A 5-year SaaS deal looks like stability

This past week, I’ve been speaking with more clients across both the IT and Fintech sectors.

Things are starting to move in a healthy direction - my systems are running smoothly, my outreach is consistent, and the results are beginning to compound.

What really stood out to me, though, was how powerful consistent communication can be. The more I share what I do, the more people begin to understand how I think and operate. That transparency builds credibility.

That’s how my content recently started circulating in a few BNI groups - not because I pitched, but because I simply shared what I was working on. It was a reminder that clarity and openness build trust faster than any elevator pitch ever could.

And that same principle of clarity brings me to something I’ve seen repeatedly in SaaS - a pattern that looks smart at first, but often backfires quietly over time.

The 5-Year Trap in SaaS

On paper, a five-year SaaS deal looks like a win. It gives you predictable revenue, long-term stability, and a sense of comfort that your next few years are financially covered.

But in practice, stability without flexibility is a slow squeeze.

Because while your revenue stays fixed, your costs don’t. Two years in, your infrastructure costs climb.

Your team grows. Inflation rises. New security or compliance requirements appear. Every year, your cost base shifts upward - but your client’s payments don’t.

And one day, you realize that the “dream deal” you once celebrated has quietly become a constraint.

The client keeps paying the same price they agreed to years ago. You keep delivering with thinner margins and more effort. And when you finally bring up a price revision, they simply say, “But that’s not in the contract.”

They’re not wrong - they’re just holding you to what you signed. That’s the danger of static pricing in a dynamic industry.

The Smarter Way to Structure Long-Term Deals

The good news is, long-term contracts don’t have to be a trap. They can still give you stability - as long as you build flexibility into them from the start.

Here’s how you do that:

1. Add price adjustment clauses.

Link your pricing to inflation or define annual review mechanisms. It’s a simple addition that ensures your revenue keeps pace with real-world costs.

2. Define clear review periods.

Every one to two years, allow either party to revisit pricing terms. This keeps the relationship balanced and prevents resentment from creeping in.

3. Link pricing to scope.

If the client’s usage, user base, or feature requirements grow, the pricing should automatically adjust. This helps your revenue align with actual value delivered.

4. Communicate early and transparently.

Before signing, make it clear that your pricing model is designed for fairness, not rigidity. Clients respect this more than you might think -especially enterprise ones who value long-term alignment.

Because while “fixed” pricing sounds stable, it can quietly break your business model when growth or inflation enters the picture.

TL;DR

Five-year SaaS deals may seem like security, but without built-in flexibility, they can quietly suffocate your margins. Costs rise, but revenue doesn’t.

The fix is simple: include price adjustment clauses, review periods, and scope-based pricing. Flexibility today prevents friction tomorrow.

Conclusion

When I speak with founders, I often remind them that long-term deals should buy you freedom, not friction.

If your costs rise every year, your contracts should reflect that reality. And the only way that happens is if you define it clearly before the handshake.

A well-drafted contract isn’t about mistrust - it’s about alignment. It ensures that both sides can grow together, sustainably and fairly.

Because in SaaS, it’s not the deal you sign that defines your success - it’s the clarity you build into it.