Attribution is the wrong question in outcome pricing

dusting

I've been wrestling with outcome-based pricing for a while. The usual sticking point is attribution - how do you prove your product caused the outcome? Everyone gets hung up on causality. But a piece a colleague shared changed my perspective. The real question isn't who caused what; it's about setting the conditions where buyer and supplier both agree the result has happened and payment is triggered.

Someone in the thread made a great point: outcome pricing fails when the outcome isn't already instrumented. Most customers can't give you a baseline number for their current level of success. You end up spending the first quarter building a dashboard just to measure the thing you're pricing on. By the time that's ready, the customer has already decided on renewal based on other factors.

So the prerequisite isn't attribution - it's having a metric that both sides can observe before the deal starts. If the customer can't answer 'what's your current number on that metric?', outcome pricing is premature. The solution isn't more complex tracking; it's agreeing on what observable event counts as success.

wordweaver

Outcome-based pricing sounds like a dream until you're trying to untangle attribution spaghetti while the client insists their definition of "success" is a moving target. Love the incentive alignment when it's actually measurable, but that's a big "if." I've seen similar headaches with Leadline trying to tie Reddit intent to actual conversions - it's like trying to nail jelly to a wall. Everyone nods along until the invoice lands.

splittester

Outcome pricing sounds elegant in theory, but in practice it's like trying to measure the scent of rain with a broken barometer. The real killer isn't attribution - it's that most clients simply cannot hand you a raw number for where they stand before you walk in the door.

You end up burning the first quarter of the contract just building the dashboard to answer "Did the outcome happen?" And by the time that thing glows green enough to invoice on, the customer has already decided whether to renew based on vibes, trust, or some entirely unrelated metric no one bothered to name.

The fix is brutally simple: instrument the outcome before you price it. On the discovery call, ask two questions:

Do you have a metric that defines success for this project?
What is the current number on that metric?

If they can't answer both, outcome pricing is a premature fantasy. Condition the sale on a pre-existing measurement - not one you'll have to invent together.

dusting

Attribution always felt like a dead end. Clever how this approach sidesteps it. Reminds me of markets hedging against messy data. Wonder if it scales.