Predicting Revenue in Usage-based Pricing
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I happily accept some of the risks of a consumption based model because I think that the benefits far exceed the cost. These providers need to be held accountable to continuously delivering value. IT is not okay to simply cea deal, walk away for eleven months and then one month before the renewal is set to go, then you reengaged and say, how was the last seven months? If we would have just asked that question, they would have told. But instead, we put IT down on our chart as a trend that would endure for the next ginger, and we call the iron. And that's a mistake.

I think actually, what you're going to see is more hybrid pricing models that involves also .

telling them protectively how to spend the less on your company by implementing some best practices that will reduce their consumption. There is no shortcut to creating long term successful businesses.

Pricing is hard, which is why so many companies have defaulted to standard pricing models like subscription and but come to no surprise because predictable revenue is the linchpin of any companies planning, execution and ultimately valuation. But IT also happens to be one of the most difficult things to nail about implementing another pricing model, that is usage based pricing, which is what we're here to talk about today because once you've establish their right processes, organ compensation structures and tax tax to Operationalize IT, your revenue can actually become more predictable with usage space pricing that I might be with traditional over time.

So today hear from a extensive growth partner, mark regan, as he sits down with travel's furber PPR strategy five train and then borrow head of sales and alchemy, who both have implemented and embraced, you guess, IT usage based pricing. So today they share a guidance on best practices, the very real ups and downs of usage based pricing, key magic to hone in on both short term and long term planning. And ultimately, why is so important to orange your business around the value that the customer is getting the first way? So here is mark, then travis, than dam.

oh. And for more content just like this, on usage based pricing, make sure to check out a six tee y com slash pricing dash packaging, enjoy. As a reminder, the content here is for informational purposes only, should not be taken as legal, business, tax or investment advice or be used to evaluate any investment or security, and is not directed at any investors or potential industry in any asic sense y fund. Please note that asic ne and ezoe illiac may also maintain investments in the companies is discussed in this podcast. For more details, including a link to our investments, please see a exit a com slack disposals.

What i'd love to hear from you guys first is your perspective on why usage based pricing has become so popular in the industry and why is the working so well at each of the respective companies?

I think IT comes down to you. Uh, based pricing allows customers to pay for what they use. IT helps tie value directly to the product and from a customer.

Same point is also is waiting help customers come in and experience your product without making a big into that. So to really helpful and landing customers and brand, bringing the men. And I think over time with that, you can build stronger relationships with those customers and you can see that growth or time.

There may be one other thing i'll add to that, which is usage based pricing forces you as a company, think about the customer all the time. Every part of the organza has to be thinking about the customer. And in a bookings model where you come in, in a get on a subscription, the sales questions like great did my job.

I'll see you in ten months where we're going ready to start talking about that. And your engineering team is somewhat tied to them. But you don't get the immediately feedback with the you don't get the mediately.

Are they being successful? How they adopted the product in the way that you said? And with usage by present, you can see that you get the telephone da, you get the information right away and you can focus the entire organza. But to make sure that those customers are successful. And I think the founder or an individual who wants to go the company that drives great value with customers and great relationships with that, you should base pricing is a good mechanism for aligning all the organization around the success of the customer because the revenue is directly tied to the success of that customer.

I think you nail that. I've been in silicon valley venture back companies for twelve this years now. And what's really interesting when I think about this question is that I think back to my very first sales training ever out of college, where I had not yet moved to silicon an valley.

I was in a fortune one hundred company, and I was given sort of conventional sales training. In that training, I was taught how to gate information and access to information about our products and services behind all this process that we were supposed to put these prospects and potential customers through. And instantly, that never SAT right with me, that never felt like a reasonable trade.

I felt like we should be freely giving more access to information. And I moved to silicon valley, and I loved the updated philosophy that I saw at the time. We were all talking about the consumer ization of I T.

Enterprise infrastructure and making sure that the tools that employees want to use inside a company to do great work match the great experience of consumer tools that were on the market that were available for people. And there was this discussion of shadow I. T.

