Biannual Cost-Value Review
Cut low-value costs and renegotiate the rest twice a year
- Difficulty
- Easy
- Time to result
- ~days to results
- Steps
- 5
- Confidence
- 98%
Kagan describes a twice-yearly review of every contractor and software subscription. The reviewer records each item's price and rates its return or value as low, medium, or high. Low-value items face a binary action: cancel them or negotiate the price down. High-value items are generally retained, but the company still asks whether a discount is available. The mechanism prevents recurring costs from becoming invisible and separates emotional attachment from an explicit value judgment. It also turns negotiation into a scheduled operating process rather than a reaction to a crisis. The same review can be used personally or professionally, provided the reviewer examines the complete list rather than a handpicked subset.
Origin
Kagan explains that AppSumo performs this review twice a year across contractors, software subscriptions, and other recurring costs.
Core principles
- 01Review every recurring cost, not just the largest ones
- 02Judge cost against value rather than price alone
- 03Cancel low-value items before optimizing high-value ones
- 04Ask for better terms even on valuable expenses
How to run it
- 1
Build the full cost list
Collect every recurring contractor, software, infrastructure, and subscription expense in one place.
Pro tip Use existing statements and ledgers so small charges are not missed.
Watch out Reviewing only the biggest bills leaves accumulated small waste untouched.
- 2
Add price and value
Record the current price and rate the value or return as low, medium, or high.
Pro tip Use a simple spreadsheet; specialized software is unnecessary.
Watch out Do not confuse a familiar tool with a valuable tool.
- 3
Act on low-value costs
Cancel each low-value item or negotiate it down when there is a reason to retain it.
Pro tip Start with cancellation to force a clear justification for keeping it.
Watch out A review without an action owner merely documents waste.
- 4
Challenge retained costs
Leave high-value costs broadly intact while still asking suppliers for a discount or improved terms.
Pro tip Support the ask with a clear price rationale or comparable offers.
Watch out Do not damage valuable long-term relationships by grinding suppliers.
- 5
Schedule the next review
Place the next review on the calendar six months later.
Pro tip Assign one person to own the complete pass.
In the wild
AppSumo lists every contractor and software subscription, records price and perceived return, and reviews the list twice a year. Low-value costs are canceled or renegotiated; even high-value costs may receive a discount request.
→ Recurring spending is explicitly tied to company value instead of continuing by default.
Common mistakes
Reviewing only obvious expenses
Small recurring charges can remain invisible when the review covers only headline costs.
Keeping low-value tools by habit
A low rating must trigger cancellation or a concrete renegotiation action.
Is it for you?
Best for
Businesses or households with enough recurring charges that forgotten or low-value costs can compound.
Not ideal for
One-time purchases that cannot be canceled or renegotiated.
From the transcript
“What we do at AppSumo.com is we do a biannual review over every single contractor and every single software subscription.”
“And then we basically have two columns, which is price of it and then we have the return on investment or how valuable we think…”
“Either you get it canceled or you got to negotiate it down.”
From the episode
#717: Noah Kagan — How to Launch a Million-Dollar Business This Weekend
Noah Kagan