Ep. 161 - Is User-Based Pricing Dead? How AI Is Reshaping SaaS Monetization - Usage-Based Pricing - SaaS Backwards

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Usage-Based Pricing B2B SaaS growth SaaS pricing strategy AI product monetization pricing model transformation

Episode notes

Send us Fan Mail Guest: James D. Wilton, Founder & Managing Partner of Monevate - The advent of AI is forcing a complete rethink of traditional SaaS pricing - particularly the long-standing dominance of user-based pricing. In this episode, pricing strategist James Wilton explains why AI-native products are undermining the foundations of per-seat pricing models. Unlike traditional SaaS, where users are the proxy for value, AI tools often perform tasks autonomously, disconnecting cost from usage in unpredictable ways. As a result, the most value-aligned and sustainable pricing approach for AI-powered platforms is shifting toward usage-based models. Wilton argues: "If you’re still defaulting to user-based pricing, you’d better be ready to defend it." Other Takeaways: Misaligned Incentives in AI Pricing With AI, the metric that drives cost (compute) is often not the same as the metric that reflects customer value - creating tension between profitability and value-based pricing. The Rise of Usage-Based Pricing As automation and AI reduce the need for additional users, user-based pricing loses its relevance.

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