As AI revolutionizes how software works, it’s also reshaping how software is sold. Pricing strategy isn’t just a monetization lever anymore—it's a core part of the product experience and a key competitive advantage.
Sam Lee, VP of Pricing Strategy at HubSpot, spoke with Metronome CEO Scott Woody to explore SaaS’s sea change toward usage-based pricing (UBP). Drawing from their experience at places like Snowflake, ServiceNow, and Dropbox, they shared how AI is upending pricing norms—and what SaaS leaders should do next.
Here are the conversation’s major insights, why they matter, and what you can do about them.
AI breaks the seat-based pricing model
AI-enabled software has moved well past helping humans do things—it does things for them. This shift fundamentally changes how value is created. In traditional seat-based models, pricing is tied to the number of users. But when AI agents can autonomously generate reports, process support tickets, or analyze datasets, value stops being tied to user seats—it’s tied to actions, outcomes, or usage.
If your product uses AI, continuing to price by seat may dramatically misalign with how value is delivered. This can make your product seem overpriced or underperforming, even when it’s delivering tremendous value.
Action item: Start identifying if and where AI is creating value independent from the user. If you can locate examples in your product, it’s probably time to rethink what your pricing is anchored to.
UBP isn’t just for infrastructure companies anymore
Companies like Snowflake and AWS have used UBP for a long time, and now it’s spreading fast to application-layer SaaS—especially where AI is involved. This is because UBP is the only model flexible enough to monetize AI in real time. Trying to sell AI features through static packaging and procurement cycles just can’t move fast enough to keep companies competitive.
Speed and agility are becoming competitive differentiators. If you’re stuck in a packaging or SKU-approval cycle, you’re likely giving ground to faster, nimbler competitors.
Action item: Ask yourself, “How quickly can we launch and monetize a new AI capability today?” If the answer is weeks or months, your billing system could be the answer to unlocking speed and flexibility for your product roadmap.
Value metrics and usage metrics aren’t the same
Great pricing design starts with value, but value isn’t always measurable. Value metrics describe how customers experience desired outcomes. Usage metrics are what you can track internally and charge for. Here’s a quick look at the differences:
- Value metric: Defines what drives customer value. This is the foundation of your pricing model and should be carefully chosen and rarely changed.
- Usage metric: Tracks measurable activities tied to that value. These are more flexible and can evolve over time.
- Billable metric: Determines how customers are charged. This is the most adjustable, as long as it remains aligned with the value metric.
Misaligning your value metrics and your usage metrics causes friction. For instance, if you’re a customer support company, it might seem logical to price based on “number of messages sent.” But if your customers don’t perceive “number of messages sent” as valuable, there’s a mismatch in value. This can erode trust or block adoption. In this case, customers don’t care how many messages were sent—they care about what the messages resulted in: support tickets resolved is a much more accurate way to measure value. Your pricing needs to map as closely as possible to the value delivered.
One way to address this is with an abstraction layer—think credit-based usage models. Here, you have a middle layer you can adjust as you fine tune your usage and billing metrics, all without touching your core value metric. If you charge per successful outcome, each outcome might cost X credits, and the total credits per outcome might change as customers realize more value.
Action item: Map out the value your product delivers (your value metric) and what your systems measure (your usage metric). If they’re too far apart, you may need an abstraction layer (e.g., credits or tokens) or better instrumentation.
You’re probably moving to a hybrid pricing model—great!
Most SaaS companies won’t flip overnight from seat-based to usage-based pricing. We wouldn’t even advise that. Instead, they’re layering UBP on top of existing seat models. This reflects the reality that some features are still user-driven while others are automated or scalable.
This hybrid model adds complexity, but also opportunity. You can use UBP to unlock new revenue streams while keeping existing models stable around core features.
Action item: Start exploring which parts of your product are better suited to UBP. Can you introduce usage pricing for AI-powered features while retaining seat licenses for core functionality?
Speed and simplicity beat optimization
In fast-moving markets, pricing precision is less important than velocity. Over-engineering your pricing model to perfectly map cost-to-value often leads to confusion and delays.
A clear, understandable, good-enough metric usually outperforms a complex-but-precise one. In AI products, where usage can spike unpredictably, clarity is key.
Action item: Choose pricing metrics that are easy to explain, understandable to the customer, and resilient to abuse. Use early feedback and telemetry to adjust over time.
Your billing experience is part of your product
Unlike seat-based models, where billing is static and predictable, UBP introduces variability. Customers now need visibility, alerts, and guardrails, or they’ll feel blindsided by any unexpected changes.
Poor billing user experience is a top reason UBP fails. To actually succeed, you need to invest in real-time usage dashboards, budget controls, and proactive communication.
Action item: Build billing surfaces that empower users to monitor and control their spend. Review some great examples for inspiration, like OpenAI’s usage dashboard or the AWS Cost Explorer, both of which clearly lay out current costs and usage in an easy-to-understand way.
UBP is a company-wide transformation
Switching to UBP affects every department—from finance and sales to product, engineering, and customer success. Without alignment across the organization, efforts will stall or backfire.
Successful UBP transitions require strong executive sponsorship and clear articulation of why the company is making the change. Successful companies can make the switch in months if their CEO or sponsoring team make it a strategic priority.
Action item: If you’re leading the charge on this pricing change, start by aligning leadership and educating the rest of the organization. If you’re not at the top, build a business case that focuses on agility, monetization speed, and better customer alignment.
tl;dr: Your pricing strategy needs to evolve with your product
AI is changing what software is, which means it must also change how software is priced. Static, seat-based pricing won’t cut it in a world of autonomous agents, elastic compute, and fast-moving innovation.
Here’s what to remember as you transform your pricing:
- In AI, value is dynamic. That means pricing must be elastic.
- Usage doesn’t directly equal value, but it’s the closest measurable proxy.
- Hybrid models are the future. Plan for complexity.
- Billing is not a back office task—it’s customer experience.
- UBP transitions require C-level commitment and cross-org execution.
Watch the full session on transitioning to usage-based pricing with Sam and Scott.
If you're interested in seeing how Metronome can help you transition to usage-based pricing, get in touch! We're here to help you navigate the transition with confidence.