And people bringing in their own technologies from outside that weren't necessarily sanction because these tools are so much Better to use. And the key to that whole motion and what has driven this is the consumer preference. And the consumer in this case, could be the enterprise customer, the enterprise knowledge worker.

They deserve great tools. Not only do they deserve access to information about the tools that they might buy, we've now taken IT and progressed over the last ten years to include consumption of that tool. So as part of this consumption based pricing model, of course, we have different tears and access to different tears for these solutions, including free tears, which the internet has helped democratize, access to information about all these solutions.

And of course, you can actually go use them, which I think is a huge benefit for customers and I think is the right expectation for the industry to have. It's gonna ensure that companies are able to find the right tool to meet their business cases and their actual needs. So I love that we've done that.

Now I maybe cheating ahead a little bit on additional questions, but where I think this naturally goes is if we're giving out all this access to use our tools, who is very generous, free tears, and we're spending money to provide that solution for free, what are we then trading in exchange for those scale customers and lung m relationships and commit mense? And how do we fuse product LED growth with the appropriate level of sales LED growth? And there's actually a ton of exciting stuff in that category where my perspective is you can do that in a really healthy way to manage your companies the resources effectively.

But to go back to the original intent to the question, why does this make sense? Why is this so popular? Why is not going away? Because it's the right thing to do for customers. They know IT deep in their heart that they should be able to use these tools. They should be able to have complete access to information about these tools, and these providers need to be held accountable to continuously delivering value. IT is not okay to simply sell L A deal, walk away for eleven months, and then one month before the renewal is set to go, then you reengaged and say, how was the last eleven months hopefully you're ready to renew and expand. That's not an OK motion and that's not the way to maximize business value for anybody.

I love both your perspective on that and IT almost seems overwhelmingly positive, right? I think we all know living in reality this, especially when you're going through that art as these gross stage companies, there are a ton of chAllenges with this model in practicality, right? And I know you guys have a live through IT, and i'm really interested in what your key observations have been around those chAllenges. And just as importantly, what you've seen in the organization you worked in to try to mitigate this, try to overcome those and to really be able to Operate this model at scale.

Oh, me, there's a lot there. So i'm pack on now. And so yeah a little bit background.

Five friend when I was started, was a booking space business. We had right of connectors. We prize these connectors in different groups.

And congratulations here by your connector. Go for a talk to you in a year. And then we switch to a using space pricing model using something called mothy active rows.

And and that switch, we had an establish sort of sales culture that was this booking space business model that switched over to usage based. And that was a hard switch like making sure that you had all the systems in place and everything also comes on with that. And I think there is a couple of different ways to think about the chAllenges of you pressing.

So one is on the systems and eternal systems and processes to be able to manage that. It's a bigger investment like IT is much easier. Toronto bokkis space business from like a just a planning cop, your internal systems, all of that is way easier, way simpler.

And therefore, you have to make a lot of investments into your Operations teams, into the systems until the data models that you have to run all the telemetry ary data from your product like you have to have that information. You need any information to help drive that. So that's one chAllenge.

The other side of this is that IT does introduce a lot more variability, particularly when you have fewer customers. IT can introduce lot more variability in to your revenue because customers can change their usage and you have less commitment from a customer. You can see customers coming go and move up and down to.

You always have to focus on the value at five time. And we seen a couple of different drivers of that. There are multiple drivers and predictable way. So we try to give a lot of flexibility with customers so that they can match what they need in their value to what the product is offering.

But in doing that flexibility, that can drive a lot of variable ability and what customers actually you're using and other changing that so they can optimize a lot for the each of their business and that can drive some unpredictable in the revenue. And there's this other factor that we see, which is just general macro economic things like just things that happen in the world to as we move data like this stuff that can be sometimes outside of the control the customer, that can have impact their usage. So for example, we see a lot of retail customers or on november, december time frame, huge Spikes in usage because that's when all the posts seems are going, when all the cells are happening.

See if these big Spikes and usage. If you have a diversified customer base, you can sometimes null out those Spikes through broader industry diversification or through understanding and planning for those bikes. You have to have some history and daily history to understand that.

