Per-seat pricing became software’s default because it was easy to buy and easy to budget for. But ease isn’t the same as value.
That disconnect came up throughout our recent State of the Industry discussion on pricing in the age of AI, featuring Andrew Pearsons, Partner at M33 Growth, Melanie Nabar, Principal at Volition Capital, and Kyle Hart, CEO of Juicer.
When software does more of the work, counting the people who log in tells you less about the impact it has on their business.
The market is responding. In Growth Unhinged’s 2026 State of B2B Monetization report, hybrid pricing adoption rose 48% year over year. Hybrid models combine two or more approaches, such as a per-seat subscription with usage charges for AI features.
Seats can stay in the mix. They just don’t have to do all the work.
Key takeaways
- Find the economic trigger. Identify where customers recognize the value your product creates.
- Pick a metric you can bill against. It should track value, be measurable and help buyers anticipate their costs.
- Choose seats on purpose. They work when adding users reliably increases customer value.
- Make pricing explainable. Your sales team needs to connect the bill to the benefit.
- Check the economics. Consider delivery costs, competitive alternatives and customers’ willingness to pay.
Why seats became the default
Per-seat pricing solved a practical problem: buyers could budget around headcount, and sellers had a straightforward way to quote and expand contracts.
As Andrew explained, familiarity and predictability helped seats become the default. That didn’t make them the right metric:
“I think seat-based pricing has been dead for a very long time. A lot of software companies, they just held on to it. And it’s because the seats had absolutely nothing to do with how you were delivering value to your customers.” – Andrew Pearsons, Partner, M33 Growth
Melanie agreed that seat pricing “is now dead in a lot of ways.” A year ago, she noted, many companies would simply start there.
Andrew also noted that customers have become more familiar with alternative pricing models.
That creates room to reconsider how you charge, but it doesn’t remove the need for predictability. A buyer can understand usage-based pricing and still need to know what next quarter’s bill will look like.
The question is whether your pricing model reflects how customers benefit from your product while giving them enough clarity to buy it.
Find the economic trigger
The fundamentals of pricing still hold. Andrew described the first step as understanding how customers receive and perceive value, including “at what point in the workflow do they kind of have that economic trigger.”
That trigger is where customers recognize that your product has made a difference. It gives you a starting point for choosing a pricing metric.
“You really do need to think about what is your value driver, and how to price according to that,” Melanie said.
Ask three questions:
- What does your product change for the customer? More revenue, lower costs, saved time or reduced risk.
- Where does the customer recognize that benefit? A completed workflow, a recovered payment or a better business decision.
- What measurable activity or result tracks that benefit? Transactions processed, workflows completed, locations served or dollars recovered.
Turn the value driver into a workable pricing metric
What customers value and what you bill for are related, but they aren’t always the same thing. A product may save time, for example, while charging for completed workflows that reliably produce those savings.
Before committing to a metric, run it through three checks:
- Does it scale with customer value? A higher bill should correspond to a benefit the customer recognizes, not simply more activity inside your system.
- Can both sides verify it? You and your customer need a shared definition of what counts. For outcome-based pricing, that includes how the result is attributed to your product.
- Can buyers estimate their costs? They should be able to model a typical month and understand what happens when usage increases.
If the closest measure of value is too hard to verify or forecast, choose a simpler metric that still tracks the benefit.
Seats still have a place
Moving away from seats as the default doesn’t mean seats are always wrong. During the panel, Kyle pointed to Day AI as an example of an AI company using seat-based pricing in a human-centered workflow.
“I think there are still use cases for it, I just don’t think it should be the default anymore,” he said. Seats make sense when each additional user reliably adds customer value.
For a product that completes work on a customer’s behalf, user count tells you much less. A small team can generate substantial value without adding another login. In that case, a usage metric or hybrid approach better reflects how the product is used.
The further your metric drifts, the harder it sells
Andrew offered a rule of thumb for evaluating any pricing metric:
“The more that your metric moves away from the customer’s perception of where the value happens in the process, I think the more difficult it is for them to understand it.” – Andrew Pearsons, Partner, M33 Growth
That friction shows up with seats, credits, transactions or any other unit. If customers can’t connect an increase in their bill to an increase in value, the price becomes harder to defend at the initial sale and at renewal.
It also matters inside your company. As Andrew noted, moving beyond founder-led sales means equipping reps to explain both the pricing model and how they arrived at a customer’s quote.
If a rep can’t quickly explain what a customer pays, what changes that amount and what the customer gets in return, the model needs more work.
Pressure-test the economics
Andrew recommended drawing a pricing triangle with cost, competitors and customer value at its three corners.
Kyle described a similar process: understand the business’s costs, where customers get value and how competitors price and package their products.
Use those inputs to assess the economics of your proposed model:
- Cost establishes what you need to cover. Include variable AI costs, and test your rate against heavy-use scenarios so margins hold as usage grows.
- Competitors provide a reference point. They set expectations, so pricing above them needs a clear reason.
- Customer value supports the price. Understand the benefit customers receive and test what they are willing to pay for it.
Then run pricing experiments. Kyle emphasized getting feedback from sales reps to understand what is working and where adjustments are needed. Look at whether buyers understand the model, where they push back and whether growing usage supports healthy margins.
Price where the value lands
Anchor your pricing to the difference your product makes for customers. Choose a metric that tracks that benefit, can be measured consistently and gives buyers a reasonable sense of what they’ll pay. Then test whether the economics work for your business.
Seats can still be the answer. They just need to earn that spot.
