Voice AI Pricing Strategies · Brendan's AI Community

Tobi Browne-Marke

Sep '24 • General discussion 💬

Voice AI Pricing Strategies

This is a post I saw in another community. It may help one or two people here. Here it goes:

A common question is, "How do I price my Voice AI services?"

There are a few different strategies you can use for this. The most common one is Cost-Plus Pricing:

Cost-Plus Pricing:

Here’s the basic math:

Cost per minute * 60 = cost per hour
Example: VAPI @ $0.16/minute * 60 = $9.60/hour cost

If we’re selling a 10-hour/month plan, our cost is:

COST: $9.60/hour * 10 hours = $96.00 per 10 hours per month

Then we add our markup. A typical human call center can charge $1.00/minute or more, so the cost of 10 hours of a human call center service would be:

HUMAN COST: $1/min * 600 minutes (10 hours) = $600 per month for a human call center.

So, we could apply a 400% markup and still be cheaper. A 400% markup means the selling price is 4 times the cost. For every $0.16 in cost, the selling price would be $0.96, resulting in an $0.80 profit. ($0.96 price - $0.16 cost = $0.80 profit).

OUR PRICE: $96/mo cost * 400% markup = $384 per month Customer Price.

Now let’s add some pricing psychology. Let’s round it up to $400, then use the "ends with a 7" trick to make it $397/mo, so it "looks" less than $400.

So, we have a monthly price of $397, which costs us $96, resulting in a profit of $301 per month per client.

PACKAGING YOUR PRICING:

Now that you have your cost and price, let’s package it up. You could structure this in a few different ways for a customer contract:

1) Monthly Fee with Maximum-Minutes Cap

Offer something like: "Our Starter service costs $397/month and includes up to 600 minutes (10 hours) of inbound calls per month. Any minutes above 600 are billed in 60-minute (1-hour) blocks at $60/hr."

Benefit: If the customer uses more than 10 hours, you’re covered and make more money. But if they use under 10 hours, everything they don’t use is pure profit for you.

2) Value-Based Pricing

If you can establish the value your service brings to the client, you can price it based on that. For example, if your inbound sales solution generates an additional $10,000 per month of profit for the company, it’s a no-brainer for them to pay you $1,000 per month for it.

To establish the value of your service, consider factors like increased revenue, cost savings, or improved efficiency for the client. Conducting a cost-benefit analysis or gathering case studies can help in quantifying this value.

You can add the monthly-minute caps and extra charges to cover your costs, but most likely, you’ll make more money than with Cost-Plus Pricing. The key is establishing the business value of the service to the client and then charging them a price they’d feel foolish saying no to.

3) Usage-Based Cost-Plus Pricing

This is usually the lowest profit way to price, so I recommend against it, though it may be easier when you’re first starting out and working on getting your product out the door (which is what we’re doing currently with Testbot, as it’s the simplest to implement in our MVP). This is where you charge a simple per-minute rate based purely on usage.

Example: If the user uses 100 minutes and you charge $0.97/minute, they’d pay $97.00.

This results in a profit of $0.97 price - $0.16 cost = $0.81 profit per minute billed.

Downside: You don’t make any extra profit if they don’t use as much as expected, and your cash flow can be much more variable than having a base monthly price with the chance of extra bonus payments for heavy usage.

Conclusion

There are many other pricing strategies out there, but I’ve found these to be the most common and simplest to work with. Hopefully, this helps!

Cheers,

Brian

0 comments