Pricing for products where the cost moves.

Every software CFO right now has two priorities that directly contradict each other. Cut software costs. Increase AI usage. Fair use is how you hold both.

As companies scale, LLM usage scales with them. Even after negotiating unit costs down, you're looking at 40–50% margin at best. So how do you get back to 80%+ margins?

The reality is 5–10% of users are driving 90% of your costs. A price increase for 100% of your base when 90% aren't the problem is a tough sell. A company's cost problem is not a customer problem.

So design a lever that only the 10% will feel.

You have two options: raise prices across all 1,000 customers to cover the tail, or set a fair use threshold at the 95th percentile and only trigger a conversation for the 50 customers above it. Option one risks churn from 950 customers who were never the problem. Option two protects your margin without touching anyone using the product normally.

I've used fair use to cut product COGS by 33% in six months. The framework: Inspect your usage distribution, Analyze the P95 threshold, Apply it as a hard or soft limit depending on your product type.

You've rebuilt the nurture sequence twice. You've tested new creative, swapped channels, thrown a webinar at it. Conversion rate hasn't moved. Here's the thing nobody tells demand gen leaders: pricing problems disguise themselves as marketing problems.

A confusing pricing page looks like a UX issue. A broken free-to-paid funnel looks like an onboarding issue. Soft pipeline looks like targeting. So you keep optimizing the stuff you control while the actual problem sits upstream, untouched.

The full article covers the four pricing fundamentals nobody teaches marketers, and a maturity curve — Ship and Pray → Copy and Undercut → Research and Forget → Test and Learn — so you can figure out where your company sits and what to do next.

How much is too much to charge? Wrong question. How you charge is more important than what you charge — price points are easy to adjust, but unit choice requires an internal and external overhaul once it's set.

There are two scenarios: the ideal (1–2 months, 10–15 conversations) and the imperfect (30 days, 3 conversations). In both, you anchor on the same three things: cost at scale, competition, and whether your metric grows at the rate you want your business to grow.

The best companies re-evaluate pricing every quarter. The question isn't whether your model is right — it's whether you're asking often enough.

Every concession feels like it costs you once. It doesn't. Give something because a buyer asked for it, and you've trained them to ask again — then set up a renewal you're structurally built to lose.

Discounting isn't the problem. Discounting without a system is. The rule most CFOs run on: keep total concession under 10–15% of deal value. Stay under it and the discount is a rounding error in the board deck. Go past it and you're not defending a discount anymore — you're defending your judgment.

The fix: give to get — always. No concession leaves the table without something coming back — a longer term, prepayment, a reference, a roadmap item you get to deprioritize.

A price increase isn't a blanket bump everyone resents. Done right, it's value capture — concentrated where you've earned it. I once raised prices 5–20x across a book of contracts and lost under 5% of it.

Most teams treat a raise like a thermostat — nudge the whole building up and hope nobody complains. That's the version that gets you churn: you've charged 100% of your base to fix a problem maybe 20% of them created. A real raise is value capture — find where you've delivered more, and to whom.

The fix is a system: run the numbers to a defensible "why," arm the people who deliver the message, model dollar impact account by account, and segment outreach with usage visibility.