Business Pricing Models

The recent interest in hybrid, usage-based and outcome-based pricing is on 🔥. Here's the thing: successfully going usage-based is way more than a pricing change. It's a hard pivot, and you might not be ready for it. What to look out for: 1. Pure usage-based or pay-as-you-go pricing really isn't for every product. The challenge is finding a metric that buyers accept (the feeling of predictability is key) & that makes more $$. Look for metrics that grow quickly within an account, aren't susceptible to huge swings, and that are *outputs* of getting value rather than *inputs*. Or consider a workaround like putting a usage limit on a subscription plan or adding a fair usage policy to protect against heavy users. 2. In a usage-based business, there's no room for shelfware. The hard work *starts* at contract close. Everyday the customer is making a purchase decision about whether to adopt your product. This means everyone plays a role in customer success. 3. Sales incentives need to evolve to embrace land-and-expand. It's better to close deals quickly, then let usage grow over time. Commission structures can't over-index on the initial commitment. 4. Overage isn't a bad thing to penalize. Your customer grew their business and wants to consume more of your product. That's fantastic, celebrate it! 5. There are ways to make usage models more palatable to the enterprise. This usually means getting into the weeds with contract structures like:  - Annual draw-down: Customers flexibly draw down their usage over 12 months like a gift card. If they use the product faster than expected, they have time to plan & budget before renewal.  - Roll-over: Give customers the option of rolling over unused usage credits *if the next commit is larger than the last*. This helps reduce hoarding.  - Grace periods: After the grace period, customers can either re-up their contract at a higher commit or pay for the one-time flex spend. 6. Usage-based revenue isn't necessarily ARR. But that doesn't necessarily mean it's de-valued by investors. Folks want to see that usage revenue *acts* like ARR -- that it's highly re-occurring, grows over time in the average account, isn't project-based, and has high gross margin. 7. Forecasting your business is about to get way more complicated. It becomes a data science exercise more than a pipeline exercise. Finance teams are building models looking at individual customers & cohorts, factoring in criteria like the use case, ramp time, commitment, etc. What could go wrong 🙃 --- Adopting usage-based models isn't easy. But there aren't many better alternatives for AI, automation, API and FinTech products.

𝗦𝗲𝗮𝘁 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝗵𝗶𝗱𝗲𝘀 𝘄𝗮𝘀𝘁𝗲. 𝗧𝗼𝗸𝗲𝗻 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝗵𝗶𝗱𝗲𝘀 𝗿𝗶𝘀𝗸. 𝗢𝘂𝘁𝗰𝗼𝗺𝗲 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝗵𝗶𝗱𝗲𝘀 𝗰𝗼𝗺𝗽𝗹𝗲𝘅𝗶𝘁𝘆. And that’s why most teams pick the wrong model, not because the math is hard, but because the trade-offs are invisible. ➮ 𝗦𝗲𝗮𝘁-𝗕𝗮𝘀𝗲𝗱 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 (𝗨𝘀𝗲𝗿 / 𝗟𝗶𝗰𝗲𝗻𝘀𝗲 𝗠𝗼𝗱𝗲𝗹) · You pay per user or per agent, no matter how much they use it. · Great for predictable teams and stable workflows, but it breaks when licenses sit unused or adoption depends on humans showing up. ➮ 𝗧𝗼𝗸𝗲𝗻 / 𝗖𝗼𝗻𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 (𝗣𝗮𝘆-𝗣𝗲𝗿-𝗨𝘀𝗲) · You pay only for what the system consumes - tokens, executions, inference calls. · Perfect for experimentation and scaling AI workloads, but risky when prompts get inefficient or usage becomes unpredictable. ➮ 𝗢𝘂𝘁𝗰𝗼𝗺𝗲-𝗕𝗮𝘀𝗲𝗱 𝗣𝗿𝗶𝗰𝗶𝗻𝗴 (𝗣𝗮𝘆-𝗳𝗼𝗿-𝗩𝗮𝗹𝘂𝗲) · You pay only when the AI delivers a measurable business outcome. · Ideal for ROI-driven teams, automation cases, and exec-level reporting - but hard when outcomes aren’t clearly defined. ➮ 𝗛𝗶𝗱𝗱𝗲𝗻 𝗧𝗿𝗮𝗽𝘀 𝘁𝗼 𝗪𝗮𝘁𝗰𝗵 𝗙𝗼𝗿 ‣ 𝗦𝗲𝗮𝘁 𝗧𝗿𝗮𝗽: Paying for licenses people never use. ‣ 𝗧𝗼𝗸𝗲𝗻 𝗧𝗿𝗮𝗽: Budget spikes from inefficient prompts or runaway execution. ‣ 𝗢𝘂𝘁𝗰𝗼𝗺𝗲 𝗧𝗿𝗮𝗽: Misalignment on what counts as a successful outcome. ➮ 𝗪𝗵𝗲𝗻 𝗘𝗮𝗰𝗵 𝗠𝗼𝗱𝗲𝗹 𝗪𝗶𝗻𝘀 ‣ 𝗦𝗲𝗮𝘁 𝘄𝗶𝗻𝘀 𝘄𝗵𝗲𝗻: Adoption is stable and usage doesn’t swing wildly. ‣ 𝗧𝗼𝗸𝗲𝗻 𝘄𝗶𝗻𝘀 𝘄𝗵𝗲𝗻: You’re early in the journey, workloads are variable, and cost must track usage. ‣ 𝗢𝘂𝘁𝗰𝗼𝗺𝗲 𝘄𝗶𝗻𝘀 𝘄𝗵𝗲𝗻: Automation is clear, value is measurable, and leadership needs ROI proof. Pricing isn’t a finance decision, it’s a workflow decision. Pick the model that matches how your teams actually work, not how you wish they worked. Follow Vaibhav Aggarwal For More Such AI Insights!!

