For years, software pricing followed a familiar pattern. Sell more seats, expand accounts, scale margin. But today, many products look like software while behaving like infrastructure. Every prompt, every model call, and every piece of automated intelligence carries a real cost. This changes everything about what feels fair to the customer and what is sustainable for the business.
Software that behaves like infrastructure
CJ and I talked about how AI has rewritten the cost structure behind modern products. Behind a clean interface sits a resource intensive engine that drives variable usage costs. The old seat based playbook struggles in this environment. Margins do not expand in the same predictable way, and customers can feel confused or frustrated when pricing does not match how value is created.
When usage drives cost, companies must rethink how they price. Should value be tied to volume, outcome, or something in between. Should pricing communicate fairness or efficiency. These decisions shape customer trust long before a deal closes.
When features become free and pricing power fades
One theme we explored is the rapid commoditization of features. What felt premium last year often becomes table stakes today. AI accelerates this trend. Once everyone can ship similar capabilities, differentiation shrinks and pricing power erodes.
Customers begin to question what they are really paying for. If a competitor offers similar features for less, the perceived fairness of your price weakens. At that point, you are not just competing on product quality, you are competing on psychology.
This is why companies must anchor their pricing around real, measurable outcomes. Without that, buyers will default to comparison shopping and you will lose margin you should have protected.
The limits of value based pricing
Value based pricing is often positioned as a customer friendly strategy, but CJ and I discussed how it can backfire. When buyers cannot clearly connect your price to a specific outcome, the model feels abstract. They may agree the impact is real but still push back because it is difficult to quantify or because the value narrative feels subjective.
This tension becomes even sharper when the product has undeniable impact but a long or complex path to ROI. You can deliver transformational results and still face skepticism if the customer cannot map value to dollars.
Real world chaos: clone competitors and legacy systems
We also went into the unpredictable moments that define pricing in the real world.
Like when a giant company suddenly ships your core feature. Or when your biggest customer still operates critical workflows on systems that feel older than the internet. These situations shape pricing more than any academic framework.
You adapt, you reposition, and you defend your value with clarity. Pricing strategy only works when you can apply it through messy, human, unpredictable scenarios.
Why pricing comes down to psychology, not perfection
In the end, pricing does not reward the company with the most complicated economic model. It rewards the company that understands how customers perceive value and fairness. Your price must tell a clear story:
what the customer gets
how the outcome matters
why the price makes sense compared with every alternative
If that story breaks, the model breaks with it.
My conversation with CJ reinforced something I see every day. The companies that win do not have perfect pricing structures. They have pricing that customers understand and believe in, supported by clear communication and disciplined execution.