And then the final one is depending on what your product is, so can fight in. The kind of the new thing is we are interacting with other products. So we pulled IT out of what's happening from other users or other applications, and we move that data until those applications make changes and that impacts our product.

So we have hub spot, I think, two years ago, made to change to the A P I. And IT forced a complete rethink for all of our customers, which like huge Spike in the usage across the board for all of our customers that we're using the hub top connection. It's one of things you have to be on top of that all the time.

You have to watching the dinner actions and see on top of the things so you can can protect the customers from from these unnatural spices that can happen. That means like more investment in your product, in your engineering teams. So I think if you want to know like the complications of usage by pressing and going from booking space with simpler to plan, simpler to you, the cells people understand IT, quite Frankly, the procurement people understand IT Better too.

They get like, I know what i'm buying. I know what this is gonna cosplay. I can predict in my budget to a hey, I am not really sure how much i'm going to use.

I'm not really sure what this is going to do for my budget over time. I'm not sure if I have control over that. So a lot of education that .

has to happen well, gravitate. There's something else that I hear in that too, which I feel like our industry sort of losers side of this a little bit in this discussion often, which is the idea that whether I choose to be a booking space business or our usage space business, that somehow is the sole determining factor ist to whether not we're going to be a good company or bad company. Yeah, this is just a strategy.

This is a strategy to unlock growth. I personally think that is a very good strategy to unlock growth. But IT also comes with cost, and we can talk about those and we can talk about mitigations for those.

You should be iced wide open, but there is no shortcut to creating long term successful businesses fundamental at the heart of all of this. And you eluded to this. Travis and I totally agree, your products and services have to deliver immense amounts of value to your customers, plan and simple. And that is regardless of what gross strategy you choose or what sales model you choose to have, the software products are never done being built, absolutely never done being built.

And so consumption, actually, that growth strategy lines are beautifully with that because as long as are continuing to build the software products and you're adding that flexibility, that features said that next generation of innovation, then you're able to command good margins, make customers widely successful, and they're excited to come back and spend more and more and more on that consumption every period because they know they're getting more value than they are paying you. And that's how you build a great business. So I do you think people lose that at that? So you need to be tightly aligned with your product organization and thinking about that product road map because that's gona be a much bigger determining factor.

Now I think part of this question to is, what are some of those costs? We should recognize that in good economic times, a consumption based model can be a big accelerant because there is less friction to customers being able to use more, consume more and therefore, your company getting to make more revenue when they do that. In tougher economic times where you've got percentages of your business in your revenue that is tightly to full consumption, where there are no bookings commitments in place, obviously, that represents a risk and that's gonna also be a less friction place for those businesses who are your customers to save money by pulling back their consumption on your service and lopping off use cases or shutting down one department's use of that solution.

And we've seen that in the last couple of the years. There was a time written about that attention of analysis for me personally, when I think about building a great business, first and foremost, I want that amazing product road map where we are so confident in the value that our solution provides. Second, darling, I happily accept some of the risks of a consumption based model because I think that the benefits far exceed the cost.

Even knowing that there will be tough times ahead and our customers may as a result of the need to save money and extend runway or drive more profitability, they may reduce consumption on us. I'm willing to accept that and deal with that turbulence and do right by our customers in those moments because I actually think those moments, even though they don't feel good because maybe revenue is pulling back on our side. Those are incredible opportunities for us to build long term trust and long term relationships with those customers.

They will remember how we treated them when they needed our help, and that will factor into their decision when times are good again and they're ripping and they're investing in growth. Remember which providers stuck by them, took good care of them and recognize that they were a tough moment. They needed some forgiveness or some help or some actual assistance, saving money with best practices that enabled them to lower consumption of your service. That's a separate big topic of the role of account management and customer success. But hopefully that I dress the question .

and in and I go way back to getting a bit of the Operational nativity of this. I'm trickery interested in your perspective as a sales later when IT comes to forecasting the business ripe and just living in the presence of a quarter or a couple quarter ahead of you, how do you learn to confidently forecasts the business? You're growing quickly, but you have all these chAllenges of just not a heck of a lot of data in the review.