Livestorm is killing per-seat pricing. Again. Most webinar platforms still price per host, per license, or per registrant. But these models are deeply flawed (we tested all of them). They just don't hold up to the reality: — Every new team member needs a license. — Every campaign hits another "registrant cap." — And somehow… you're still paying for people who never showed up. We've had customers tell us they're paying for 3000 "contacts" when only 1200 people actually attended their events. We've watched marketing leaders spend hours explaining to their CFO why they're being charged for their own team members. That's why we're now betting on attendee-based pricing. 🔥 You only pay when someone actually joins a session 🔥 1 attendee = 1 credit. No monthly quotas, consume as much as needed, when needed. No shows don’t cost you anything. No admin seats. No unused licenses. And one more thing, Team members are now FREE — internal trainings, webinars, dry runs, and tests don’t burn credits. This is why this is a market-first and how we differentiate from everyone else. SO proud of the team that pushed this from idea to launch — across product, revops, finance, and GTM 💙 Attendee-based pricing isn't just fairer. It's the only model that actually makes sense. Hope this helps 👋

AI Agents are killing traditional SaaS - and that's Good News The $3 trillion SaaS industry is about to experience its biggest disruption since cloud computing. The catalyst? AI agents - and they're completely breaking the traditional per-seat pricing model that's dominated enterprise software for decades. Here's why this matters: Per-seat pricing only works when your users are human. As AI agents increasingly become the primary users of enterprise software, the entire model collapses. You can't charge an agent for a seat. But this isn't just about pricing - it's about a fundamental shift in how businesses evaluate technology investments. CFOs aren't comparing software costs against other software anymore. They're measuring the combined costs of software licenses plus human labor against pure outcome-based solutions. Think about it: - Customer support: Per resolved ticket vs. per agent + seat - Marketing: Per campaign outcome vs. headcount - Sales: Per qualified lead vs. rep costs The smart players are already adapting. Intercom's AI agent Fin charges $0.99 per resolved conversation. Salesforce's Marc Benioff sees this "Digital Labor" expanding their market into the trillions. Even traditional vendors are scrambling to adjust. The winning strategy? Give the platform away free? Let AI agents handle workflows through existing systems. Once you control the data flows, you become the new system of record. While incumbents defend their subscription revenue, newcomers can capture the entire value chain. Yes, enterprises still prefer predictable costs over usage-based pricing. But when individual leaders see 10x efficiency gains, they'll find ways around traditional procurement processes. This isn't just another wave of enterprise software. It's a generational reset in how businesses operate. Zero upfront costs, pure outcome-based pricing - that's not just a pricing model. That's the future of business. The winners will be those who recognize this isn't about squeezing more margin from the old model. It's about completely reimagining how enterprise software creates and captures value in an AI-first world. The question isn't whether this transformation happens - it's whether you'll be leading it or playing catch-up. #SaaS #AI #FutureOfWork #Enterprise #Innovation #Technology #DigitalTransformation

