, it means setting up an account’s subscription license term, which makes co-termed licensing.
Plus, if an account has more than one subscription signed up for at different times with a supplier, and all of those subscription licenses are up for renewal at different times of the year, they are all bundled together and given the same renewal date as the original agreement.
People who work for software companies often use this method.
When an account’s goods, solutions, devices, and support services are combined into a single co-term support contract, this is called “co-terming.”
The only thing that makes it different is if it’s a subscription license or an agreement that combines goods and services. Once more, this is a standard method that many software companies use.
Synonyms
- Co terminate
- Coterminous quote
- Co-term subscriptions
- Co-term renewal
- Co-term software licenses
How co-terming can help you make more money
Utilizing the co-terming method has numerous benefits, and one of the most important is that it greatly aids in income growth.
It can significantly improve cash flow for companies that sell multiple subscription-based software licenses for services to the same account. This is because all subscription renewals are synced to the original active license, meaning the company has more cash before the next renewal.
Pros for Buyers of Co-Termed Subscriptions
You can save money on billing fees and other costs by co-terming subscription rights. This is good for both sellers and buyers.
In addition to making the billing and purchasing cycles and budgeting easier, co-terming makes renewing a subscription license much more efficient and easier to handle. It also keeps licenses from expiring, harming a buyer’s day-to-day operations.
Many companies also offer deals for new subscriptions that last more than one year, saving buyers a lot of money.
They can also save time and money on paperwork because they only have to keep track of one contract number and term.
How CPQ software can help you keep track of co-term subscriptions
Not all businesses will want to offer co-terms for their subscription rights for different reasons. However, those who don’t could be missing out on a lot.
Customers may leave if they can’t change their subscription plan to a cheaper one, add or remove goods or services from their plan, or change their renewal date. This is called mismanaging co-term subscriptions, and it can cause customers to leave.
Customers don’t want a complicated way to pay for their subscriptions; if they do, they’ll go with someone else to save themselves the trouble.
Not only can set up multiple contracts quickly and easily, all with the same start and end date, make the difference between getting a new customer and losing one, but it can also help keep prices correct and licenses from expiring.
That’s what a CPQ software system can do. Dealhub’s CPQ solution, for instance, will instantly combine all of an account’s billing into a single co-term invoice. This invoice is then stored in your existing CRM system or billing software.
As a result, the company can offer more significant savings because of lower administrative costs. This is great for the buyer, but it’s also easier for both parties to pay because there’s only one contract and one renewal date. It’s a win-win situation.
