Measuring Value Versus Cost-Avoidance

In this episode of Mostly Growth, Kyle and CJ are joined by Russell Lester, President and CFO of Tropic, for a deep dive into what real procurement data reveals about SaaS pricing. They break down multiyear discounts, why volume matters more than contract length, how AI is reshaping pricing models, and when longer commitments actually hurt buyers. Plus, lessons on negotiation leverage, price increases, and navigating today’s increasingly complex SaaS market.

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SPONSORS:

HockeyStack is an AI platform for modern go-to-market teams that unifies sales, marketing, and customer data into a single system of action. With AI agents that prospect accounts, support reps, improve forecasting, and automate what’s already working, HockeyStack helps teams move faster without guessing. Trusted by companies like RingCentral, Outreach, ActiveCampaign, and Fortune 100 teams—learn more at https://www.hockeystack.com

RightRev is an automated revenue recognition platform built for modern pricing models like usage-based pricing, bundles, and mid-cycle upgrades. RightRev lets companies scale monetization without slowing down close or compliance. For RevRec that keeps growth moving, visit https://www.rightrev.com

Tropic is an intelligent spend management solution that consolidates your spend data and processes into one unified offering, enabling insights and decisive action. From spotting hidden optimization opportunities to automating painful procurement workflows and giving you the best market data to turn vendor negotiations in your favor, Tropic combines smart insights with real human expertise to keep you ahead of the curve. Visit https://www.tropicapp.io/mostlymetrics to learn how.

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LINKS: 

Tropic: https://www.tropicapp.io/

Russell on LinkedIn: https://www.linkedin.com/in/russell-lester-aa98463/

Mostly Metrics: https://www.mostlymetrics.com

CJ on LinkedIn: https://www.linkedin.com/in/cj-gustafson-13140948/

Growth Unhinged: https://www.growthunhinged.com/

Kyle on LinkedIn: https://www.linkedin.com/in/kyle-poyar/

Slacker Stuff: https://www.slackerstuff.com/

Ben on LinkedIn: https://www.linkedin.com/in/slackerstuff/

https://www.mostlymetrics.com/p/your-guide-to-negotiating-multi-year-deals

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RELATED EPISODES:

Where Did All the Middle Managers Go?

https://youtu.be/LvN7RzmApPU

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TIMESTAMPS:

00:00:00 Preview and Intro

00:01:12 Sponsors — HockeyStack | RightRev | Tropic

00:05:11 Welcome Russell Lester, Pricing and Discounting

00:06:41 Meeting Punctuality, Culture, and Waiting Rules

00:08:19 Transition to Multi-Year Discounts and Pricing Strategy

00:09:12 Procurement Data Insights: Volume Beats Term

00:10:00 AI Products, Risk, and Multi-Year Contract Tradeoffs

00:11:05 Multi-Year Discounting vs Negotiation Leverage

00:13:18 Lock-In Value and Avoiding Annual Price Uplifts

00:14:43 The “AI Tax” and Emerging AI Pricing Models

00:17:19 Why SaaS Pricing Data Is Messy and Context-Dependent

00:18:42 How Companies Actually Save Money on SaaS

00:20:40 Tropic as a Case Study in Pricing Model Evolution

00:22:28 Measuring ROI, Value Pricing, and Bundled AI Services

00:23:16 Cost Avoidance Pricing and Proving Real Savings

00:26:34 Buyer-First Marketplaces and Negotiating Objectivity

00:27:31 AI Pricing Complexity and Too Many Choices

00:29:47 Everyday Low Pricing vs Discount Theater

00:31:20 Pricing in the Real World: Credits and Audible

00:33:12 Expansion Revenue Through Gamified Consumption

00:34:15 Gartner’s “OaaS” Term and AI Category Confusion

00:35:07 CES Worst-in-Show and Gimmicky AI Products

00:36:23 LinkedIn Experts, AI Noise, and the Illusion of Insight

00:37:50 AI, Real Expertise, and Extracting Signal from People

00:38:48 Credits

#MostlyGrowthPodcast #PricingStrategy #SaaSEconomics #AIPricing #GoToMarket