If you’re still on a per-seat contract, it’s time to find a new CCaaS vendor
Back in the day, it was common to buy services that lacked a transparent pricing model. But think about the way we used to pay for certain everyday services–and how in today’s world those pricing models now make zero sense and have become extinct:
Long Distance Phone Calls: Remember when it seemingly cost an arm-and-a-leg to call someone who lived across the country? My Grandma lived in Northern California for many years, and when we called from our home on the East Coast my Dad would stand near us with a stopwatch, sweating each minute. It was annoying, but it made sense at the time.
Per-Minute Access: If you’re not old enough to remember long distance, then you might remember when you were charged for every minute you used your cell phone, or were online. Concepts like rollover minutes or buying hour-blocks seem so archaic now, even though they were well accepted in our not-too-distant past.
Pay-Per-View Movies: When HBO started in 1972, it was called “Home Box Office.” If your family was the first in the neighborhood to have it, you could draw a crowd to your living room. But now, HBO is largely a streaming service like Netflix and just about everybody has access. In just the last decade, overall PPV revenue has decreased 75%.
Pricing and usage models evolve over time to reflect changes in how we live, and how we derive value from the companies we choose to do business with. That’s why the following makes no sense in today’s world: 80-85% of all CCaaS (Contact Center as a Service) vendor contracts are still being sold on a per-seat cost
Why Per-Seat Models Are A Scam
It doesn’t cost any more for a phone company to connect you to someone 1,000 miles away compared to 10 miles away. Once the network is constructed, those distances are immaterial. When you as a customer are being charged more, you’re essentially paying for nothing.
Similarly for software companies, it doesn’t cost them any more to allow access to 1,000 people than it does for 10 people. Once a platform is created, the number of users is moot. (Sure, there are ancillary costs for onboarding and continuing support, but your company is probably paying extra for those anyway). That’s why per-seat contracts are inherently counter to a transparent pricing model.
3 Reasons Per-Seat Pricing Is Hurting Your Organization (Beyond Cost)
- It impedes growth
Putting limits on seats, minutes and AI tokens forces companies to make tough choices about adding new employees. That’s no way to think. You should be excited to grow your team. The value in growth comes from scaling your operation, not scaling back.
- It’s an obstacle to budgeting
When you can’t be sure exactly how much you’re paying, you can’t accurately project yearly expenditures. That’s a massive distraction when you’re trying to focus on building your customer base, growing AUM and revenue through customer loyalty and lifetime value. It’s harder to trumpet the importance of a great customer experience to your team when you’re (privately) focused on not blowing the budget.
- It’s a mismatch of priorities
Per-seat vendors have no interest in helping your organization become more efficient. Quite the opposite. Their revenue growth only comes as a result of your added spend.
Any time your interests are counter to the interests of the companies you’re partnering with, that’s bad news.
Here’s an excerpt from a recent Forbes piece titled Customer Service is Changing: What You Need to Know About Pricing:
One major issue of traditional seat-based pricing is that it doesn’t reflect actual usage. Many businesses find that their customer service teams fluctuate in size based on seasonality or shifts in demand. With seat-based pricing, these companies end up paying for more seats than they need most of the year, leading to inefficiency and inflated costs.
When you think about it that way, you ought to be concerned. Maybe even steamed. Sure, per-seat pricing made sense when it was first introduced in the early 2010s as cloud-based contact center solutions became more prevalent. But now it’s starting to feel like you’re getting duped. Best to avoid mentioning that at your next annual performance review.
Find a Transparent Pricing Model: 3 Questions to Ask Your CCaaS Vendor
As you move forward with your planning for the second half of this decade, here are some tough questions you should be asking (out loud) when considering who to do business with:
- Does the vendor charge you more as you grow your operation?
- Does the vendor charge extra for storage of transcripts, recordings, etc.?
- Does the vendor upcharge you if you exceed a certain minute usage per month?
If the answer to any of the above is “yes,” then ask them this: “How much of these extras WE’RE paying for actually cost YOU any additional money to provide?”
If the (honest) answer is, “Well, none of it. But that’s how we grow, by charging you more for stuff we’ve already paid for” then it’s time to move past legacy CCaaS vendors and their outmoded pricing models.
At Glia, we believe it’s time to consider doing something different. Hang up on CCaaS, the future is calling.
