Pricing a decision

What does per-seat pricing actually measure? How many people log in. When the product makes calls on the customer's behalf, that number tells you very little. One person can oversee a thousand decisions a day, and both the value and the risk sit in those decisions.

The obvious alternative is to charge per action, but that has its own problem. It rewards the vendor for volume and makes the customer nervous about every call, which is exactly the wrong incentive for a product whose whole promise is that you can leave it to run.

The pricing that is working charges for the decision itself. Where the outcome can be measured, it charges by outcome. Where it can't, it charges for a fixed amount of capacity, and either way there's a ceiling the customer can see. The price also tells the buyer what the product is for. If the invoice says "seats", it's a tool. If it says "decisions", it's an agent, and the customer will hold it to that standard (which is just what you want).

Working on this in your own product? See the four ways to start, or write to [email protected].