The Playbook for Over-Embedded Vendors: How to Course-Correct Before the Revolt

If customers describe your relationship as a “necessary evil,” you’re too hot. The replacement project you think is impossible is already being discussed. Here’s how to course-correct.

Step 1: Audit Your V/E Ratio Honestly

Look at the past three years. Plot value created versus value captured.

If the ratio is declining, you’re on the extraction path—whether you intended it or not.

Step 2: Introduce Genuine Pricing Flexibility

Create tiers that let customers right-size without feeling trapped.

Counterintuitively: Giving customers freedom to pay less often results in them paying more—because resentment disappears.

Step 3: Make Exports Easier, Not Harder

The paradox of embedding: lowering barriers to get data OUT increases willingness to let you be data’s home.

Reduce lock-in fear and trust compounds.

Step 4: Shift Roadmap from Moats to Value

Audit your last four quarters of releases:

• How many features deepened moats?
• How many created new capabilities?

Rebalance toward creation.

Step 5: Retrain Customer Success on Partnership

If your CS team’s incentive is retention rate, they’re optimizing for “can’t leave.”

Shift incentives to customer outcomes, and “won’t leave” follows.

The Warning Signs You’re Too Hot

• Customers complain about “lock-in” publicly
• Retention is strong but NPS is weak
• Price increases don’t correspond to value increases
• Procurement has created a “vendor risk” category that includes you
• Competitors win deals by emphasizing “freedom”

The insight: By the time you see customer revolt, you’re already 18 months too late. Course-correct now.

This is part of a comprehensive analysis. Read the full analysis on The Business Engineer.