From the course: Product-Led Generative AI Innovation for SaaS Companies

Recalculating SaaS margin and exploring new monetization

From the course: Product-Led Generative AI Innovation for SaaS Companies

Recalculating SaaS margin and exploring new monetization

- [Instructor] Generative AI is transforming SaaS pricing and profitability. To stay competitive, companies must rethink their margin calculations and explore new monetization strategies. Here are some complementary alternative areas that you may want to consider. For example, AI cost recovery, or can you pass AI calls to customers through pricing tiers or value-based pricing? Monetize AI features based on tangible customer outcomes. There is also freemium versus premium. You can offer AI power functionalities as an upsell, or you could also do usage-based pricing, charging per AI-generated action result. The end goal is to align AI investment with revenue growth, so take some time to explore how your pricing strategy will be structured when you introduce new AI functionalities. In the next lesson, we'll discuss compliance and legal considerations when innovating with generative AI.

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