Generative Pricing Explained: How AI Will Transform Value Measurement and Proposal Success with Steven Forth

Steven Forth is Ibbaka's Co-Founder, CEO, and Partner. Ibbaka is a strategic pricing advisory firm. He was CEO of LeveragePoint Innovations Inc., a SaaS business.

In this episode, Steven explores the concept of generative pricing, emphasizing how AI can transform pricing strategies through real-time value measurement and dynamic proposal evaluation. He discusses how composable AI applications and generative adversarial networks might drive advancements in pricing and proposal management. Practical advice is also provided on using AI to optimize proposals, including developing effective evaluation rubrics and leveraging AI for better decision-making.

Why you have to check out today's podcast:

• Delves into the concept of generative pricing and how it can revolutionize pricing strategies through real-time value measurement, composability, and AI-driven proposal evaluation.
• Discover actionable advice on using AI to evaluate and improve proposals before submission which includes tips on developing effective rubrics and using AI tools to enhance proposal quality.
• Explore the future of pricing in a world increasingly influenced by AI, including the challenges of scaling costs, measuring value, and managing pricing with AI.

"Build a system that will evaluate your proposals, including your pricing proposals, before you send them out. You can do this using your currently available AI tools."

- Steven Forth

Topics Covered:

01:01 - Introducing the concept of "generative pricing" in the context of generative AI applications

02:17 - Elaborating on the concept of generative pricing by discussing the cost dynamics associated with generative AI applications compared to traditional SaaS applications

04:35 - Discussing the differences in cost between traditional search engines like Google and AI-powered services like Perplexity, highlighting the implications for generative pricing

09:28 - Shift in cost structures and the emerging properties of generative AI applications

13:54 - Configuring solutions that optimize the value delivered to customers continuously

16:02 - The potential for generative AI to enable more accurate and transparent value-based pricing models

18:41 - Explore the concept of generative pricing in the context of proposals and outcome-based pricing

22:10 - The idea of making predictions about the future of pricing, particularly in the context of generative AI, using a website called longbets.com

23:01 - How generative pricing necessitates a rethinking of pricing approaches

24:01 - Generative AI and how it affects cost management and value capture

25:30 - Discussing the implications of generative AI on the value and pricing of applications, particularly focusing on composable AI

28:42 - Steven's best pricing advice and actionable steps for leveraging AI in proposal evaluation and improvement

Key Takeaways:

"Yes, we have to be aware of costs. And the pricing systems are also going to need to be cost-management systems. But what's going to drive the configuration is value optimization." - Steven Forth

"Is generative pricing a clear, fully baked concept today? No, it's not. But I believe that generative AI is going to cause enough change that it's going to force us to rethink how we approach pricing." - Steven Forth

"...possibly as we get more sophisticated and flexible models, we'll be able to more formally manage the relationship between emotional values and also do a better job of pricing in order to reflect externalities." - Steven Forth

"We're going to have to really start designing our proposals and our pricing with the assumption that the consumer or one of the consumers is actually going to be an AI. And I think that also changes how we think about the pricing as well, and we're gonna need AIs in order to generate pricing that other AIs are going to accept." - Steven Forth

People/Resources Mentioned:

• Intercom: https://www.intercom.com
• Perplexity: https://www.perplexity.ai
• Google: https://www.google.com/?client=safari
• Gemini: https://gemini.google.comTheory
• Theory Ventures: https://theory.ventures
• Oracle: https://www.oracle.com
• Microsoft: https://www.microsoft.com/en-ph/
• Totogi: https://totogi.com
• Long Bets: https://longbets.org

Connect with Steven Forth:

• LinkedIn: https://www.linkedin.com/in/stevenforth/
• Email: steven@ibbaka.com

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: mark@impactpricing.com