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Renewals and negotiation

Using Usage Data as Leverage in Vendor Negotiations

How to build a usage evidence pack before a software renewal: utilization, inactive users, feature use and growth, and how to use it in negotiation.

By the MI Solutions SAM team9 min read2 exhibits

In most software negotiations, the vendor knows more about your usage than you do. Their admin consoles, telemetry and account teams track adoption closely. Walking into a renewal without your own data means negotiating on their terms.

A usage evidence pack levels the field. It shows exactly what you use, what you do not, and what you need, so the conversation starts from facts.

In a renewal, the side with the better data sets the volume. The price discussion comes after.

What goes into the evidence pack

01Utilization per product

Active users ÷ licenses, over 90 days.

02Inactive users

Count and cost of licenses unused for 90+ days.

03Feature use

Which premium features are actually used, and by whom.

04Growth plans

Expected headcount changes and new projects.

05Price history

What you paid in each previous term, per unit.

06Alternatives

What a credible alternative would cost.

Exhibit 1
Utilization by product sets the volume you negotiateActive users as a share of licenses, example renewal across five products0%25%50%75%100%Sales Cloud65%Service Cloud81%Marketing add-on28%Analytics add-on44%Platform licenses92%Illustrative. Products below 50% utilization are candidates for reduction or removal.

Price history is the most overlooked part of the pack. Plotting what you paid per active user over several terms often shows that the effective price has risen much faster than the list price, because usage fell while volume stayed the same.

Exhibit 2
The effective price can rise much faster than the list priceAnnual cost per license vs per active user over four terms, $, illustrative CRM agreement$1,000$1,250$1,500$1,750$2,000Term 1Term 2Term 3Term 4Per active user $1,930Per license $1,310Illustrative. List price per license rose 14% over four terms; cost per active user rose 47%, becauseutilization fell from 88% to 68%.

How to use it

01Set the volume first

"We will renew 2,100 seats, not 3,000, because 900 have been inactive for 90 days."

02Justify edition changes

"Only 18% of users use the premium features, so we will move the rest to standard."

03Challenge unused add-ons

"The analytics add-on is used by 44% of licensed users; we will reduce it."

04Anchor price on value

"Our cost per active user has risen 47% over four terms."

What not to share

You do not need to share everything. Keep internal budget figures, internal deadlines and your alternative evaluation details to yourself unless they help your position.

What to put on the table

Do
  • Utilization and inactive-user counts, with the definition used.
  • Feature-use data that supports an edition change.
  • Price history, especially cost per active user.
  • The fact that you are evaluating alternatives, if you genuinely are.
Avoid
  • Your budget for next year.
  • Your internal deadline for a decision.
  • Detailed pricing from competitors, unless it helps.
  • Growth plans that would raise the vendor's expectations.

How MI One helps

Frequently asked questions

What if the vendor's usage data differs from ours?

Ask which definition they use. Agree a definition of "active" before you discuss numbers.

How far back should usage data go?

At least 90 days, and 12 months for seasonal products.

When should the evidence pack be ready?

About 90 days before the notice deadline, so it can shape the direction of the renewal rather than react to the quote.

See where your software budget goes

Bring your five largest vendors to a 30-minute call. Our SAM experts will show you where the savings usually hide, and how fast MI One can surface them.