But in order to grant this unique superpower, we as a company had to make one major transition. We had to move to volume-based pricing, enabling us to align our commercial objectives with those of our customers.
Here's the story of how we got there:
- Why a seat-based model stopped making sense for brands utilizing messaging and automation.
- How a volume-based approach helps brands to seamlessly scale with messaging channels.
- The secret to aligning our customers’ commercial objectives with our own.
- How selecting the right volume metric means our customers never have to worry about opening the floodgates.
We’ve been around for a while now. Founded in 2011 as a social media tool, we’ve come a long way. We’re now an all-in-one solution for messaging channels. By harnessing the power of automation and AI, we make it easy for brands to scale their messaging experiences and transition seamlessly from care, to sales, and marketing. We are one of the unique solutions that allow for a real two-way conversational customer experience solution. It's no longer about 1-way outbound messaging where the customer can't talk back to you. Those days are over.
However, at some point, we started to feel some unnecessary friction around our offering. Messaging allows brands to build relationships with customers, automation helps them to do this at scale. Why were customers finding it hard to buy into our vision for the future of customer engagement? We had a feeling something was missing. And after much soul searching we realized we had a major blocker: Pricing.
And, more specifically seat-based pricing.
Why Seat-Based Pricing Was a Blocker
As a company that was initially built for the traditional contact center, we worked off the industry’s standard model: seat-based pricing. Every contact center is filled with seats, so how would that be an issue? The simple answer was: seat-based pricing isn’t suitable for automation.
That gave us two new questions to answer:
- How do you price for something that doesn't require a seat?
- What happens when you build bots so powerful they actually mean your customers need fewer seats to handle more volume?
To answer the first question: you price bots on a flat fee (we’ll go back to why this was totally the wrong way to go).
To answer the second question: you simply lose seats.
Why Volume Pricing Makes Sense
One of the biggest advantages bots have is that they enable messaging channels to scale seamlessly. But, they need to work within a pricing structure that’s fluid. This is exactly where misalignment started to take place, and where the friction with selling our vision became evident.
A dual pricing model tied to seats, plus a flat automation cost, was too rigid and focused on the wrong objective. It was tied too closely with a care only use case, and was almost a growth prohibitor, adding unnecessary friction. We needed a pricing model that aligns with our vision, messaging, strategy and commercial efforts.
What we came to realize was that seat-based pricing creates low to zero alignment between:
- The Value customers generated by using our solution
- The Volume they drive as a result of the value they get
- The Revenue we make as a company.
Basically, we wanted to go from this:
How Do You Start with Volume-Based Pricing, When All You’ve Ever Known Is Seat-Based?
You start by answering the most basic questions. We created a series of objectives that we want our new pricing to achieve both internally and externally. But, more importantly, we wanted to make sure we give our customers (which we refer to as partners) the superpowers we believe we could.
But how do you really start?
What did we actually want to solve?
The Pricing Model Shortlist
- Build a pricing model that aligns with our messaging. Our key messaging is that deflecting call center volume to messaging channels makes perfect sense. Messaging channels now allow for full in-channel resolution. The unique asynchronous, non-session-based nature of messaging, allows for a better customer experience on the one hand. On the other, the ability to layer automation on top, allows for greater efficiency and reduced workload from the agents' side. Simply put: higher efficiency with increased customer satisfaction.
- Build a pricing model that doesn't cannibalize value. Our previous dual-pricing (seats + bots) drives cannibalization of revenue. The automated experiences we build are so powerful that they handle full conversations while also reducing the agents’ workload. Better automation = less seats!
- Build a pricing model that aligns between usage and revenue. We wanted to make sure our new pricing model creates a scalable path for our customers, driven by value and results in volume and adoption.
- Build a pricing model that helps brands transition from using messaging for customer care only, to delivering customer experiences that support sales and marketing.
- Build a pricing model that puts agents and automation together and not against each other.
We wanted to understand what drives valuable conversations. Which channels they come from, and how can we try and tap into the regions our customers see as valuable. How do you do that? Like everything else, you start by looking at the data!
What we quickly came to realize was this:
Consumers have made the shift to messaging! If we want to offer anything of value, we have to make sure we focus on private channels!
Why? There are a few answers:
- This is where consumers contact brands when they have real problems that require solutions. Consumers have adopted messaging channels. There's no question about it.
- Messaging channels allow for full in channel resolution. It allows brands to follow and solve cases from end to end!
- Messaging channels have the ability to layer in automation. That means higher efficiency and reduced workload.
- They enable us to create unique conversion, retention and upsell experiences that are fully automated: like appointment booking and cart abandonment.
Focusing on private channels was a great start, but one thing we always knew is that our customers have a constant fear of “opening the floodgates”. That got us thinking that simply focusing on “Private Channel Inbound Volume” isn’t the way to go. If our customers are cautious of inbound volume increase, we should not be tying pricing to this metric. Instead we constructed the concept of DAC - daily active customer.
What is DAC?
Simply put, it's a daily active customer. It’s a calculated metric that counts a unique customer only once per day but it also comes with a very important caveat: we only count those who received at least one answer from an agent. Why? Simply, if our customer believes the conversation is important enough to answer, we think we should count it. If it hasn’t been replied to? We simply don’t count it.
This was a real breakthrough moment for us. We finally found a way to align ourselves with our customers. We only count the conversations they see as valuable! We see value in the same thing!
But What About When Bots are Responding, How Do You Solve That?
Bots really did present a challenge. By nature, they answer every inbound conversation. But every inbound conversation isn't necessarily a valuable one. What do we do? This is where the real power of AI came into place. We decided to go by “intent”. We have a unique bot structure built off of intents. Intent is what moves conversations and route conversations into the right path utilizing NLU (natural language understanding). If we’re able to identify the intent and we’re able to route the conversation to the right flow, we drive value to that conversation. If we drive value, we count the conversations. If we’re unable to drive value, we don’t count the conversation. Another breakthrough moment. We’re finally moving forward.
One piece was missing though, not all conversations are contained by bots. Some conversations need a bit of a human touch. What do we do then? Well, we simply count it once. Finally, we found a way to put humans and bots together and not against each other!
So What Do We Do With Seats?
With a volume-based pricing model, we found only one solution that made sense. Seats are now unlimited! This is a true contact center superpower. We now give contact center directors the ability to operate with maximum flexibility, structure the call center as they see fit and make sure they’re always prepared. They can scale when it matters and reduce seats when it makes sense to. Having unlimited seats protects contact centers against sudden surges in volume while also giving them the power to evolve and innovate.
The future is about a single customer experience that brings together care, marketing, and sales. The missing piece was a pricing model that worked for everyone. We think that problem is solved.
Move to Messaging. Say hi.