Good pricing is easy to understand. Seats. Users. Visits. They all make sense.
More seats = more revenue, cost out, less risk.
Nowadays, with this small, trending, niche concept called AI (have you heard of it?), we’re seeing a different trend.
No longer paying for logins, instead paying for results.
Action words dominate. Resolve the ticket, stop the breach, approve the order without a chargeback, close the sale. All measured outcomes.
How good would it be to say to all your vendors:
Mr software vendor, if you move the number you promised you would, you get the money. If you don’t, you don’t.
Perhaps soon you will.
I think that is where enterprise software is heading because AI makes impact visible in a way finance trusts. The winners will price like they can be fired and customers keep them anyway, since the outcomes are too good to lose. The losers will keep counting seats and hoping procurement forgot how to negotiate.
Spoiler, they’re getting better than ever.
Really interesting, the latest Ramp data, in AI Adoption below. Outcome based pricing is the go to pricing strategy being employed at the bleeding edge AI companies.
Alex Karp, CEO of Palantir actually said it perfectly “I get paid because you can get rid of us. I get paid because you can get rid of us, but we deliver so much value that you can’t.”
I’ve tried to create a good method for pricing within this framework. Let me know what you think:
Price = floor (cost to serve) + expected loss x risk load + service fee
The floor
Outcome pricing replaces a wine and dine, enterprise sales‑based sales campaign with a simple scoreboard.
Money changes hands only when a unit of value appears, and that unit is something a CFO can audit.
In support it’s is a conversation that ends with a ticket resolution.
In fraud prevention it’s an approved order with no chargeback.
In security it’s is an incident contained within an agreed time window, with a warranty.
Sales and marketing can anchor to accepted meetings or qualified pipelines as long as the fields live in the CRM. It’s a little more murky (but more on that later).
You get the gist.
Whilst the digital advertising ecosystem has lived in this world for a long time. Advertisers pay for clicks, leads and conversions. Merchants pay a take rate per transaction. SaaS never fully crossed this bridge.
Seats and feature bundles survived because attribution was fuzzy, switching was painful, and vendors could hide behind this magic word, “adoption.”
These wondrous marvels known as LLMs and agents absolutely wreck all three excuses.
They generate granular, time‑stamped records of who did what, a multi‑model world makes swap‑outs plausible and falling unit costs create room to price against value without eroding margin (much).
It’s all about inference costs, baby.
They are going down, down, down!
Or are they? See my article on token economics 101.
But for now, let’s assume they are.
It’s already happening in different markets
Customer Service
Customer service went first because the unit of measurement is clear and the pain is big.
Intercom’s AI agent ‘Fin’ charges per resolution, not per bot.
Zendesk ties billing to automated resolutions rather than a vague concept of “AI users.”
Salesforce’s Agentforce (somewhat innovative from a giant) lists prices per conversation and per action.
Security
In security, a warranty is the most honest form of pricing.
CrowdStrike pairs managed defence with breach warranties that cover real costs when incidents escape containment.
Rubrik wraps data recovery in ransomware warranties at the top tier that reach into eight figures.
Agent platforms
Agent platforms and contact centres are normalising event‑based pricing.
Twilio Flex charges per active user hour, which is a tight proxy for actual work.
Freshworks sells packs of AI agent sessions once the free quota is consumed.
Why now
Palantir sits to the side of this discussion as a signal.
Its chief executive has been loud about “getting paid because you can be fired,” and the company has posted serious growth while running that story. We do not need to make Palantir the hero. The point is that investors reward vendors who sell certainty and show the tape.
Three forces have converged.
Measurement became cheap.
Every agent action, prompt and function call can be logged with context.
Switching got easier. Multi‑model platforms, shared connectors, and agent frameworks reduce the pain of change.
Realistically, it’s also the fact that unit costs fell across the board and inference is cheaper per unit of work. Competition among model providers keeps pushing rates down.