Beer, you know, a perfect signal detection and hitting indicators. So how are you working through that? How do you learn to become confident forecasting?

I really appreciate that question. My answer may surprise you slightly because the key to good forecasting, even in a consumption based business, is a very healthy bookings element. And so the foundation of the relationship with our customers may still be entirely consumption based.

That's how we have the conversation. That's how we meet their usage. That's how we talk about their usage.

That's how we forecast their usage purely in the form of what they're gna consume. And as travel said earlier, they're gonna pay for what they use. That's the objective. Now that being said, I think it's still totally fair and reasonable that my business values predictability, like you just talked about, i've got a job to do, which is to forecast accurately. We all know why those forecasters so important that enables us to make healthy forward looking decisions about the business, how we're going to invest, what teams we need.

There's a time that requires a great forecasting methodology, therefore, because i'm gonna get a bunch of business value from a healthy forecast, I can return value to my customers who are willing to make commitments to us. And that's a super fairy exchange of value. And it's on this beautiful continuing. The more flexibility that my customer requires, the more fair at for them to pay a premium for the consumption that they are gonna use, the more they're willing to commit to me and my team and my company, which enables me to be Better at forecasting, the more i'm happy to return discounts and commercial incentives to them, and we will execute that on the bookings contract. So this is part of the motion that you want to breed in the sales team, which is that you're continuously selling, you're continuously taking care of them, you're continuously monitoring their use case, you're continuously forecasting with all of your customers.

IT is expected in any organization that i'm run in that if you're taking care of a customer, you are continuously not only monitoring their use case in the telemetry that travels was talking about, which is very important that you give yourselves team and your customer success team the monitoring capabilities to understand in very granular detail how their customers are consuming products among growth parameter perspective. But you also expect that those folks are deeply understanding the dynamics within the customer business. What is causing that growth is not enough to just know what the growth rate is.

I want my team to explain to me why that growth rate is. Is that because they're aggressively expanding into a new market? Is that because they just acquire another company and now we've combine two teams uses, we actually have to know why, because that is the key to good forecasting.

I can't tell you the number of times that i've seen this issue of massively over forecasting a given customers usage because the team didn't understand that the behavior that customer was engaging in was a one time thing. IT was only ever gonna last for one quarter. And if we would have just asked that question, they would have told us.

But instead, we put IT down on our chart as a trend that would endure for the next year, and we call that A R R, and that's a mistake. So there's a whole lot I could probably gone on for another hour about what drives good forecasting. It's a combination of instilling in your team great discovery still, Scott, and an expectation that they're doing ongoing discovery to always know the business drivers behind the usage trends.

You can't just know the trends. It's arming them with great telemetry, ary tools, monitoring the eye solutions to track IT at a very granular level so they can get specific and IT is offering your customers fair contracts and discounts in exchange for commitments which are really valuable for your business because you value the ability to forecast. You value certainty and you're happy, in my opinion, to give discounts to customers who can sign up for that level of commitment of minimum amount of conception.

The point of our bookings is spot on. We have a couple different components to our business. We have this great big self service group of customers that come in use. The product never touched sales person IT just go there like page you go.

But then there's the other portion of the business which makes commitments to, hey, I want to buy up front this much for the year and exchange that we built in discounts as you use more or we ve discuss IT come in in play for that and that bookings helps drive predictable order for a portion of the business. And forecasting for like how are we doing so when we think about long term planning, I think so like is famous for their R P O remaining performance obligation. Like how much of people book, how much we got to, how much is left.

And that that because the big thing of monitoring, giving that information to the customers to team to help make sure customers are getting what they say they want, they connect to you and the giving you an indication of what is valuable to them and like what their lover are. And you can see, are we getting there? I think the mechanics are actually building the protectively.

What kind of systems you have to have in places do you do that? We've gone through many innovations of this, and this has been an evolution over several years. We have to make major investments in our infrastructure from a analytics standpoint, so virtually move a bunch of data.