The SaaS pricing model is broken. In 2015, seat-based pricing made sense. Today, it's a barrier. Charging per user discourages adoption and misaligns cost with value. As AI and automation reduce the need for human interaction, tying revenue to user count is outdated. Today’s software evolves, adapts, and scales dynamically. Your pricing should too. Usage-based pricing is a real switch: - 60% of SaaS companies now use or test usage-based pricing - Companies using it grow 10–40% faster - Net Dollar Retention hits an average of 137% - Public companies with usage-based models trade at a 50% revenue multiple premium Usage-based pricing aligns cost with actual value delivered. It encourages adoption, reduces churn, and scales with customer success. At FullEnrich, we've embraced this model. The results: increased user engagement and improved retention.

Seat-based pricing is slowly dying... but was THE pricing strategy of the past 10 years. It made sense: (1) Customers always grew their teams, so their software spend grew too. (2) Collaboration was the core value driver, and more seats meant more collaboration. (3) SaaS margins were high, so unlimited usage was viable. But that model is breaking down. Teams aren’t growing like they used to. Some are shrinking. AI features come with real costs—every query has a price tag. Subscription fatigue is real, and companies are scrutinizing every dollar. That’s why usage-based and hybrid pricing models are taking over. We’re seeing: -Credits (prepaid usage that depletes over time) -Subscription + overages (pay a base fee, plus per-unit costs) -Outcome-based pricing (pay per successful result, not per seat) Many companies are shifting to a more usage-based and less seat-based model (even if payment still happens as a subscription). The challenge? The most common billing systems weren’t built for this level of flexibility. Every company measures usage differently, which makes implementing new pricing hard. That’s why we’re building Lago—to make modern pricing models easier to implement, so you’re never stuck in a legacy billing system that slows you down. If you want to read our full breakdown, check out our latest Substack post here: https://lnkd.in/e3VZ6FdE

Seat-Based Pricing is Dead. Here’s Why: Seat-based pricing had its moment, but it’s a relic in the age of intelligent agents. Why should businesses pay for "seats" when the work isn’t tied to how many people log in but to the outcomes they deliver? The old model is rigid, outdated, and disconnected from what really drives value. A study by Gartner indicates that 70% of businesses prefer usage-based pricing over per-seat pricing for SaaS applications. This preference stems from the flexibility and cost-effectiveness that usage-based models offer, aligning expenses more closely with actual consumption and value derived. At SuperAGI, we’ve ditched the deadweight. Our pricing isn’t about how many users you have; it’s about what your agents do. It’s built on outcomes and agent actions—because that’s where the real ROI lives. Every action an agent takes, every task completed, every dollar of value created—that’s the foundation of our model. Outcome-driven pricing models have been shown to reduce operational wastage by 15–20% annually, ensuring that businesses pay for value, not headcount. Also automated systems managed through outcome-driven models just like ones at SuperAGI have been shown to achieve 40% faster task completion rates compared to seat-based systems dependent on user logins. But we get it: businesses still need predictability. So, we tier it out. Structured pricing gives you clarity and control without sacrificing flexibility. 👉 Pay for What Matters: Pricing tied to actual agent activity and outcomes. No fluff, no wasted dollars. 👉 Predictable Tiers: Simple, transparent plans that scale with your needs. Budget-friendly without sacrificing performance. 👉 Aligned Incentives: When our agents deliver results, you win—and so do we. That’s how pricing should work. Seat-based pricing is for the past. With a significant shift towards usage-based models, SuperAGI’s outcome-driven approach is how companies will scale into the future. It’s smarter, fairer, and built for where work is headed—not where it’s been. ( All research quoted is in comments )

