How AI is Breaking Traditional Per-User Pricing Models with Alan Hollander

Alan Hollander, VP of Offer Packaging and Pricing Strategy at Blackbaud, has led pricing initiatives for six years. With nearly three decades in pricing, his impressive career began in 1994 when Tom Nagle hired him after Alan excelled in Nagle's "Strategy and Tactics of Pricing" course. He also held key roles at Ellucian and Simon-Kucher & Partners, bringing deep expertise in large-scale pricing transformations.

In this episode, Alan addresses a major challenge for SaaS companies: how AI disrupts traditional per-user pricing. Drawing on his experience at Blackbaud (serving nonprofits with CRM and financial tools), he explains why AI's efficiency conflicts with seat-based pricing. He and Mark discuss the difficulties of shifting customers to new pricing models, managing multiple approaches, and implementing pricing innovations gradually.

 

Why you have to check out today's podcast:

• Understand why AI is fundamentally incompatible with per-user pricing and what alternatives actually work in practice.
• Learn how to implement pricing model changes without overwhelming your organization's operational capabilities.
• Discover the "crawl, walk, run" approach to pricing transformation that builds momentum through proven results.

 

"Don't go right to the end goal, in the future state, because people are just going to look at you cross-eyed. Start with quick wins, start with test pilots, test the concepts, show the results, quantify the results so you can build momentum in launching new pricing models."

— Alan Hollander

 

Topics Covered:

01:30 — Alan's pricing journey: From Tom Nagle's student to Strategic Pricing Group veteran

02:45 — The AI pricing dilemma: Pricing products with AI vs. using AI for pricing

04:15 — Why AI pricing isn't different: It's still all about jobs-to-be-done and value creation

11:15 — The nonprofit sector challenge: Selling efficiency when budgets are already tight

14:30 — Human augmentation vs. job replacement: Reframing the AI conversation

16:45 — The Salesforce problem: When AI doubles productivity but revenue stays flat

19:20 — Blackbaud's approach: Combining user-based and consumption-based models

21:45 — Market segmentation reality: Financial vs. fundraising as separate buying centers

24:10 — The PayPal model: Why percentage-of-success pricing works for fundraising

26:30 — Optional pricing models: Letting customers choose fixed vs. variable approaches

28:45 — The operational reality check: Systems and processes needed for pricing flexibility

31:00 — The "crawl, walk, run" philosophy: Building momentum through incremental wins

 

Key Takeaways:

"Per user is not going to be the answer. You're going to stagnate because unless you're just going to increase your per user price, it doesn't align with how they consume, how they use, what value they get." — Alan Hollander

"Sometimes you have to do the right things before you do things right... you can have a beautiful strategy in terms of how you monetize and price, and it's very elegant and you've done all the analytics and it looks super cool. But sometimes you actually need to basically what I would say, do a crawl, walk, run." — Alan Hollander

"If you don't lead with the value, I don't care if it's AI, SaaS, it doesn't matter what it is. If you don't lead with the value in a business case... you're not going to get anywhere." — Alan Hollander

 

Resources and People Mentioned:

• Blackbaud: https://www.blackbaud.com/ 
• Tom Nagle: https://www.linkedin.com/in/thomas-tom-nagle 
• Reed Holden: https://www.linkedin.com/in/reed-holden-913ab69/ 

 

Connect with Alan Hollander:

• LinkedIn: https://www.linkedin.com/in/alan-hollander-753167/ 
• Email: [email protected]
  

 

Connect with Mark Stiving:

• LinkedIn: https://www.linkedin.com/in/stiving/
• Email: [email protected]