So we have fairly large and ladies team, and we've built a predictive model that's okay based on what usage is look like because we ve got this coward of festers ers that haven't make books. So based on their past usage, where are they going on account level basis? When did they join us to what kind of usage curve are they on based on historical data that we look Better?

So like, okay, cool, that are about this size in this region, they perform on this kind of growth curve to. You have enough customers, those averages will work out. And you can see that as we apply those curves to these customers that come in and so you lay er those cowards together, that gives you a predictability about what's kind of going on from a revenue and point.

And that's a it's all look, the data science side and you can take into account what plant here are they about five or six different plant years? What's their discount for each india al custom? You have to layer all that stuff in so that you can build a more accurate view of their performance over time.

And then taking to account historical term rates, turn for us. Isn't a customer left us? Turn for us can be here.

I turned off the use case, so i've reduce that thing. So you want to look and take at that to account. That's our data science model. But the data science model only sees historical data.

And to live tary data from customers, they don't have a piece of day and siding about, which is the customer discovery peace cells inside side of this, which is the second part, the cells team has the. Insights on are they going to add another use case? Are they going to turn the table off? They have the insights that the daily team can't have.

They don't know what the customers are going to do because they're not having the conversation with the customers. And so you give the sales team here's the positive revenue for your book for your customers and then the sales team you like, well, actually, I know they're going to add a new use case and it's going to come online in the next two months, and I know that that's going to be worth this amount of money. But that then gives you the insights ts to the modify your data science model.

And that gives a little bit more confidence. And I can tell you in the beginning, your sales team will get a rough like the predictions will be way off. In particularly, our model is the more that you use, the cheaper your usage is.

And therefore, unless you are savant and you can do multivariate calculus in your heads, you have to have these tools in place to do that. And so you run this figures process where data science model comes in, cells, modifies IT based on their knowledge of the customer and what's moving up or down. And they've got the tools unable to predict or to size those different opportunities.

I love everything you went through their travels. What i'm really curious about is how that extends when you need to do annual planning and you're thinking about your longer term investments. Obviously, that still requires you to forecasts revenue going forward.

How has that part late into longer term planning accuracy? Or what else do you need to do in addition to those key concepts to do that? Well.

yeah, the capacity model is a very interesting thing. We have to build and we shifted to more of a demand driven capacity with the model so we can look at his oral demand. What have we've been seeing then? How does that demand translate into dollars for us? And then what ramped to customers go on when they come in to you building like waterfall rams?

The basic outline still is the same though. It's just you have more assumptions that can go into that. We do a three year long term plan, which is as blood for gentle growth rates, like what the look like a road map for a product time point.

It's more about here's what we think rn to get to. It's not a this is the prediction. This is like really honed on the annual plan is much more detail, and that's where we try to hone in.

And we work on these other assumptions because you're assuming things like turn within the product, not just turn of customers. You assume things with like expansion of growth rates over time, how those been going? What have you seen the past? You are not just doing like that in our r sumption. You can't have to look at this cohorts bases reach your customers and how they're going to grow within that year and how big of each of those cords coming into the year are there.

So like you four, two, three of previous year, where did you land? Where are those customers on their growth cohort that helps give you more predictability about like you're early stage revenue and then what your pipeline looks like of like those new customers that can be coming in, in the lin land, coming in q one of you two and then no revenue, they're gona generate few and q three, two, four as he was lucky ford for that. So it's a lot of the same kind of skeleton that you have from the annual planning basis, which is a extra layer of cohorts and the growth of that revenue over time. And where are they until those assumptions that you have to play?

And well, I do you ask you follow up that fundamentally, aren't you just taking all that extra rigor and analysis to Normalize an account executives contribution in the form of a quarterly add to the business total, whether you're mattering that in A R whatever or M R R, you're still just doing all that extra rigour just to Normalize what an incremental head is given to your business so that you can plan essentially in a Normal way?

Yeah, totally. I think of man, we think about IT in terms of like there's kind of two parts to the business. There is this demand driven part of the business, which is customers come in and they don't talk to to sell people.

