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

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. Usage-based models offer better alignment with customer value and revenue scalability.Customer Expectations Are Changing Enterprises prioritize cost predictability. Even in AI-native environments, buyers want fixed pricing or capped usage tiers to maintain budget certainty.Real-World Example: Help Scout’s Pivot Wilton shares a case study on Help Scout’s move from per-user to “contacts helped” pricing. The shift improved customer satisfaction, better aligned with value delivered, and even offered greater revenue predictability. 📚 James Wilton’s Book:  Capturing Value: The Definitive Guide to Transforming SaaS Pricing Get the blueprint for designing pricing that drives both growth and profitability without shortchanging strategy. --- Not Getting Enough Demos? Your messaging could be turning buyers away before you even get a chance to pitch. 🔗 Get a Free Messaging & Conversion Review We’ll analyze your website and content through the eyes of your buyers to uncover what’s stopping them from booking a demo. Then, we’ll give you a personalized report with practical recommendations to help you turn more visitors into sales conversations. And the best part? 💡 It’s completely free. No commitments, no pressure—just actionable advice to help you book more demos. Your next demo is just a click away—claim your free review now.