TVAP 4 introduces an intelligent reduction in renewal uplift, based on:
- Prior deal quality for Software products – Based on factors like Zone, floor & recommended values for the prior net unit price (considering pricing multipliers) , Deals are categorized as Good, average & Bad. Each deal is classified into one of three categories.
🟢 Good Deal → Lowest Uplift
🟡 Average Deal → Moderate Uplift
🔴 Bad Deal → Highest Uplift
- The uplifts in TVAP4 are always lower than TVAP 3
- Prior term consideration while determining the uplift.
- Appreciation uplift is linear and not compounded as before(V3) and capped at 4 yrs. appreciation.
This dynamic approach ensures that uplift percentages are aligned with the value of the original deal and the customer’s contract history.
🎯 Business Impact: This change is designed to:
- ✅ Reduce customer churn by offering more predictable and reasonable renewal pricing with lower term uplifts & appreciation uplifts.
- ✅ Ease pressure on expansion conversations by eliminating friction from aggressive uplift practices
- ✅ Promote long-term retention by rewarding high-quality initial deals with fair renewal treatment