So the self service portion and that part is not about adding sales people. So you kind of have to look at the demand out of the model of front and on the enterprise side and look at larger organizations where it's actually the cells people are driving demand, creating demand with customers are developing this relationship. That's a little bit more.

We are really cool. I add another sales person, i'm adding more revenue and it's not as constraint. But yes, to your point, rather than you can, yes, you are kind of Normalizing. How much incremental revenue are you driving by each person and you're adding to the organza defending revenue?

So mark, I think what we're saying, what travis are complete element on is that I think a very huge component of this planning exercise that you're talking about is attribution for your revenue. yes. What was the source of that pipeline? Was that customer spending on their own? yes.

Did self serve and how far did they self serve? And then this is actually where I think the most important thing for any organization is to have really great communication and align among the business leaders between sales leadership, Operational leadership, revenue excEllence leadership and, of course, finance. Those parties need to be in complete alignment about a relative value of these diaper buckets and where they come from, and is a dollar of revenue that was self prospected entirely by an account executive.

How does that relate to a dollar of bookings that was converted from somebody who was already spending? And you can even get as fancy and as new as applying modifiers within a complaint, for example, to different kinds of dollars of revenue. But IT all goes back to having some basic systems of attribution to know what that never is coming from, where started out this whole product LED growth motion.

And is another example of how I can accelerate, but how I can add some cost, because now you have this whole new bucket. Remember the first time I heard the acron P Q L IT was probably around twenty six that I heard that for the first time. And prior to that, we'd only ever talked in M Q L.

And it's now this mega function of opportunity for your business if you're driving uh consumption model of got a qualified leads. And so what's the definition of that? What are the expectations for follow up?

What are the expectations for compensation when a seller closes a deal with somebody who was already using lots of good considerations there? The advice I would give is there is no one size fits all location. I've been across three or four different businesses now that have some element of consumption based pricing.

The key to getting that right is actually listen to the needs of your customers and the dynamics of your business. I have seen this changed dramatically. And therefore, the compensation plans that we write is custom based on the competitive pressures that we're feeling, the market dynamics that we're feeling.

Our stage of growth are orientation towards profitability. There just really is no one size fits all like piece of advice here. You've got to respond to what you're seeing, where turn is happening, where growth is happening, what competitive facing. It's got to be the customer every time.

Really good stuff. Guys, I want to hit you with one more question. Looking into your Christal balls. Where's this all going? A lot of new technology out there. You remiss if I at least make quick mention of AI, but know there an array of things out there in addition to the innovations there. But where do you see this model going over the next few years?

Let's break this question into two pieces.

So where is like construct base model going? We've in this construct base model for four years and a lot of the business is around, like how do you try and find the intersection of value with customers? And I for the business and pricing is like this, this mechanism that you can use for that in consulting base model is one that I don't think it's gna go away because IT is so valuable to customer, little lines, everything together.

But it's not the only tool that you have. It's something only pricing tool. And we've heard since we started the consumption this model from a lot of like larger customers, like the Prices, really, we want some more predictable way.

And so I think actually what you're going to see is more hybrid pricing models where you have consumption base till now, our customers to come in and understand the product and some customers will love that. And you'll have, for example, eos enterprise lense agreement that sets like set Price for all you want, that gives more predictability to other customers. And you're going to see some these hybrid d mixes that i'll come around because you've got different types.

Customers are looking for different solutions and different pricing for them. And you want to be responsive to what costers in need and you want to meet them where they are. So let's part one of your question.

Second one about dinner to A I I mean, holik that movie so fast. I talked about dad science models earlier on predicting where customers usage going to go. And I think that general I in particularly the predictive part of that can be quite the viable to us. So I can short cut the long time IT took us to figure out what was driving customers usage and what are the key indicators, how do we know when to intervene with the customer when not intervene or what's an expected action.

In general, I can help drive that part of the business and help keep up smaller companies advances that we didn't have a smaller company we've had to earn over like a long Peter time and like just working at and having who is work in these models and then also just making sure of using generalized to get self teams insights into when they should reach out to customers what's actually happening. They are talk about this. Why are customers doing the things that they are doing, what's happening? And I think that's which generation of I conserve to parse all this data, all this telemetry ary information, tones of data on our customer, tons of data usage.

