Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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First, attribution and data sharing are genuinely difficult. The client implemented the pricing change. Did the change cause the ARR increase, or did the change merely coincide with the launch of a new product? Sound outcome pricing requires baseline measurement, defined attribution windows, agreement on which metrics will be tracked, and client willingness to share the commercial data (revenue, win rates, customer health) needed to measure impact. New clients rarely have this in place. Outcome pricing typically becomes available only after a client has worked with the firm for one or two engagements under consumption pricing and developed the relationship that supports data sharing.
Second, procurement and budget cycles create friction. Variable success fees don’t fit standard purchase orders, and CFOs need to budget specific amounts. The firm has to work with finance teams to structure outcome arrangements that fit annual cycles, setting caps, defining payment schedules, and providing clear measurement protocols. Compounding this, strategic recommendations often have multiyear impact while contracts work on annual cycles, which forces measurement windows that are shorter than the strategy fully needs.
Third, implementation dependency creates tail risk. If the client doesn’t execute on the firm’s recommendations, whether because of internal political resistance, competing priorities, or simple inertia, the outcome won’t be achieved. The firm earns only the base fee despite delivering quality strategic work.
Fourth, the firm itself takes on outcome risk. To price on outcomes, the firm must believe it can produce them with sufficient probability that the expected value of the success fee covers the foregone hourly billing. The memory system helps, because the firm can look at hundreds of past pricing engagements to estimate what percentage of clients in similar situations realize the predicted impact. But the firm is now in the business of underwriting outcomes, and that requires a different kind of discipline than billing for hours. Outcome pricing without predictable delivery cost is just a contingency fee, and unmanaged contingency structures are a common path to financial trouble for project firms.
These constraints mean outcome pricing typically applies to a subset of the firm’s engagements, the high value and well defined ones with clear attribution, rather than to all client work. In practice, the firm might run nine or ten outcome engagements per year out of forty or fifty total client engagements. That is enough to capture meaningful upside on the firm’s most impactful work without requiring every engagement to clear the bar.
Most clients end up using all three pricing layers. A typical midsized client might pay:
$5,000 per month access fee ($60,000 per year): ongoing harness availability and partner judgment
$80,000 per year in consumption: a quarterly pricing scenario model, two competitive analyses, one customer segmentation study, and a market sizing exercise
$150,000 from one outcome engagement: a pricing optimization with $50,000 base and $100,000 in success fees realized after implementation
Total annual spend: $290,000. Under T&M, the same client might have spent $180,000 to $220,000 on similar work but received less of it and waited longer for delivery. The client pays more in absolute terms, gets more value, and the firm captures a higher margin on what it delivers.
The mix varies. A small client might pay only the access fee and consume modestly. A large client might run multiple outcome engagements per year and spend $500,000 or more. The pricing architecture flexes to fit the client’s needs and the firm’s confidence in delivering each type of engagement.
Join companies like Zoom, DocuSign, and Twilio using our systematic pricing approach to increase revenue by 12-40% year-over-year.