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December 4, 2019 • 5 minute read

Success-Based Pricing Model: What does it really mean?

Building and deploying innovative technology is time-consuming and stressful, especially when your customer experience could be at risk. There are often variables that are out of your control, making the process daunting and scary. One of those variables is the investment, otherwise known as the price you pay for the system and its use. 

Types of Pricing Models

Pricing models vary from company to company. If you look closely, pricing models can give you valuable insight into vendor strengths and focus areas. Below are some of the most popular pricing models, and what you can infer from them.

Consumption-Based Pricing

Today, most IVR vendors use a consumption-based pricing model, meaning that you pay for volume whether or not the system worked. These spikes in volume are inevitable, and it’s nearly impossible to plan for surges in contact volume. Therefore, this pricing can result in high costs during peak volume, even if many of those conversations are frustrating and inaccurate for customers. Companies such as Twilio use a tiered consumption-based pricing model, meaning that their customers pay completely based on volume. Not only is it difficult to plan for the unpredictable nature of changes in volume, but this type of model doesn’t guarantee the satisfaction of your customers. 

Fixed Fee Pricing

Many vendors also price using a fixed fee model, meaning that regardless of volume or even the success of transactions, you have to have to pay the same flat fee. A fixed fee model means that you’ll know exactly what you’re paying, but you’ll have to pay this fee even when systems fail and your customers are dissatisfied. IVR providers such as Nuance use this subscription-type model, meaning that you have to pay a recurring fee. 

Upfront Costs/Professional Services Fees

Vendors will often bundle hidden fees and unpredictable professional services fees into the upfront costs associated with getting started with your Conversational AI solution. This lack of transparency makes it difficult to plan, and you’ll often feel nickle and dimed. A true partnership is rooted in honesty. It’s important to ensure that your vendor is transparent about these fees and if there will be any additional professional service fees to maintain the system.

Success-Based Pricing

In a success-based pricing model, vendors only charge when there is a successful transaction between the Conversational AI system and the end customer. “Success” is defined by both you and the vendor when the system is built, ensuring that it fits with your business goals. This type of pricing model guarantees that the vendor is equally invested in the success of the technology as you are. At Interactions, we use success-based pricing and are therefore incentivized to make sure the Intelligent Virtual Assistant (IVA) is always delivering the highest quality customer experience.  Let’s dive deeper into this concept:

  • What does it really mean? It is possible to have both a successful IVA and a reduced-risk pricing model. The two do not have to be mutually exclusive. The solution is a success-based pricing model. This model is able to handle spikes in volume at scale, and you only pay when the IVA successfully completes each transaction. By only charging for success, we’re ensuring the satisfaction of our clients, which is why we have 99% client retention. It’s hard to believe, but we really do mean it when we say that you only pay for successful transactions. Together, as partners, we define what “successful” actually means. And because we only charge for successful transactions, we’re obsessed with our own performance metrics and continuous improvement. This is a mutual unity between us and our clients–we’re invested in their stellar performance, or else we won’t get paid!
    • The benefits
      Having a partner to support the end-to-end delivery of an IVA not only reduces your stress, but can also reduce the long term costs, resulting in a faster ROI. Because we’re invested in your success, we’re continuously innovating to improve your performance. 
    • More than a vendor, a partner
      Put simply, a partnership goes beyond just standing up a technology. A partner is a company that’s also invested in your success. That’s exactly how we look at it. We also understand that “success” looks different at every company. Maybe you want to increase your CSAT or NPS scores, reduce average handle time for your agents, or even increase your incremental revenue streams. Our IVAs are designed to fit into your unique customer care requirements, and we share this definition of success together.
    • What about the hidden fees?
      Well, there aren’t any. We have professional service fees that are required at the start of every deployment, but you’ll never have to worry about:
          • Annual or quarterly maintenance fees
          • Hardware replacements
          • Upgrade fees
          • Onsite tech support
          • Annual ASR tuning

By being transparent and upfront about what’s included in our pricing model, we ultimately reduce the risks associated with most consumption or fixed-fee pricing models. And, we’re the only Conversational AI company to offer a success-based business model.

Picking a Conversational AI solution is more than just picking a technology, you need to have a partner that will help you grow and succeed.


Want to learn more? Let’s talk.