As a software vendor, it’s getting cheaper and cheaper to serve your customers, and it becomes possible to price in unsuccessful outcomes.
An example outcome contract
There is no single template for an outcome contract because categories and buyers differ.
The most common shape is a hybrid pricing strategy. A modest platform fee that covers fixed support and governance, plus a variable component linked to outcomes.
Where uplift is a promise, you see Dollar-Based Net Expansion Rate (DBNER) tied to incremental revenue over an agreed baseline, refreshed on a cadence to avoid a permanent pilot.
There is a deeper point here.
Outcome contracts are an operational bet. The vendor has ownership and accountability over outcome. Not sexy slide ware. Actual outcome. That requires clean observability, clear definitions, and the humility to admit when the outcome wasn’t in fact achieved.
This will change the very nature of enterprise software.
I personally, still want sexy slide ware.
Where outcome pricing fits and struggles
This pricing model works best where the outcome result is binary.
Support has resolved or not resolved.
Fraud has been approved without chargeback.
Payments either post or fail.
Security incidents are contained inside a window, or they are not.
These categories move because the audit is simple and both sides recognise the unit as value.
Emerging areas are an interesting outlier, requiring a little more nuance. It’s those dreaded words.
Attribution. Data Quality.
Shudder.
Sales assist can charge against accepted meetings, pipeline created, or rep cycle time, but only when CRM hygiene is solid.
Marketing can tie spend to down‑funnel outcomes, yet multi‑touch attribution will always invite debate.
Most buyers will keep those as subscriptions and then create sub-outcome meters for tasks inside, for example, meetings auto‑scheduled and attended or messages drafted and accepted.
Honestly, I think that compromise is fine for now. Not every domain must cross the pricing bridge on the same day.
The change will come. Just slower.
The uncomfortable middle
The easy to measure win
Seems obvious, but the categories with binary outcomes win first, as they should. Platforms that enable model choice and baked‑in evaluation features help buyers swap engines without drama, which deepens trust and nudges contracts toward results.
Per seat vendors lose
On the other side, the seat‑heavy products that cannot prove outcomes, will lose. If the core evidence of value is “users logged in,” procurement will do what procurement does best. Discount baby! Consolidate! Not return your calls!
Utilisation is an interesting one
Counting tokens or API calls can be a fair bridge in early categories, yet once value is knowable, activity‑only pricing looks like a fig leaf. My dad always said, always go into the business’ where the consumer doesn’t know what the product should cost. Case and point, never open a cafe.
What this means for incumbents
Incumbents hold assets challengers envy. Namely distribution, data and brand trust. Outcome pricing plays to all three.
Distribution lands pilots everywhere, and pilots convert when the meter is easy to read and the KPI unit matches how the customer already runs the business.
Data gives a head start on variance, which makes warranties cheaper to offer and more painful for rivals to match. I.e they can price in failure.
Trust lowers friction in legal and procurement.
This is a win that will lead to better software being developed.
When a vendor accepts outcome risk, product roadmaps tilt toward value and reliability. Sales motions tilt toward mapping workflows rather than selling features.
Just check out all the ‘forward deployed engineer’ roles currently being hired for.
Per‑action and per‑conversation models look simple because they are. The more the product guarantees completion rather than activity, the more defensible the price and the better the software actually is in reality.
Please do remember that outcome pricing is not a magic pill.
It will not rescue a weak product or a broken process.
It will not fix culture.
It will force clarity about what a piece of software actually does, and who benefits, and how fast. That clarity is messy at first, which is why incumbents will drag their feet and challengers will overpromise.
The market will punish both.
The seat tax had a good run. It made sense when proving impact was expensive and swapping tools was costly. That world is fading. The enterprise is getting a contract that reads like common sense, because the infrastructure finally caught up with the rhetoric.
Pay when it works. Stop when it does not.
Give so much value, they can’t get rid of you.
What software was supposed to be.
Simples.
Until next time.
Blake