In the 1980s and 1990s, buying software went something like this: you’d go to a store like Fry’s Electronics, pick up a shrink-wrapped box filled with floppy disks—or later, a CD-ROM—bring it home, and install it. Whether you actually used it or not, you paid for it, and that was that. If you wanted an upgrade, back to the store you went for another box.
The Internet changed everything, making it possible to sell software differently: as a service. Salesforce pioneered the “Software as a Service” (SaaS) model, and soon, companies like Google, Microsoft, and Adobe adopted it as the new industry standard. SaaS brought numerous benefits: the software was always up to date, and you could add or remove seats as needed.
However, one pricing challenge remained. Once you bought a seat, you paid for it annually, regardless of usage. Unused seats sit idly on a proverbial store shelf, hence the derisive moniker “shelfware.”
A few years later, at the infrastructure layer, companies like Amazon (with AWS) and Snowflake introduced consumption-based pricing, where you were charged only for what you used. Whether paying upfront or as you went, the contract value ultimately depended on actual usage—more compute or bandwidth meant a bigger bill.
Today, AI agents executing processes autonomously enable an entirely new pricing model, where you pay only when the software achieves specific, valuable outcomes: outcome-based pricing.
Pricing models
| Pricing model | Type | Potential for wasted spend | Measurement | Examples |
|---|---|---|---|---|
| Traditional | Fixed | High | Seat-based or flat rate | Application software (CRM, ATS) |
| Consumption-based | Variable | Medium | Usage-based (API calls, time on platform) | Infrastructure as a Service (compute) |
| Outcome-based | Variable | Low | Resolved conversations, ecommerce purchases, memberships saved | Online marketing (pay for conversion) |
What is outcome-based pricing?
Like consumption-based pricing, outcome-based pricing varies with usage. However, unlike consumption-based pricing, outcome-based pricing is tied to tangible business impacts—such as a resolved support conversation, a saved cancellation, an upsell, a cross-sell, or any number of valuable outcomes. If the conversation is unresolved, in most cases, there's no charge.
As companies increasingly rely on AI agents to represent their brands, establishing this presence requires time and intentional effort. During the initial weeks of deploying a Sierra agent, we iterate to drive continuous improvement.
But our commitment doesn’t end at deployment. To drive even greater cost savings, revenue growth, and profitability, we continue to deploy concerted, directed optimizations to refine the agent's performance over time. This isn’t just because we care about your success—it’s embedded in our outcome-based pricing model, ensuring that both Sierra and you benefit from sustained, measurable impact.
With outcome-based pricing, Sierra gets paid only when we complete a task for you. At the same time, you realize meaningful cost savings or revenue gains, motivating you to direct as many of your customer interactions to us as possible. Our incentives are aligned.
Mythbusting outcome-based pricing
While nearly everyone likes the idea of outcome-based pricing in principle, many have understandable concerns about what it means for their business in practice. No one wants to face a massive invoice, navigate an inscrutable set of criteria to confirm an outcome, pay for escalations, or be limited to a single pricing model.
By offering outcome-based pricing, we stay aligned with your success. We understand that outcomes aren’t one-size-fits-all, and we don’t treat them as such. Some resolutions are straightforward, like answering your customer’s question and getting them on their way. Others are more complex, such as managing an issue that would typically require a 20-minute call with L2 technical support. And if a case needs to be escalated, in most cases, there’s no charge. We provide clear, agreed-upon criteria for each outcome upfront, ensuring transparency and predictability in your billing.
As we partner with you to design agents tailored to your brand and customers, we recognize that outcome-based pricing may not always be the best fit. In such cases, we work with you to create a blended pricing approach. For example, routing or greeter-style interactions may align better with consumption-based pricing, where payment is based on conversation count, regardless of the outcome.
Rethinking CX with outcome-based pricing
Legacy customer experience (CX) providers face a dilemma. Their revenue models depend on seat-based pricing, where you pay thousands of dollars annually for each license. While these vendors may promote AI agents that autonomously resolve cases, they’re trapped in a conflict: the more effective their AI becomes, the fewer contact center seats their clients need—undermining the provider's own revenue model. So, if a legacy provider pitches you an AI agent, it’s fair to ask, “How much will my seat-based license bill shrink?” If the agent truly delivers, the answer should be: significantly.
At Sierra, we see things differently. With no reliance on seat-based pricing, we have no conflicting incentives—our success is fully aligned with your outcomes. Our outcome-based pricing means we’re only paid when we drive real results, ensuring our AI agents genuinely support your business success.
Outcome-based pricing = aligned incentives
Imagine a world where software never “sits on the shelf,” and you pay only for value that drives success for your business. At Sierra, we’d love to talk to you about how our approach to AI agents and outcome-based pricing can make a difference for your business.
