Today, there is virtually no aspect of a business that can’t be improved using technology. This is definitely the case when it comes to customer experience, as advances in artificial intelligence, machine learning, chatbots and other technologies have enabled businesses to bring their customer service offerings to new levels.
While this is great for companies and customers, it can be complicated for business leaders who are tasked with solving customer experience shortcomings and making digital transformation happen. Typically, during their quest to find solutions that will work for their organization, their focus turns to finding the right technology - this is where things get tricky.
Many technology vendors sell solutions requiring annual fees, payable regardless of how their solution is performing. This pricing model gives the vendor zero incentive to ensure their product is performing as promised and means that if it is underperforming, the organization – not the vendor – is the one paying the price.
With so many solutions out there, how can business leaders avoid adverse results and choose an option they feel confident will help them achieve desired outcomes? By opting to implement an outcome-based pricing (OBP) solution.
What is Outcome-Based Pricing?
Outcome-based pricing is essentially a pay-for-results fee agreement between a company and vendor, meaning that the vendor only wins when their client wins. Rather than paying for activity or the provision of software or services, the vendor is paid only if and when specific agreed-upon performance targets are met or exceeded.
These custom-designed solutions typically guarantee an outcome that either reduces costs or drives revenues by a specific amount, thereby resulting in a net gain to the company (in addition to the customer experience gains).
Vendors are compensated by sharing in an agreed percentage of the gain. Comparatively, if agreed business outcomes aren’t met, the vendor doesn’t get paid. Essentially the vendor, not the company, assumes the risk related to non-performance.
With OBP, companies are able to eliminate the risks inherent in more traditional pricing models, while enjoying other benefits, including:
- The vendor is committed to continued success and is motivated to continually improve the results.
- Companies won’t be hit with unplanned fees and expenses for professional services – it’s all included in the outcome pricing.
What Inputs Are Required for Outcome-Based Pricing?
OBP models can be built using data that is readily available from contact centers. For customer experience ROI models, this data might include:
- Agent to Agent Transfer Rate
- Annual Chat Volume
- Annual Voice Call Volume
- API & integrations
- Average Handle Time (AHT)
- Business Rules
- Cost Per Chat
- Costs Per Call
- Customer Journey Flows/Call Flows
- First Contact Resolution Rate
- Percentage Contained in the IVR
Get the Business Results You’re Paying For
7.ai offers Outcome-Based Pricing options to clients who want an easy way to remove the risk associated with new technology and service investments. We’ll work with you to design a ‘pay for performance’ ROI model aligned to your business objective, centered around incremental revenue, direct and indirect cost reduction, and CSAT measurements. Contact us today to get started.