Reforge · Product & Work
TIER 4 Thu, 02 Oct 2025 17:15:04 +0000
When to charge, what to charge for, and how to scale pricing.͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ ͏ | | | --- | | **FRESH INSIGHT **BRIAN BALFOUR --- **Pricing is just the start. Here's how to monetize an AI product.** --- To price a product or feature, you need to step back and think more holistically about monetization. Price is the amount you charge, but monetization is a puzzle with four interlocking pieces. Get all four right, and you create sustainable revenue growth that scales with your product's value. The four components of monetization are: 1. **Scale:** How does your price change as customers use it more? 2. **What:** Which features, capabilities, or attributes do you charge for? 3. **Amount:** How much money do you charge for each tier? 4. **When:** At what point in the customer journey do you ask for payment? In this post, we'll walk through each part and use examples to illustrate how to analyze your own monetization strategy. --- Read more --- | | **FRESH INSIGHT **BRIAN BALFOUR --- **Pricing is just the start. Here's how to monetize an AI product.** --- To price a product or feature, you need to step back and think more holistically about monetization. Price is the amount you charge, but monetization is a puzzle with four interlocking pieces. Get all four right, and you create sustainable revenue growth that scales with your product's value. The four components of monetization are: 1. **Scale:** How does your price change as customers use it more? 2. **What:** Which features, capabilities, or attributes do you charge for?** 3. **Amount:** How much money do you charge for each tier?** 4. **When:** At what point in the customer journey do you ask for payment?** In this post, we'll walk through each part and use examples to illustrate how to analyze your own monetization strategy. --- Read more --- | | _This article is excerpted from our new AI Growth course and was created in partnership with Notion product leaderLauryn Motamedi. Reforge’s Fall Cohort of AI courses starts October 14th and includes guests from OpenAI, Canva, GitLab, Descript, Laurel and many more. Enroll now to secure a spot._ _AI Growth | AI Leadership | AI Strategy | AI Foundations | AI Productivity_ --- | | | --- In late 2024, Canva announced a price increase that was a perfect lesson in the difficulty of monetizing AI products. The company was steadily marching upmarket and had added an enterprise plan as well as an enterprise sales motion. It was trying to preserve the PLG ethos of the product while rolling out plans that would be priced and sold differently. It was rapidly adding an entire menu of AI features into its suite of products. And because users were eager to test AI features, Canva had to include some free usage even though LLM costs were starting to strain its freemium unit economics. Monetization was getting complex. Canva found itself in a position that a lot of companies are dealing with right now, albeit at a larger scale than most. The product was evolving, the customer base was growing and changing, and the old “gym membership” pricing was clearly not working any longer. But customers were frustrated by the price change, despite the clear value of the new AI tools, which were the primary driver of the change. --- --- AI changes monetization in a few very important ways. One is that the pricing _floor_ is higher because of the new costs to use LLM APIs. The more challenging part is the _ceiling_ , which is determined by perceived value and competitive pressure. For the most part, AI features are too new for companies to have found a consensus on perceived value. As many SaaS companies roll out AI features, they’ll have to run through not just a pricing assessment, but a monetization assessment. Every monetization model breaks down into four fundamental components, each of which is essential to get right. --- | | In this post, we'll provide a framework to help you analyze your own monetization strategy, with a focus on how AI is changing costs and perceived value. --- Read more --- | | Do you know someone who might find this insight useful? Forward this email to them! Did someone forward this email to you? Sign up for future insight drops here --- | | --- | --- | | | | | ---|---|--- Copyright © 2025 ReforgeUnsubscribe from blog emails | Unsubscribe from all emails Privacy Policy | Terms of Service ---