“Thanks for the Lecture on Price”

The largest contract Computer Intelligence had ever sold came down to one meeting. I was leading sales and marketing for Ziff-Davis’s research businesses, and on the other side of the table was the president of a large enterprise software company. We gave a long presentation, slide after slide breaking down the pricing. When we finished, he looked at us and said, “Thanks for the lecture on price. Perhaps we can now have a discussion about value.”

We had presented the price as if it were the value. Software companies and services firms still make that mistake every day, and the market has stopped letting them get away with it.

Three in four B2B software companies changed their pricing or packaging in the past year. Most of them changed the model. Almost none of them changed the process that sets the price.

The numbers come from Kyle Poyar’s 2026 State of B2B SaaS and AI Monetization Report, a survey of more than 230 software companies this spring. Hybrid pricing jumped from 25 percent of companies to 37 percent in a single year. Per-seat pricing hangs on mostly at the top of the market: 29 percent of companies above $150 million in ARR still use it. And when the survey asked which pricing model investors would prefer, hybrid was the outright favorite at 35 percent, ahead of outcome-based (26 percent) and usage-based (24 percent). Flat-fee and seat-based barely registered, at 10 percent and 5 percent.

The clearest sign the shift isn’t finished: the single loudest monetization complaint in the survey, especially among flat-fee and seat-based companies, is not enough expansion revenue. That’s exactly the symptom you’d expect when what it costs to deliver the product changed and the price never fully caught up. Even at the earliest stage, when a company has no pricing legacy to unwind, more than a third of companies under $5 million in ARR are still choosing flat fees, a model with no built-in mechanism for expansion revenue at all.

The gap says more about leadership than about software

None of this is really a software story. I've been brought in as CEO five times, most often to turn around a business in decline or to lead a significant transformation, and pricing was one of the first things I examined. Not because it's a marketing question or a finance question. Pricing is the fastest read there is on whether a leadership team understands its unit economics, and whether it has a real process for setting price to value and managing it over time.

A real pricing process has three parts:

* Market analysis: what competitors, substitutes, and the buyer’s other options cost, including the option of doing nothing.

* Financial analysis: what it costs to win and deliver a unit, and what margin that leaves.

* Positioning: what the outcome is worth to the buyer, and how the offer is framed so they can see it. This is where price turns into value.

Most companies run one of the three and call it a process. Cost-plus shops do the financial analysis and stop. Rate-card followers do the market analysis and stop. Positioning, the part that connects price to value, is the one that gets skipped. It’s exactly what that president was asking for.

Three questions tell you whether the process exists at all:

* What was the price set against? Cost, a competitor’s rate card, or what the outcome is actually worth to the buyer.

* What process produced it? All three analyses, run on purpose, with someone accountable for the result, or whichever department had the loudest voice in the room the year it was decided.

* How is it monitored? A number someone checks every month against current delivery data, or a number everyone quotes from memory that nobody has verified since the day it was picked.

A leadership team that can’t answer all three in one plain sentence each is running a guess it stopped checking a long time ago.

The bigger mistake is usually what you’re pricing, not the price

When I came in as CEO, the pattern I found most often had little to do with the rate. It was the menu. Products were priced à la carte, line by line, when the customer was trying to buy an integrated solution that worked like a recipe. We were selling ingredients to people who came for dinner.

At Thomasnet.com, moving from à la carte to solution pricing lifted our average sale by 40 percent, and the integrated programs performed better for customers than the same products bought one at a time. At Pipeline360, we built a Branded Demand solution that combined programmatic display and data-driven demand generation under one price. Campaign performance improved by more than 35 percent on average, and average order size and customer retention both went up with it.

Neither move was a discount or a price increase. Both decisions weighed unit economics and customer value together: what each sale earned us, and what the customer was actually buying. That's the question the software survey never asks. It tracks how companies charge. It doesn't track whether they're charging for the thing the buyer came for.

À la carte pricing almost always lands in the bottom half of the map below. Every line item gets priced against its own cost, and nobody prices the value of the combination.

