Reasons Companies Are Transitioning From Seat-Based Pricing

Seat-Based Pricing is Dead. Here’s Why: Seat-based pricing had its moment, but it’s a relic in the age of intelligent agents. Why should businesses pay for "seats" when the work isn’t tied to how many people log in but to the outcomes they deliver? The old model is rigid, outdated, and disconnected from what really drives value. A study by Gartner indicates that 70% of businesses prefer usage-based pricing over per-seat pricing for SaaS applications. This preference stems from the flexibility and cost-effectiveness that usage-based models offer, aligning expenses more closely with actual consumption and value derived. At SuperAGI, we’ve ditched the deadweight. Our pricing isn’t about how many users you have; it’s about what your agents do. It’s built on outcomes and agent actions—because that’s where the real ROI lives. Every action an agent takes, every task completed, every dollar of value created—that’s the foundation of our model. Outcome-driven pricing models have been shown to reduce operational wastage by 15–20% annually, ensuring that businesses pay for value, not headcount. Also automated systems managed through outcome-driven models just like ones at SuperAGI have been shown to achieve 40% faster task completion rates compared to seat-based systems dependent on user logins. But we get it: businesses still need predictability. So, we tier it out. Structured pricing gives you clarity and control without sacrificing flexibility. 👉 Pay for What Matters: Pricing tied to actual agent activity and outcomes. No fluff, no wasted dollars. 👉 Predictable Tiers: Simple, transparent plans that scale with your needs. Budget-friendly without sacrificing performance. 👉 Aligned Incentives: When our agents deliver results, you win—and so do we. That’s how pricing should work. Seat-based pricing is for the past. With a significant shift towards usage-based models, SuperAGI’s outcome-driven approach is how companies will scale into the future. It’s smarter, fairer, and built for where work is headed—not where it’s been. ( All research quoted is in comments )

I keep seeing the same pattern destroy SaaS companies: AI makes their customers insanely productive. Those customers need 80% fewer seats. Revenue falls off a cliff. The pricing model is literally eating itself. I've executed pricing transformations across 4 SaaS turnarounds. What worked 18 months ago now destroys value - every SaaS company is racing to embed AI, and it's breaking their revenue models. The automation paradox: AI makes customers wildly productive, so they need fewer seats. You just automated away your own revenue model. 85% of SaaS companies have abandoned pure per-seat pricing. The holdouts are learning why the hard way. Here's what actually works now: Track different data. Old way: Seats, tiers, revenue per account. New way: Token consumption, API calls, automated workflows. Found one enterprise using AI to replace 10 seats while consuming 100x the resources. Seat pricing misses this completely. Price outcomes, not access. Old way: ROI = human hours saved. New way: Automated resolutions, workflows completed. Saw $500/month AI running entire departments. Customer saves $2M annually. Your pricing is broken. Build hybrid models. Old way: Per-seat with usage tiers. New way: Base subscription + AI consumption. Example: $X base platform fee + $Y per 1,000 AI resolutions. Revenue jumps 3x. Churn drops. Value finally makes sense. Model the seat apocalypse. Old way: 20% churn assumptions. New way: Accounts dropping from 50 to 10 seats but 10x-ing AI usage. Price it right = 2x revenue. Miss it = -60%. Prove value first. Old way: Show features, hope they get it. New way: "Our AI resolves 1,000 tickets = 40 human hours." Now $2/resolution pricing clicks. Without proof, you're just taxing AI. CS becomes AI coaches. Script: "You're paying for 50 seats but AI handles 30 of those workflows. Let's optimize." Fewer seats, higher revenue. Trust wins. Real-time transparency. Token usage dashboards. Cost predictions. 80% alerts. Show exactly what AI costs vs human alternative. Black box pricing = dead company. Most SaaS companies still add 50% "AI premiums" to seat licenses. Meanwhile, Salesforce charges per conversation. Zendesk per ticket resolved. The leaders already moved. But the window's closing. Companies with consumption-based AI models report 38% higher growth. Foundation models commoditize by 2030. We have maybe 24 months. After that, it's a race to the bottom. The fundamentals from my 4 turnarounds still apply - but the game has changed. We used to price software that helped humans work. Now we're pricing software that replaces them. Get this transition wrong and you'll watch competitors eat your market share. Get it right and you own the next decade.

