Renewal Pricing Tied to Real Usage?

Insights for IT Negotiations

SaaS vendors often push programmatic renewal price increases—whether you used the product’s features (new or existing) or not. Here’s a fairer, customer-focused approach: only permit price hikes at renewal when (1) the SaaS vendor enhanced the production being subscribed to since your last renewal and (2) you’re actually using those enhancements. That aligns spend to delivered value and incentivizes vendors add enhancements of value and put in effort to help drive adoption.

Key points

• Renewal price increase caps (3–5%, even 0%) are helpful but programmatic and often are littered with conditions
• A better standard: tie any increase to verifiable feature use.
• SaaS vendors should proactively enable usage (training, outreach, no cost resources…etc.)
• Most customers underutilize features—don’t pay for what you don’t use, certainly don’t pay more for air

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