Whoever figures out how to switch from seat-based pricing to usage-based pricing will win the sales tech race

The one area of the sales tech race that no one is talking about

Howdy!

Thanks for hopping aboard this ship as we head west to discover the new frontiers of using technology to scale modern gtm. My goal is to help separate the signal from the noise as we explore together.

Along these unchartered waters, we will hit unpredictable weather, unknown obstacles, and (probably) some pirates.

But, I believe there will be a treasure at the end of this treacherous journey that will make it well worth the struggle.

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Let’s get into today’s topic.

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Whoever figures out how to switch from seat-based pricing to usage-based pricing will win the sales tech race

I think the winner in the sales tech race will be the company that figures out how to break away from seat-based pricing and cracks usage-based pricing.

Let me explain why.

Today, there are millions of sales reps (SDRs, AEs, CSMs/AMs).

My prediction: this number will shrink over the next few years (let’s say, five years). Fewer reps, but more productive reps.

Especially SDRs.
Why?
Because I think Gen AI will have the biggest impact on the prospecting workflow in the short term.

Here’s a quote from Mike Marg’s article, Generative AI will not kill the sales profession...at least not anytime soon

In order to replace sellers with AI, each step of the process must be able to substitute AI for the human without losing efficacy.

Gen AI will be most impactful at the top-of-funnel (prospecting) — or, in this image, the bottom part. See?

Shrinking number of reps = shrinking deal sizes

Companies will still have to generate pipeline (SDRs) + close revenue (AEs) + retain/upsell customers (CSM/AMs).

How will companies still hit their revenue targets with fewer reps?

My thinking is simple: there will be new tooling/infrastructure that will help companies generate more revenue with fewer people.

But these tools can't be seat-based, or else their NDR will organically shrink (this is no bueno if you’re a sales technology).

Instead, these tools need to figure out how to capture the value they're driving.

Here's a hypothetical example...

Today:
a) ACME corp has 10 SDRs
b) They send a total of 33K emails a month
c) That generates a total of 150 meetings a month (15 meetings/rep/month)

In 2026:
a) ACME corp has 2 SDRs
b) They send a total of 11K emails a month
c) That generates a total of 450 meetings a month (225 meetings/rep/month)

A few observations in this (theoretical) example:
a) 80% fewer SDRs
b) Significantly fewer overall emails but more emails per rep (higher efficiency due to “signal-based prospecting”)
c) An overall increase in meetings set and the per rep meetings set is 15x higher (!!)

With the current pricing model of most sales technologies, the contract size, in this example, would shrink 80% (from 10 seats, down to 2).

Yikes.

But with a true usage-based pricing model (even outside of email credits), the contract size of ACME corp should *increase* based on their usage and/or outcomes.

This makes logical sense because the tool is enabling this company to effectively 15X their output.

Whoever figures out how to truly capture *outcomes* instead of seats will win big in the new era of Gen AI tooling that will power these "10X Reps."

One of the “Big 6” will likely crack this over the next few years.

PS - The operators of a system like the example above probably will look more like a "Growth" person than a traditional SDR. The lines are blurring. I think SDRs, RevOps, and Growth Marketing are best suited to figure out this new role and power pipeline generation in the future.

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Other links worth exploring

(This is a new section — hit ‘reply’ and let me know if you think I should keep including it in future posts)

• Jeff Bezos: Amazon and Blue Origin | Lex Fridman Podcast #405. One of my favorite snippets was Jeff talking about meeting culture (about 1 hour 40 mins in) - “I like a crisp document, and a messy meeting.”

• Guillaume Cabane: Why Your First Growth Hire Should Be a Former Founder | E1088. “G” is at the very bleeding edge of Growth/Outbound, listen to him if you want some of the alpha in the space.

• Elena’s latest post is a banger. My favorite part is the advice to do “Do Profiling in Onboarding (for increased activation & engagement).” Read the full post here:

  My favorite go-to growth tactics.

• Meme of the week, by the legend, Kyle Williams:

  

  LinkedIn Post

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See y’all next time,
B