Last week, I was chatting with a senior executive who confessed something surprising: "I know AI agents are supposed to save us money, but I'm not sure *how* to budget for them." That's the sound of an industry in transition. The SaaS playbook we've all memorized is being rewritten in real-time. Remember when we simply paid per seat and called it a day? Those clean, predictable models are colliding with AI agents that don't just help humans work - they replace entire workflows. This isn't theoretical. I've watched CTOs struggle to explain why an AI tool that eliminates 5 headcounts should be budgeted under software instead of labor savings. The mental models don't align. Think about it: when your AI agent autonomously negotiates vendor contracts or manages your customer support queue, are you buying software or hiring a digital employee? I'm seeing four distinct pricing models emerge from the AI companies: 1. The traditionalists: charging per seat/user (familiar but misaligned) 2. The consumption crowd: pricing based on tokens/API calls (transparent but unpredictable) 3. The packagers: fixed monthly fee for bundled capabilities (simple but leaves value on the table) 4. The value capturers: pricing based on outcomes like revenue generated or costs saved (aligned but complex to implement) What fascinates me is watching founders migrate from left to right on this spectrum as they mature. Almost everyone starts with what's familiar, then evolves toward what works. The most successful AI companies I'm looking at are finding creative ways to tap into labor budgets, which are typically 10x larger than software budgets. They're not selling "AI tools" - they're selling digital workers who deliver measurable outcomes. For buyers, this means the old procurement playbook needs updating. Don't ask "how much per seat?" Ask "what specific outcomes can you deliver, and can we tie payment to those results?" The winners in this market won't be the ones with the cleverest AI. They'll be the ones who solve the pricing puzzle in ways that align their success with yours. I'm curious - if you're building or buying AI agents, which pricing models are you seeing work best?

SaaS pricing is shifting from selling seats to selling outcomes. I've been talking about this since March, and the noise is only getting louder. Last month, Sarah Tavel from Benchmark pointed out in her post “Sell Work, Not Software”, that we’re moving from selling software to selling work. This creates blue ocean opportunities by focusing on real value and outcomes, not arbitrary metrics like headcount. Jamin Ball from Altimeter said the same thing in his post, “Is Seat-based Pricing Dead?”. It's about reflecting the value we deliver, not just the number of seats sold. If our solution works as intended, you should achieve your goals without needing to hire more people, right? So, why is this happening now? Two reasons: Post-ZIRP Era: Layoffs are becoming the norm. Fewer seats are sold, and the ecosystem feeds on itself. SaaS companies, early adopters of tech, are feeling the pinch as there are fewer people to sell to, leading to reduced revenue. AI: Companies are leveraging AI to become more efficient, reducing the need for additional headcount. Instead of hiring more, they're implementing AI to optimize operations. The old way of pricing fails to align value with cost. Each seat no longer correlates to the value a company derives. Many companies end up cannibalizing their business model as AI promises to do more with fewer resources. As we rethink our pricing models to reflect the value we deliver, the focus should be on outcomes and results, not just the number of seats we fill.

