For years, these models have existed—often discussed, rarely implemented. They’ve been frequently ignored or given minimal consideration by executives who may be too comfortable with the status quo. But the tides are turning, and more companies are now shifting focus toward them. Is it excitement? Unlikely, as the topic can seem dry, even risky. Fear? Possibly. Whatever the motivation, attention is growing.
I’m talking about new pricing models: usage-based, consumption-based, value-based, output-based, and similar models that disrupt the conventional ARR-based, and seat-count approaches. Beyond their clear advantage of customer-centric pricing, these models are set to drive an AI-powered transformation across go-to-market strategies. Here’s a brief primer on these models if you need a refresher.
These models share one crucial trait—they favor customers by placing control, and significantly less risk, in their hands. This shift provides a genuine measure of how customer-centric a company truly is. If your business prioritizes customer success, charging only for what they use or for the value they receive should align with that mission, right?
The Rising Necessity of Customer-Friendly Pricing
So, why would companies take this leap? Because it’s increasingly apparent that soon they’ll have no choice. Advances in cloud technology and AI have finally matured to the point they are eroding traditional vendor lock-in. Customers are growing more sophisticated in their demands, increasingly expecting to pay only for what they need (to rip off a slogan from Liberty Mutual).
The movement towards customer-friendly pricing models got me thinking about implications for Customer Success (CS) professionals. This article builds on insights I shared last month in Structuring CCO/CXO and CFO Collaboration: A Comprehensive Blueprint Approach, where I encouraged a closer relationship between the CCO and CFO. New pricing models offer transformative opportunities to strengthen this connection, driving long-standing business objectives at the executive level.
Revenue Attribution and Customer Satisfaction
Historically, Customer Success and Finance have clashed due to the difficulty in attributing CS efforts to revenue impact. Quantifying the value of preventing customer churn or the impact of regular CS check-ins is challenging—akin to trying to prove that morning meditation boosts productivity. We believe it, but getting it on a spreadsheet is tough.
The Game-Changing Potential of New Pricing Models
The new models have the potential to solve the tension, and in a pretty clever way. When you tie pricing directly to value or usage, suddenly every CS activity has a direct line to revenue. It’s like giving your CFO’s glasses a wipe.
Why This Shift is Transformative:
1. Making Customer Success a Revenue Driver – Making Customer Success a Revenue Driver – New pricing models may finally position CS as a revenue generator. Each time CS teams support a customer’s success, there’s measurable impact, potentially leading to additional revenue. No more waiting until renewal time to justify CS investment—when customers feel they’re paying for true value, they engage more readily and pursue broader goals. The converse, of course, is that they would be just as quick to challenge the vendor when they feel the value and the outcomes are not reflective of what they are paying.
2. Redefining Success Metrics – Customer Success efficiency will see a major transformation. Instead of vague metrics like “time to value” or “customer health scores,” CS teams can now align more closely with the CFO’s language: revenue per CS manager, direct value capture, actual dollars generated.
Consider how this elevates operational excellence:
- Faster time to value (because customers will see it more immediately) doesn’t just mean happier customers – it means earlier revenue recognition
- Better automation (because it will be more fine-grained and infused with AI) won’t just be about efficiency – it will translate directly to improved margins
- Improved scale won’t just be about handling more customers – it’ll be about better operating leverage
3. Clarifying Investment Decisions – Beyond satisfying the CFO, new models empower CS leaders to make smarter resource decisions. With a clearer view of actions’ revenue impact, CS can make more informed choices on team expansion and tech investments.
- For instance, CS leaders will now be able to:
- Project direct revenue per CS hire
- Calculate ROI on technology investments
- Forecast scaling economics and marginal returns
Building a Strategic Partnership with Finance
This shift isn’t merely about improving financial optics; it’s about forging genuine strategic alignment between CS and Finance. To capitalize on this opportunity, CS organizations need to focus on three key areas:
1. Financial Literacy – CS leaders need to become as fluent in financial metrics as they are in customer satisfaction, building skills in:
- Revenue forecasting capabilities
- Investment return modeling
- Scaling economics understanding
- Clear unit economics
2. Establishing Clear Financial Links – Establishing direct connections between CS activities and financial outcomes, such as:
- Direct revenue attribution models
- Clear value capture metrics
- Immediate financial impact measurements
- Predictable scaling frameworks
3. Strategic Alignment – As I discussed in my previous article, effective collaboration with Finance hinges on:
- Shared planning processes
- Joint success metrics
- Aligned investment frameworks
- Common scaling models
The Future of Customer Success
I know this probably sounds a bit optimistic, but I truly believe these new pricing models could be the bridge we’ve been looking for between CS investments and revenue impact. They’re not just making pricing more customer-friendly (though they definitely do that too) – they’re helping create that elusive alignment between CS and Finance that we’ve all been chasing for years.
Imagine a future where CS can justify its value with clear, revenue-based metrics, where CS leaders enter budget discussions with solid financial arguments, and where customer success activities have a measurable impact on the company’s bottom line.
The Path Forward
For companies contemplating this transition, it’s important to understand that this shift is more than just a pricing adjustment—it’s a fundamental change in how we measure and view customer success. It requires new skills, new metrics, and a fresh approach to linking CS activities with business outcomes.
But the potential benefits are enormous. Beyond improved alignment with Finance, this model allows for:
- Clearer paths to scaling CS operations
- Better ability to predict and plan for growth
- More strategic deployment of CS resources
- Stronger justification for CS investments
- Better alignment between customer and company success
Approach this transition thoughtfully, with clear frameworks, capabilities, and partnerships. In the end, these pricing models aren’t just changing how we charge customers—they’re transforming how we view customer success, empowering CS to demonstrate its value in the language of business: revenue and growth.
