Brad Birnbaum of Kustomer: AI Will Lead the Move from Seat-Based to Conversation-Based Pricing

Recently I had an interesting conversation with Brad Birnbaum, CEO and founder of Kustomer, about the re-emergence of the company as an independent customer service platform after being spun out of Meta, which acquired it in the midst of the pandemic.  One of the areas we discussed was the impact could agentic AI have on traditional seat-pricing models.  

In the clip below Brinbaum says that traditional industry pricing models actually work against customers as more AI gets integrated into platforms and absorbs more of the workload from humans. Ttraditional pricing even penalizes companies looking to transform the way they provide services and experiences to their customers, he says. That's why Kustomer is taking a different approach with a conversation-based pricing model, allowing customers use more of its platform's capabilities as they continue building more AI into it.

Edited transcript

Brad Birnbaum: The world is going through a revolution, switching from humans providing support to a combination of humans and machines. We're seeing the amazing things that agents can do to help handle and deflect some of the inbound inquiries. And we're going to see that becoming better and better over time.

The industry has switched to a hybrid-type pricing. You still pay the old-school way of the seat pricing. On top of the seat pricing, you're now paying for resolution-based pricing. So with an AI agent or chat bot assistant, they'll charge you on that, on top of the seat price.

That's actually exponentially more if you start adding it up. And the argument is “we're saving you a lot on the human cost”. So, it's OK to charge you a lot more on those resolutions? And then you are saving a lot of money as a business? And you are probably providing a better experience for customers creating those responses instantaneously and allowing agents to focus on the harder things instead of the simpler things?

As Kustomer was rethinking how we could be a part of this revolution, this transformation, we want to partner with companies as they do it. As AI starts absorbing more and more of the work, which is inevitable, I think we all agree that we're seeing it happen. We want to get pricing that enables that transformation, that doesn't cost you more as you go, right?

Fortunately, we've been around for nine years. We've got a great customer base. We have a lot of data to understand. We understand their buying patterns, their usage patterns, the amount of data they have, the amount of AI that they're using with us. We spent six months studying the market, studying our customer base, interviewing our customers. They inevitably told us that they hate paying for seats.

Managing to seats is really hard. They want something that is more friendly and flexible. And the whole new way of thinking is we want to partner with you. We're going to charge you for a conversation, whether there's a resolution through AI or not. But it's all you're going to pay. Unlimited seats. And we are now fully aligned with the customer, with our customers.

We partner with them as they're using more AI. We're not specifically charging an overage for AI. And as more AI weaves into our platform, as we have more AI, we call AI for reps, AI for supervisors, AI for the reporting. Like as we do more and more, we're not going to actually charge you more. That is inclusive in our platform fees. And that is truly transformative.