The end of seat-based pricing is near. For decades, SaaS companies thrived on seat-based pricing. CRM tools, helpdesks, design and even collaboration software made you pay for every additional user. Think Salesforce, Zendesk, Freshworks, Hubspot, Slack, Zoom, Figma and list continues... The logic? More seats = more value. But AI Agents is about to drastically shift this model. Why? Because AI agents don’t need seats. They don’t take breaks, don’t clock in or out. They just work. And they can handle most of the work humans traditionally did. If an AI agent can resolve customer tickets, manage campaigns, or generate reports, the number of human users (seats) will shrink dramatically. And when that happens, businesses will no longer want to pay based on seats. They’ll want to pay for outcomes. Enter usage-based pricing. You don’t pay for how many people are using the software—you pay for how much value it delivers. Think API calls, workflows executed, or issues resolved. This shift is already visible. Take Freshworks as an example—once a darling of the SaaS world. Its growth story has hit roadblocks, with declining market multiples and slower expansion. The reason? Seat-based models are losing their appeal as businesses tighten budgets and look for better ROI. Paying for value—measured by usage or outcomes—is where the market is heading. The SaaS market is at a turning point. Seat-based pricing was perfect for the human-driven SaaS era. But in the AI-driven era, it’s outcomes, not users, that matter most. Those who fail to adapt will be left behind. Tell me in comments what's your take on this?

Before the iPhone came out, carriers used to make money by selling minutes. After the iPhone? They started making money selling data. Here's the big problem with selling minutes: there's only 1440 minutes in a day. You're capped on how much you can make from a customer. But charging for data consumption? It's limitless. This is the big shift happening in SaaS today. Seat-based pricing is capped. With companies shrinking workforces, this makes for an even worse pricing model than carriers charging for minutes. So what's the big shift? Charging based on outcomes. This is what I learned about during my walk with Manny Medina now the Founder and CEO of Paid where they help SaaS companies set up billing systems for AI Agents. SaaS Companies are now looking at four distinct new pricing models as they build on Paid: 1) FTE Replacement Model. Price per Agent. 2) Consumption Model. Price per Action. 3) Process Automation Model. Price per Workflow. 4) Results-Based Model. Price per Outcome. If you're deploying Agents for your customers, you should definitely check Manny's new company Paid out so you're properly architected to bill and get out of the Seat-based pricing model. And no, this isn't a sponsored post. I just thoroughly enjoyed our walk and our conversation and I think he's got the right unique insight for this big shift that's happening. If you're not yet building AI-Agents, if you're still thinking about how to properly leverage AI inside of your aging SaaS platform, I dig more into the Death of the Seat-based Pricing Model on this week's edition of The GTM Lever. You can read it here 👇 https://lnkd.in/gKMNtn46

