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Smartsheet’s Loyalty Benefit: Leverage or Lock-In?
Smartsheet’s transition from its legacy Advanced Work Management (AWM) licensing model to the User Subscription Model (USM) has created both confusion and cost pressure for enterprise customers. In recent months, the company’s Loyalty Benefit has become a key mechanism to offset the financial impact of this shift — but with strings attached.
What the Loyalty Benefit Really Is
The Smartsheet Loyalty Benefit is being included in new proposals as a temporary discount designed to cushion the move from AWM to USM. It’s positioned as a reward for “loyal” customers, but in practice, it also serves to drive customer behaviors that benefit Smartsheet’s revenue predictability and renewal cadence.
Customers can maintain this discount only if they meet certain ongoing requirements, including:
- Regular user audits: Periodically reviewing and removing inactive, duplicate, or low-usage accounts before renewal.
- Accurate role alignment: Ensuring license assignments reflect actual usage and roles.
- Controlled growth: Avoiding paid seat expansion beyond agreed thresholds; significant overages can void the benefit.
- On-time renewal: Adhering to renewal or negotiation deadlines.
- Acceptance of USM terms: Participating in true-up and reconciliation processes as part of the model transition.
Failure to meet these conditions can lead to Smartsheet rescinding the Loyalty Benefit, effectively penalizing customers for administrative lapses or delayed negotiations.
How It Shifts Leverage
For procurement and IT sourcing leaders, the Loyalty Benefit introduces a new dynamic. It rewards compliance and discipline while reducing flexibility and negotiation leverage at renewal. The incentive structure also makes Smartsheet “stickier,” discouraging churn and placing more burden on customers to manage seat counts in real time.
Meanwhile, Smartsheet’s sales teams are leveraging the Benefit as a defensive talking point — especially in response to executive-level admissions that pricing rollout issues have created friction in the market. Customers questioning recent price increases or licensing changes will likely hear about the Loyalty Benefit as a reason to stay the course.
Where Procurement Can Push Back
Enterprises should view the Loyalty Benefit not as a gift, but as a negotiation variable. By understanding how the discount is calculated (and what thresholds or usage metrics influence its size) buyers can push for a higher Benefit to offset upcoming cost escalations under USM.
Key actions to build leverage include:
- Request transparency into how Loyalty Benefit values are determined and applied.
- Benchmark discount levels against other customers of similar scale and profile.
- Quantify transition costs and frame the Benefit as partial compensation for migration-related disruption.
- Negotiate flexibility around usage thresholds and renewal timelines to preserve eligibility.
A Loyalty Program That Works for Smartsheet — Not Necessarily for You
The Smartsheet Loyalty Benefit may look like goodwill, but it’s also a sophisticated pricing lever that reinforces vendor control. Procurement teams that treat it as a negotiable component of total cost — not a fixed perk! — will be better positioned to manage spend, preserve flexibility, and maintain leverage in the transition to Smartsheet’s new licensing model.
Have a negotiation planned with Smartsheet? NPI can help. Contact us.
