Kyle Poyar, author of Growth Unhinged and a leading expert in pricing, packaging, and product-led growth, joins CJ for this episode. Together they explore the evolving landscape of SaaS metrics in the age of AI with a focus on the paradigm shift from access-based pricing to outcome-based models. They also examine success-based pricing and how to attach metrics to these models. The discussion delves into AI’s impact on ARR (annual recurring revenue), questioning its relevance in this new era and the implications of these changes for CFOs, who must now navigate more complex revenue structures and margins. As AI reshapes the industry, Kyle and CJ discuss the potential rise of professional services revenue, which SaaS metrics may fall by the wayside and what new metrics will emerge. This episode provides deep insights into the future of SaaS pricing in the age of AI and the metrics that will define success.
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SPONSORS:
Mercury is the fintech ambitious companies use for banking and all their financial workflows. With a powerful bank account at the center of their operations, companies can make better financial decisions and ensure that every dollar spent aligns with company priorities. That's why over 100K startups choose Mercury to confidently run all their financial operations with the precision, control, and focus they need to operate at their best. Learn more at mercury.com.
Mercury is a financial technology company, not a bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust®; Members FDIC.
NetSuite provides financial software for all your business needs. More than 40,000 companies have already upgraded to NetSuite, gaining visibility and control over their financials, inventory, HR, eCommerce, and more. If you're looking for an ERP platform ✅, head to NetSuite https://netsuite.com/metrics and get the CFO’s Guide to AI and Machine Learning.
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FOLLOW US ON X:
@cjgustafson222 (CJ)
@poyark (Kyle Poyar)
LINKS:
Growth Unhinged: www.growthunhinged.com
Kyle on LinkedIn: www.linkedin.com/in/kyle-poyar
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TIMESTAMPS:
(00:00) Preview and Intro
(01:50) Sponsor – Mercury | NetSuite
(06:05) AI Pricing Versus Conventional SaaS Pricing
(09:32) Defining an Agent or “Agentic” AI
(12:41) Charging per Work Completed Versus Access-Based
(14:51) Usage-Based Versus Success-Based Pricing
(16:04) The Challenges of Success-Based Pricing
(17:34) Sponsor – Maxio | Leapfin
(19:50) Attaching Metrics to Success
(26:22) Moving from Recurring Revenue to Reoccurring Revenue
(29:03) Establishing Baselines and Fixed Budgets
(31:04) The Ability to Prove Strong ROI
(34:52) The Limitations of ARR in This AI Model
(38:10) Rethinking ARR and How We Use It
(39:28) The Future of Professional Services Revenue
(43:43) New Positions for People in the Go-to-Market Strategy
(47:51) The Effect of AI and the Development of In-House AI Platforms on Renewal Rates
(50:39) Which SaaS Metrics Will Fall Away in the AI Pricing World
(51:49) New Metrics to Pay Attention To
(54:07) Wrap
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