𝗧𝗵𝗶𝘀 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝘀𝗵𝗶𝗳𝘁 𝗶𝘀 𝗵𝗮𝗽𝗽𝗲𝗻𝗶𝗻𝗴 𝗶𝗻 𝟳𝟴% 𝗼𝗳 𝗦𝗮𝗮𝗦 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀. It’s about to disrupt your entire revenue model. 𝗖𝗼𝗻𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻-𝗯𝗮𝘀𝗲𝗱 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝗶𝘀 𝗿𝗲𝗽𝗹𝗮𝗰𝗶𝗻𝗴 𝘀𝗲𝗮𝘁 𝗹𝗶𝗰𝗲𝗻𝘀𝗲𝘀. 𝗕𝘂𝘁 𝗵𝗲𝗿𝗲'𝘀 𝘁𝗵𝗲 𝗵𝗶𝗱𝗱𝗲𝗻 𝘁𝗿𝗮𝗽: Churn becomes instant with usage-based models. No contract duration buffer to prove value. 𝗧𝗵𝗲 𝗵𝗶𝗴𝗵𝗲𝘀𝘁 𝗰𝗵𝘂𝗿𝗻 𝗶𝘀𝗻’𝘁 𝗳𝗿𝗼𝗺 𝗯𝗮𝗱 𝗽𝗿𝗶𝗰𝗶𝗻𝗴. 𝗜𝘁’𝘀 𝗳𝗿𝗼𝗺 𝘄𝗲𝗮𝗸 𝗽𝗿𝗼𝗱𝘂𝗰𝘁-𝗺𝗮𝗿𝗸𝗲𝘁 𝗳𝗶𝘁. When customers stop using your AI features, it’s rarely about cost. It’s because you built generic tools instead of solving their specific workflow problems. 𝗧𝗵𝗲 𝘀𝗺𝗮𝗿𝘁 𝗽𝗹𝗮𝘆 𝗳𝗼𝗿 𝟮𝟬𝟮𝟱: • Hybrid model: Base subscription + AI usage tiers • Workflow-specific pricing (not generic AI features) • Outcome-based components tied to measurable ROI 𝗧𝗵𝗶𝘀 𝗺𝗮𝘁𝘁𝗲𝗿𝘀 𝗯𝗲𝗰𝗮𝘂𝘀𝗲: Text generation and summarization are becoming table stakes. You can’t monetize commoditized AI. 𝗖𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘁𝗵𝗮𝘁 𝘀𝘂𝗿𝘃𝗶𝘃𝗲 𝗰𝗼𝗻𝘀𝘂𝗺𝗽𝘁𝗶𝗼𝗻 𝗽𝗿𝗶𝗰𝗶𝗻𝗴 𝗱𝗼𝗻’𝘁 𝗷𝘂𝘀𝘁 𝗶𝗻𝘀𝘁𝗿𝘂𝗺𝗲𝗻𝘁 𝘂𝘀𝗮𝗴𝗲, 𝘁𝗵𝗲𝘆 𝗼𝗯𝘀𝗲𝘀𝘀 𝗼𝘃𝗲𝗿 𝗷𝗼𝗯-𝘁𝗼-𝗯𝗲-𝗱𝗼𝗻𝗲 𝗮𝗹𝗶𝗴𝗻𝗺𝗲𝗻𝘁. The moment your AI stops feeling essential to their daily workflow, usage drops to zero. No pricing model can save a weak PMF. 𝗧𝗵𝗲 𝗰𝗼𝗺𝗽𝗮𝗻𝗶𝗲𝘀 𝘄𝗶𝗻𝗻𝗶𝗻𝗴? They’re pricing sophisticated, industry-specific AI that delivers measurable business value. Is your pricing model ready for the consumption economy? Special thanks to Kyle Poyar for sharing these SaaS pricing insights. #SAAS #PMF #GTM 

ARR IS DEAD — LONG LIVE ARR The last two decades of SaaS have been great for seat-based pricing (and product-led growth built around this pricing strategy). Typical CRM contract: pay annually upfront for a certain number of seats and get access to Salesforce's (complicated) product that helps you with your customer workflows. Figure the rest out yourself. Lots of customization, people, processes, etc. But AI workflows are changing the status quo. It's not "buy software, and do it yourself" anymore. We are seeing a shift of SaaS from a passive tool (+DIY) to active results. You'll buy an end result, managed for you. And we're already seeing pricing models from Salesforce / Clay / Intercom update to reflect this. Category creators like 11x are starting with outcome based pricing right out of the gate. 𝗢𝘂𝘁𝗰𝗼𝗺𝗲-𝗯𝗮𝘀𝗲𝗱 𝗦𝗮𝗮𝗦 𝘄𝗶𝗹𝗹 𝘁𝗮𝗸𝗲 𝗼𝘃𝗲𝗿 𝗶𝗻 𝘁𝗵𝗲 𝗻𝗲𝘅𝘁 𝘁𝘄𝗼 𝗱𝗲𝗰𝗮𝗱𝗲𝘀. With outcome-based SaaS, you're buying solved problems, not tools. You pay per outcome (”X demo calls done, Y integration challenges solved”), not per seat or number of users. The reason is simple: the value of the product isn't connected to how many people have access to it. Why would I pay for ten seats of an AI marketing tool? Even IF I'm getting > 10 seats worth of value. I want to buy an outcome of a set of great TOFU successes. AI workflows are changing how we get value from software. So let's change pricing to reflect that. 𝐓𝐡𝐢𝐬 𝐢𝐬 𝐠𝐫𝐞𝐚𝐭 𝐟𝐨𝐫 𝐜𝐮𝐬𝐭𝐨𝐦𝐞𝐫𝐬, 𝐀𝐍𝐃 𝐛𝐞𝐭𝐭𝐞𝐫 𝐟𝐨𝐫 𝐞𝐧𝐭𝐞𝐫𝐩𝐫𝐢𝐬𝐞𝐬 If you think about it, outcomes are how everyone makes buying decisions. Who’s excited to buy Salesforce itself? It’s the less cumbersome, more sophisticated, way more personalized, prospect and customer management they want. Better for the customer (headache guaranteed removed) and better for the CEO (no more throwing an army of humans at customers to make a churn decision emotionally difficult for the customer) ❌ Seat-based pricing ❌ Access-based pricing ✅ 𝐎𝐮𝐭𝐜𝐨𝐦𝐞-𝐛𝐚𝐬𝐞𝐝 (𝐚𝐧𝐝 𝐡𝐨𝐰 𝐰𝐞 𝐠𝐞𝐭 𝐭𝐡𝐞𝐫𝐞 𝐢𝐬 𝐡𝐨𝐰 𝐰𝐞 𝐠𝐞𝐭 𝐭𝐡𝐞𝐫𝐞*) BIG asterisk here - I know this AI pricing model needs a lot more standardization. Seat-based pricing will still be around for a while. But for companies that shift to this model, it likely means ARR reporting around seats won't make sense in the future. How does that impact SaaS? If you're charging per customer service ticket resolved, how do you translate that to predictable ARR? This is THE question for the AI era. ---