But not everything is valuable. There's James out there, and you are searching for those games all the time is the diamants in the rough. And I think generally I can help identify, water those James, and then give actions to the cells team so they can go out and have closer relationships with their customer.

It's never going to replace a human, human relationship business, particularly Price, that is a human, human business. And we want to make sure that we maintain tight ties to the people that involved. And so it's not a replacement, is a supplement.

I personally love this, and I agree with everything travis said to. First of all, I think that consumption base users, models and pricing models are here to stay. These are the kinds of solutions that I want to sell and represent as a sales leader, as an employee because I believe it's the writing for the customer and the right alignment of incentives for my employer in the company that I represent to.

So I don't think it's going anywhere. I think that makes way too much sense. I would bucket IT where I think this is going in three different categories.

The first is in the trilling. We talked about that. I know that the companies that are building software to support the sales and marketing stack very focused on modules and advanced tools for users based pricing.

Specifically, we talked about all the chAllenges in that category. I'm looking forward to seeing advancements in the tooling that helps us with the telemetry, that helps us with the the triggers for outrage, that helps us with the measured, the forecasting, all of that. I think there's plenty of room for advancement there.

An AI definitely plays a role. The second, I would say that we're going to continue to need to push hard on the cell's skill set. And I include account managers, account executives, customer success representative, sales engineers, all of that in the sales skill set.

We've joked a couple of times about if only you wanted, just ask that one customer a, what's behind this massive surgeon consumption that you just had? Well, we're talking about the proliferation of this model. We need to recognize that you are not the only person asking that customer what's behind that blip.

And so there is risk of fatigue. These customers, we are asking them to explain themselves and their business drivers to everybody all the time. That means that we need a necessary improvement and evolution in the skill set and how to make sure that the folks on your team that are engaging with your customers are doing so in a way that is continuously adding value.

And that includes showing up with helpful tips, showing up with insights about their usage that they might not have known on their own. That actually involves, I looked at this earlier, but IT involves also telling them protectively how to spend the less on your company by implementing some best practices that we will reduce their consumption. There's a myriad of ways that you can make sure that you're continuously adding value while maintaining a very high touching engagement with those customers.

We need to continue to progress that playbook as an industry, make sure that we're doing right by ourselves and our customers in the process. That's the second category. And then the third, where I hope that all of this culminates is in the product road maps.

And if we've done these other categories, well, if customers are driving consumption towards you because you're the highest devalue solution for them at that exact moment in time, you know that you can continue to earn that right and earn that business by delivering more and more value through great product road map, delivering more value in your products, including more value, competing hard against your competition. So I hope that all this results in fierce product competition so that the best product is always the one that's winning. The one that is offering the most value to customers is the one that they should be going with at all times.

For me, I hear three things Carrying over and over IT is the tight interlock between customer value realization and what they're actually paying for the product. And if you even thinking into the future, what you guys to describe to be, it's really just making that even tighter and more predictable. It's not changing the algorithm. You are still trying to just get to that the same exchange and trying to optimize that.

And then the other thing i'm hearing a lot around is just the significant investment and dedication you have to have around the mastery of the data and the tooling on top of that to just be able to take all of this data, remove the clutters, see the signal and be able to use IT as much as possible to predict the future of the way that your products being used. And that just Carries forward. I'll be great, right, but it's just yet another weight and further tweak that.

And I pictures like what travis sing around. The empowerment for the smaller company is to that who have a lot of chAllenges with this and don't have as much of the ability to invest infrastructure right away. This is empowering for them if they are able to get AI into the fight early on. And then finally came the side of the people, right?

There's a big thing that you guys kept coming back to as well as just giving your customer facing folks the tools and the expertise in enabled to would be really good at this and to be just great partners with customers and to try to understand the way they are going to consume die of the product. I appreciate you guys giving us your valuable time to go through this. I could talk all day about this guys of so much insight. So my sincere thanks for dedicating the time that gave us to you today.

Thank you. So thank you. happy. thanks.

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