The Revenue Formula From seats to outcomes: How AI is changing pricing (with Kyle Poyar)
9 snips
Dec 19, 2024 Kyle Poyar, a pricing expert and creator of growthunhinged.com, sheds light on the rapidly changing landscape of pricing models due to AI. He discusses the shift from traditional seat-based subscriptions to outcome-based pricing strategies that align with customer value. Poyar also shares insights on the challenges facing incumbents and the pivotal role of leadership in navigating these changes. Alongside predictions for 2025, he emphasizes the importance of adaptability in pricing to stay competitive in an AI-driven market.
AI Snips
Chapters
Transcript
Episode notes
SaaS Pricing Evolution
- SaaS pricing evolved from on-premise transitions to a more scientific, seat-based model.
- Around 2015-2020, pricing became less innovative, with most SaaS companies using per-seat subscriptions and good-better-best packaging.
AI's Impact on Pricing
- The rise of AI agents, which perform tasks instead of just augmenting humans, requires new pricing models.
- Per-user pricing becomes illogical when AI does the work, so outcome-based or unit-of-work pricing is necessary.
AI Pricing Examples
- Intercom charges per support ticket resolved by their AI agent, directly linking price to AI's work.
- ChargeFlow uses outcome-based pricing, charging a success fee on revenue recovered through chargeback management.