📂 The next evolution of SaaS pricing: results-based charges

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Software pricing has gone through a few evolutions.

1.0: One-time license fee to download software and run locally

2.0: Recurring fee to use software in cloud and instantly get updates

3.0: Usage-based charges to integrate into your workflows

Don't get me wrong, usage-based pricing has been around for a long time.

But historically, that usage was based on inputs.

Now, we're beginning to see usage based on outputs.

What do I mean by this?

Instead of paying for the action, you pay for the outcome.

Let's call it results-based charges for the sake of not getting confused.

Here's an example from Intercom:

Steven Tey

@steventey

Really love @intercom's pricing model for their AI chatbot – Fin.

It's usage-based, but results-driven. You don't pay unless Fin does its job – resolving the customer's issue.

Amazing work @eoghan & team 👏

7:0 AM • Dec 29, 2023

46

Retweets

634

Likes

Read 30 replies

Instead of paying for the number of tickets, you'd pay for the number of resolved tickets. See the difference?

This aligns with the job that customers hire Intercom to do: to provide successful customer support.

Here's another example from Zapier:

GREG ISENBERG

@gregisenberg

SaaS as we know it is dying and no-one is talking about it 

1 hour ago,  Zapier ($5B company) started charging  "pay-per-task" instead of only monthly subscriptions

When you can align customer incentives with your business model, it's a beautiful thing

Bullish.

11:17 AM • Jan 9, 2024

86

Retweets

996

Likes

Read 80 replies

Instead of paying for a certain number of automations (AKA "zaps"), you'd pay for the number of tasks that those automations perform.

This will continue to crop up more and more in SaaS as features get commoditized and products have to compete more on price than on capabilities.

I'll leave you with this question...

What would results-based pricing look like for your SaaS?

—Corey

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📂 The next evolution of SaaS pricing: results-based charges

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