I think the winner in the sales tech race will be the company that figures out how to break away from seat-based pricing and cracks usage-based pricing. Here's why: Today, there are about 2.5M reps (SDRs, AEs, CSMs/AMs). My prediction: this number will shrink over the next few years. But companies will still have to generate pipeline (SDRs) + close revenue (AEs) + retain/upsell customers (CSM/AMs). How will companies still hit their revenue targets with fewer reps? My thinking is simple: there will be new tooling/infrastructure that will help companies generate more revenue with less people. But these tools can't be seat-based, or else their NDR will organically shrink (not good). Instead, these tools need to figure out how to capture the value they're driving. Here's an example... Today: - ACME corp has 10 SDRs - They send a total of 33K emails a month - That generates a total of 150 meetings a month (15 meetings per rep per month) In 2025: - ACME corp has 2 SDRs - They send a total of 66K emails a month - That generates a total of 450 meetings a month With the current pricing model of most sales technologies, the contract size, in this example, would shrink 80% (from 10 seats, down to 2). Yikes. But with a true usage-based pricing model (even outside of email credits), the contract size should *increase* by 2-3X (because they're sending double the emails and triple the outcome). This makes logical sense, because the tool is enabling this company to effectively 10X their output. Whoever figures out how to truly capture *outcomes* instead of seats will win big in the new era of gen ai tooling that will power these "10X Reps." PS - The operators of these systems may look more like a "Growth" person than a traditional SDR. (I think SDRs, Ops, and Growth Marketing are best suited to figure out this new role and power pipeline generation in the future.)

How do you price a product? I've heard a lot of opinions left, right and center here in Silicon Valley. But in my experience one thing remains to be added here: It's important to align what you charge for with the value your customers receive. Seat-based pricing makes sense when more work means more people. But with AI eating a lot more jobs and shifting cost from humans who take seats to agents who take tokens, this may need rethinking. Charging based off of usage (or if possible, success) makes a lot more sense then. For example, in support, pricing has traditionally been per seat, but as we shift to AI agents handling more and more tickets, the more natural pricing model is per ticket solved. Does that mean seat-based pricing is dead? No. It still works in plenty of cases. But as AI keeps changing how work gets done, usage-based (or even success-based) models are starting to feel like a better fit.