If you save a customer $500K, how much should you keep?

The smartest SaaS teams aren’t debating subscriptions vs. usage anymore. They’re blending them. In this Guide to Hybrid Pricing Models, Metronome distills how leading PLG and SLG companies structure pricing that’s predictable for finance yet flexible for customers. From seat-based plans with usage caps to pooled-credit systems and top-ups, it’s a tactical playbook for building hybrid pricing that works in the real world. If you’re planning your next pricing iteration (or cleaning up the one you already have), start here.

Yo! I dropped a massive 59 page report on the state of AI in finance last week.

Download report.

It’s complete with market maps on every segment of the stack, as well as a breakdown on all the new players who have entered the ecosystem.

And even better, I’m hosting a virtual jam session (I hate using the term webinar) for our readers on Tuesday December 9th. I’ll be there, heavily caffeinated, to take you through everything that’s going on with AI as it relates to finance software.

Rumor has it there will be a guest appearance from my dog and editor in chief Walter.

Please register because it’s my first webinar and I’m nervous.

Question for you:

It's a loaded one.

I was talking to pricing expert Michael Stanisz, Partner at Revenue Management Labs, on the pod. He says he wrestles with this conundrum pretty often.

And I'm like,

And many times they're like,

You gotta keep in mind: The customer has to get something from it too.

In fact, they need to get more than just "something", as the inertia to make a change and rip and replace software or implement a new process are very real.

Now, this isn't an exact science, but you can use these three pillars to triangulate into what's fair:

The biggest factor is: how certain are you that the number is actually true?

An example from the restaurant world to perfectly illustrates this…

Think about a labor-scheduling tool sold into restaurant chains. The ROI model is airtight:

In the spreadsheet, it all pencils out. The math maths.

But here’s the reality anyone who’s run hourly operations knows:

Managers override the system constantly.

They staff based on instinct, weather, gut feel, last night’s disaster, the fact that they can’t stand how loudly Cindy chews gum, whatever.

All that beautiful modeled savings? It evaporates the second the plan meets human behavior.

So even if the tool can save $500K, the customer is thinking:

That’s certainty of value.

It’s not about whether the value can exist… it’s about how certain the buyer is that they’ll capture it.

And when certainty is low, your ability to price against value collapses.

The second factor is the magnitude to the customer. Is $500,000 meaningful to them? Are they currently spending hundreds of millions of dollars per year on their tech stack? If so, yes, I guess it's nice to save $500K, but it's not going to really move the needle.

But if they are spending $2M and you are saving them 25% of their current cost, that's a huge deal. That's cash money records baby where dreams come true.

Similarly when it comes to revenue. If implementing a new system will help a $2M revenue company get to $2.5M in revenue, that's a massive upswing. But if you are pitching a $500K sales increase to Apple, you might as well go back to bed.

Not all $500K gains are created equal.

The last factor is "when". At what time is the customer going to realize the value?

There's a net present value associated with all gains.

Are you talking about $500,000 next fiscal year, or over the next 10 years?

When am I actually going to get some of that benefit?

Michael told the story of a tire manufacturer they worked with. They had developed a new tire for airlines using a better rubber compound that would ideally last longer and reduce replacement frequency. The business case showed airlines would save money over the tire's lifetime.

But here's what the manufacturer didn't think through: airlines would need to pay 40% more upfront for each tire. Yes, they'd recoup that premium through fewer replacements over time, but someone still had to write a bigger check today. That's a real cost of capital problem - cash paid now versus savings realized over years.

The ROI was there, but the cash flow timing made it a harder sell than the spreadsheet suggested.

(Plus, if you weren’t aware, the airline biz is like the absolute worst way to make money in the world. Most companies actually destroy value and are subsidized by the government... So there isn’t a lot of extra cash kicking around).

These three factors determine how much of that $500K you can reasonably capture.

If you are 100% certain that you can deliver $500K in revenue or cost savings in the next three months, and you've validated this is a meaningful figure to your customer, you are in a great position to take an aggressive portion of the value.

In fact, in this scenario, you might be able to capture 70-80% of the value. Your customer gets immediate, measurable benefit and still pockets $100-150K for making a decision. That's enough margin to overcome inertia.

On the flip side, it's a very different conversation if you are hopefully delivering around $500K in total value over the next 10 years, and you're dealing with a massive Japanese conglomerate who isn't even instrumented to measure much of the savings internally anyway. Here you're probably looking at capturing 20-30% of the projected value, because the certainty is lower, the timeline is longer, and the customer needs a much bigger cushion to justify the risk.

And in reality, most B2B SaaS companies end up capturing somewhere in the 10-30% range of quantifiable value.

Now let's add one more wrinkle: does it matter if the $500K is revenue gain versus cost avoidance?

Michael made a good point before answering:

It all depends on who that buyer is, but Michael thought there's usually much more certainty with cost avoidance.

Here's why: If you come to me and say,

I can audit that. I know what I'm paying today. I can measure what I'll pay after implementation. The math is straightforward.

But if you tell me,

Now we're dealing with attribution problems. Did your tool drive that revenue, or was it the new sales rep we hired? The market tailwind? The competitor that went out of business? Revenue attribution is messy.

That said, cost avoidance isn't bulletproof either. Sometimes "cost avoidance" is measured against inflated baselines. The worst case I see is when a procurement person claims they saved $500K by negotiating down from MSRP - a sticker price nobody actually pays. That's not hard savings, that's kabooky accounting.

And on the revenue side, not all revenue is created equal. I could actually lose money on incremental revenue if the margin structure is wrong.

Net net: cost avoidance is usually easier to validate and measure, which means customers (especially CFOs) will have more confidence in it. But you still need to pressure-test the assumptions on both sides. What are you really comparing against? What's the baseline? How are you measuring impact?

The more clearly you can answer those questions, the more value you can reasonably capture.

(But, like, also… don’t be a greedy bastard.)

Me and Michael, a tech pricing and packaging expert, go deep on splitting economic value with your customer… how much should you reasonably keep vs pass on.

We also dig into how pricing constructs have changed in tech. For decades, software pricing was predictable: sell more seats, add more margin. But with AI, every usage prompt has a real cost, and the old economics no longer hold.

Me and Michael dive into what happens when your product looks like software but behaves like infrastructure, how pricing power erodes as features become free, and why value-based pricing might not be as customer-friendly as it sounds. We also explore the chaos of real-world pricing: from Microsoft cloning your startup to measuring ROI when your product’s impact is undeniable but hard to prove, and a few “we still run this on DOS” war stories.

Is OpenAI (a privately held, for profit company) too big to fail? If so, what does this say about the state of our economy?

In this episode of Mostly Growth, me and Kyle Poyar also unpack what separates good from great VPs of Sales, and debate if it’s a a valid economic decision to pay someone else to hang your Christmas lights (BAH HUMBUG!)

Do you bake in phantom revenue and EBITDA that might not materialize? Do you sandbag organic targets to give yourself room? How do you report variance when you “miss” on something you never actually controlled?

I spoke to a PE backed CFO who did 15 acquisitions and sold their company for $5 billion to find out…

Hoping you register for my damn webinar,

CJ