Introduction

SaaS companies can’t rely on old pricing anymore. AI is changing how software gets sold, used, and paid for.

What's the problem it solves?

This article explains why traditional pricing models like flat fees or per seat don’t work well anymore-especially as AI becomes a key part of software. It shows how companies are struggling to keep up with new ways of charging for their products.

Quick Summary

Most software companies used to charge customers a flat monthly fee or charge per user. But that’s breaking down because AI changes the way software works and adds value. With AI, one person using the product might get as much done as a whole team. So charging per seat doesn’t make sense anymore. On top of that, AI tools cost money to run, which forces companies to rethink how they price things.

The most popular new model is called hybrid pricing. This means charging a mix of a subscription fee and usage-based costs (like buying extra credits). Companies like Clay and OpenAI use this approach because it keeps things simple but allows people to grow their usage over time. However, setting up hybrid pricing isn’t easy. There are many ways to do it, and each has pros and cons. Companies need to be smart about what they choose, or even support multiple pricing styles.

Another big idea is outcome-based pricing-charging based on the results a customer gets. But very few companies are ready for this because it's hard to track results, prove impact, and make predictions. Many also hoped pricing would become more open and clear, but that hasn’t happened yet. Most companies, especially the bigger ones, still hide their pricing due to complexity or fear of scaring people off. In the end, pricing is changing fast, and most companies aren’t ready. They don’t have the right teams, tools, or plans in place.

Key Takeaways from the article

• Old pricing methods like flat rates and per seat are losing ground fast.
• AI is pushing companies toward hybrid pricing that mixes subscriptions with usage-based costs.
• There are many ways to set up hybrid pricing, and each one fits different needs.
• Outcome-based pricing is the goal for many, but it’s too hard for most companies right now.
• Public pricing still isn’t the norm for complex or high-priced products.
• Most software companies are not ready for all this change-they’re missing the people and systems to keep up.
• The pricing world is moving from buying software to paying for results.

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