Download the Price-to-Value Map and plot your own business on it. Be honest about the vertical axis: it’s the line between a lecture on price and a discussion about value. Most teams that think they price to outcome are pricing to last year’s rate card.

Most companies are hiding in one of two quadrants

Flying Blind is the default position for any company that inherited its pricing instead of designing it: no process behind the number, no one checking it, a rate everyone repeats because no one has ever been asked to defend it.

Cost-Plus Discipline looks like the safer place to be. There is a process, and someone reviews the number on a schedule. But if that process is only the financial analysis, running the price against cost instead of what the buyer actually gets, the discipline is rigorously protecting the wrong number.

That quadrant is more crowded than it looks. When the same survey asked what drove pricing on new AI capabilities, the most common answer, at 54 percent, was internal costs and margins. Even the newest thing these companies sell got priced against what it costs to deliver, not what it’s worth.

Value Left on the Table shows up wherever good instinct meets no process: someone in the room already senses the outcome is worth more than the invoice says, but there’s no positioning work or pricing policy to charge for it consistently, so it varies deal to deal and disappears into discounting.

Priced to Value is the only quadrant where the answer to all three diagnostic questions is a current, verified number instead of a guess repeated until it sounded like a fact.

The map covers the first two questions. The third decides whether you stay where you land. A price nobody rechecks drifts back toward Flying Blind, whatever quadrant it started in.

Each quadrant has one move out of it:

* Flying Blind: put a process in place, starting with the financial analysis, so you know what a unit costs to win and deliver before anyone debates what it should earn.

* Cost-Plus Discipline: keep the financial rigor and add the other two parts: the market analysis and the positioning work that turns price into value.

* Value Left on the Table: turn the instinct into a process. Do the positioning work, write the pricing policy, and stop letting each deal renegotiate it.

* Priced to Value: put the number on a monthly review against current delivery data. That’s what keeps it there.

B2B marketing has less excuse than software does for missing this

Agencies and consultancies carry a version of this cost that almost never gets allocated to the deal that required it: discovery calls, a strategy deck built before the contract exists, a campaign concept pitched on spec to win the account. That’s a real cost of winning the business, and most agencies book it as overhead instead of against the account it won. So gross margin can be right in total and wrong for every individual account, and leadership ends up pricing off a number that was never true at the unit level.

And every one of those hours just got cheaper to produce, with agentic AI drafting the first pass of the research, the deck, or the campaign brief. A marketing services business that hasn't repriced against that changed cost is making the same mistake software companies are only now getting measured on, just with a campaign plan instead of a product roadmap.

I built Uphoff Advisory on the bet I laid out in Solo Scale: The New Business Model AI Just Made Possible, that a services business can run priced and structured like a software company. The test above isn’t one I’m suggesting to readers from the sidelines. It’s the one I run against my own business.

The model matters less than the number underneath it

Every business should be checking two numbers every month, side by side. What a unit of whatever it sells earns once every cost of winning and delivering it is counted, not just the ones that show up on an invoice. And what that same unit is worth to the customer who buys it. Per seat, per hour, per project, per outcome, the unit changes. The process that keeps those two numbers in the same conversation doesn’t: market, financials, and positioning, run on a schedule, with someone accountable for the result.

The investors funding your category have already worked out which pricing models reward value. Your buyers are next. Sooner or later, someone across the table will thank you for the lecture on price and ask to talk about value. Have that discussion before they ask, or a competitor will have it with them first.

The views expressed in Uphoff on Media are entirely my own. They don’t represent the opinions of any company I’ve led, any board I’ve sat on, or any investor who’s had the pleasure of debating strategy with me over the years. If something I write here sounds brilliant, I’ll take full credit. If it turns out to be wrong, I was clearly misquoted by myself.

“Uphoff on Media” is published by Tony Uphoff, Founder and Managing Partner of Uphoff Advisory a strategic advisory practice for founders, CEOs, and investors in B2B information, marketing, and technology. The businesses that drive business.