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Shift in Pricing: Embracing Outcome-Based Models for Generative AI Products

Discussion on outcome-based pricing strategies at a generative AI technology conference.

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News Summary

As generative AI technology advances, the necessity to adopt outcome-based pricing models becomes apparent. Traditional pricing methods, like per-seat models, fail to showcase the true value these products deliver. By shifting focus to customer outcomes and consumption-based billing, tech marketers can better demonstrate ROI, ultimately leading to stronger client relationships and enhanced sales. Understanding the evolving landscape is essential for success in the generative AI market.

Shift in Pricing: Embracing Outcome-Based Models for Generative AI Products

Hey there! There’s been a lot of chatter lately about how we’re doing business with generative artificial intelligence—or gen AI for short. With the pace at which this technology is advancing, many experts agree that it’s high time we rethink our traditional pricing methods. Let’s dive into why outcome-based pricing might just be the next big thing for marketing gen AI products!

The Rise of Generative AI

Generative AI is truly a game-changer. It can produce results that we couldn’t even dream of before. However, the way we price these products hasn’t really kept up. Sure, there’s been a shift towards basing software-as-a-service pricing on a mix of capability and customer value. Still, the old per-seat pricing model is hanging in there like a stubborn guest at a party who just won’t leave.

Why Traditional Models Fall Short

So, what’s the issue? Well, those per-seat models just don’t cut it when it comes to showing the true return on investment (ROI) for gen AI products. You see, the unpredictability of the resources needed to achieve specific outcomes makes it tough for companies to showcase the full value of what they’re offering.

Shifting Toward Outcome-Based Models

As generative AI evolves, some savvy vendors are starting to move towards more dynamic consumption-based models. Instead of charging per seat, they’re beginning to charge based on credits used or even the tasks completed. Imagine paying based on the actual results you get—whether that means recovering chargebacks or achieving successful resolutions through automation!

The True Value of Generative AI

The reality is, gen AI‘s true worth lies in the outcomes it generates, much like the revolutionary potential of quantum computing. It’s not just about offering cool tools and methods; it’s about the concrete business value that these tools provide.

Rethinking Marketing Strategies

This shift towards outcome-based pricing means tech marketers have to evolve, too. They’ll need to really hone in on customer processes and the outcomes that clients are looking to achieve. Instead of talking about features, the conversation should center on what gen AI can deliver.

The Role of Value Assessment

To effectively convince potential buyers, marketers will need to sharpen their value assessment skills. This could involve adopting new value management tools that help quantify this potential. We might even see the emergence of “value agents”—tools that provide real-time reporting on how much value clients are actually achieving.

Concrete Calculations Over Speculations

In this new landscape, the calculations for value will likely become more concrete rather than speculative. Vendors will need to be clear about how they’re capturing value, which will aid in building stronger client relationships and ultimately drive more sales.

The Bigger Picture

As generative AI continues to automate tasks once performed by humans, the discussions will naturally shift from specific features of the technology to the overall benefits it brings to customers. Understanding these benefits deeply will be essential in promoting adoption and usage.

Looking Ahead

The growing influence of these new pricing strategies will be a hot topic at upcoming tech conferences, such as the Gartner Tech Growth & Innovation Conference. These events aim to explore how technology service providers can leverage emerging technologies for future growth and innovation.

Conclusion

In summary, if we want to succeed in marketing and selling generative AI products, it’s time to shift our focus. Outcome-based pricing is not just a passing trend; it’s a necessary evolution in the tech landscape. By better assessing value and genuinely understanding customer needs, we can all thrive in this exciting new era.