Thanks for sharing! Love it when people share pricing lessons.
If I may challenge the guest a bit on his statement: "If you're pricing it as an agentic model, you’re likely to tap into the budget that is 10x bigger than your typical software budget.”
Sounds great, but this seems based on absolutely nothing. No data to back this up at all. No rationale behind it. Using the right pricing metrics can definitely increase the ACV by 2–3x, but not 10x.
Hey Tjitte! What Prittam was getting at wasn't that you'll see ACV increase 10x automatically by doing that. Like you said, there's no data presented to support that.
The idea was that the accessible budget pool for your solution could be far more than for typical software solutions. As agentic AI gets more advanced, it's able to complete full-loop processes, versus just being a technology that speeds up humans a little bit.
The thought here is you can start to make the argument that it's replacing humans you would have to hire, not just supporting them. So companies could push the rationale that you can pull from your headcount budget, which is often the largest line item at most companies.
If you had agents that could replace 50% of an entire team, support reps for example. Most companies would gladly pay 25% of the cost of employing those people to do that.
But the software budget available in that space if you're not replacing those people is likely far, far less.
I doubt it will be 1:1 access to headcount budget. But it will likely unlock a larger amount of money available, as the value being delivered is a lot more.
Your point is very rational and on paper I 100% agree with you.
But after 10 years of selling software to enterprises and SMBs I can promise you that it doesn’t work like that.
While the labeling as “human resources” definitely brought employees closer to other resources, they’re still on another level.
People feel more in control when hiring humans. It’s a romanticised image for sure, but it persists nonetheless.
They’ll tell themselves you can train these people to do different things and you can hold them accountable. Just Google any lawsuit against self-driving cars and you’ll get my point.
So again, I think your logic is absolutely correct. However, people are irrational and companies are still just a collective of human beings.
Thanks for sharing! Love it when people share pricing lessons.
If I may challenge the guest a bit on his statement: "If you're pricing it as an agentic model, you’re likely to tap into the budget that is 10x bigger than your typical software budget.”
Sounds great, but this seems based on absolutely nothing. No data to back this up at all. No rationale behind it. Using the right pricing metrics can definitely increase the ACV by 2–3x, but not 10x.
Hey Tjitte! What Prittam was getting at wasn't that you'll see ACV increase 10x automatically by doing that. Like you said, there's no data presented to support that.
The idea was that the accessible budget pool for your solution could be far more than for typical software solutions. As agentic AI gets more advanced, it's able to complete full-loop processes, versus just being a technology that speeds up humans a little bit.
The thought here is you can start to make the argument that it's replacing humans you would have to hire, not just supporting them. So companies could push the rationale that you can pull from your headcount budget, which is often the largest line item at most companies.
Does that clear that up?
It definitely makes things clearer, thanks Jeff!
But this belief that companies will ever see it as such is wishful thinking.
Software generally solves new problems or makes existing processes more efficient.
As long as it just replaces humans that can also solve the same problem, it’ll always remain capped.
I would tend to disagree.
If you had agents that could replace 50% of an entire team, support reps for example. Most companies would gladly pay 25% of the cost of employing those people to do that.
But the software budget available in that space if you're not replacing those people is likely far, far less.
I doubt it will be 1:1 access to headcount budget. But it will likely unlock a larger amount of money available, as the value being delivered is a lot more.
Your point is very rational and on paper I 100% agree with you.
But after 10 years of selling software to enterprises and SMBs I can promise you that it doesn’t work like that.
While the labeling as “human resources” definitely brought employees closer to other resources, they’re still on another level.
People feel more in control when hiring humans. It’s a romanticised image for sure, but it persists nonetheless.
They’ll tell themselves you can train these people to do different things and you can hold them accountable. Just Google any lawsuit against self-driving cars and you’ll get my point.
So again, I think your logic is absolutely correct. However, people are irrational and companies are still just a collective of human beings.