Your SaaS pricing model might need a rethink 🤓 Webflow just made important changes to its pricing strategy, and other startups are starting to move in the same direction. The X$/MONTH/USER B2B SaaS model often works against SaaS businesses, especially niche ones. This pricing model makes sense for software people use daily. Many software nowadays rarely fit that definition. They still provide lots of value but in burst usage. If your SaaS falls into this category, a recurring, seat-based license could prevent businesses from adopting your product. Worse, it misaligns your incentives with theirs. You know who you are if you’re asking for a credit card number before letting users trial your product for 14 days. Few things scream, "I don’t think you’ll use my product enough," louder than requiring a credit card for an x-day trial. ❌ Contrast this with Slack, which only charges for active users. They removed barriers to team adoption and built customer trust by automatically not charging inactive seats. Subscription Pricing Should Feel Like a Bargain 💰 My bet is that many SaaS companies stand to gain more by offering an outcome-based pricing model—driven by features (value) rather than users. Why can’t Miro offer pay-per-board pricing? Why can’t VEED.IO sell week-long passes for casual users? Webflow now charges based on tiered user permissions (feature access). Customers are telling us they don't want this by pushing back against recurring subscriptions with single-use credit cards, immediate cancellations to prevent auto-renew, and even credit card disputes. Needing a product or a feature doesn’t mean wanting to pay for it year-round. I can love Miro, but I still have no use for it nine months out of twelve. Usage-based pricing models don’t just benefit our customers - they can also align more closely with a SaaS unit economics. By tying revenue directly to product usage, we can forecast costs with greater precision and build trust with customers. The cherry on the cake: we can remove features more easily. (Good startups don't just add features. They remove as well.) Innovation is rarely just about technology. ✨ I think innovative pricing might just be the key ingredient that defines tomorrow’s niche SaaS. Please, let's inspire each other - share the most innovative pricing models you've seen 👇

In "Old SaaS," the marginal cost of a new user is effectively zero. In AI, every single interaction costs you real money in compute. If you price based on access but pay based on usage (tokens), you have a misalignment that will destroy your unit economics. Here are the 4 pricing models winning the AI era right now: 🎟️ 1. Flat rate / Seat-based (ChatGPT Plus) - The Model: Monthly fee for "unlimited" access. - The Pro: Finance teams love the predictability (no variance). - The Con: "Power users" can eat your margins alive. ✅ Great when: You need mass consumer adoption (B2C) and can tolerate margin variance. 📅 2. Credit-based subscription (Clay / Figma) - The Model: Recurring fee ($X/mo) buys a set amount of "internal currency." - The Pro: It *looks* like a standard subscription (familiarity), but *acts* like a metered model. - The Benefit: You get the revenue guarantee of a subscription, avoiding the revenue roller-coaster of pure usage models. ✅ Great when: You are an established player adding AI features to an existing product. 📏 3. Credit-based consumption (OpenAI API) - The Model: Pay only for what you use (per token). - The Pro: Perfect alignment. You never lose money on a heavy user. - The Use Case: Infrastructure plays thrive here (selling the "electricity"). ✅ Great when: Your customers are technical and building their products on your platform. 🎯 4. Outcome-based (Intercom Fin) - The Model: Price is anchored to *value*, not effort or usage. - The Pro: Customer only pays if the AI actually does the job (e.g., $0.99 per resolved support ticket). - Great when: You have a Vertical AI that solves a specific domain problem.   - Support Agent replacement? Yes. Value is precise ($5–$10).   - General Writing Assistant? No. Value is subjective (Legal doc vs. Poem). 🏁 The Bottom Line If your costs are variable (tokens/compute), your revenue usually needs to be variable too. 👉 Thinking about your own AI pricing? DM me, I love chatting about pricing.