Consumers Are Willing to Pay for the Right AI Plan
In the past few years, tech companies have spent trillions of dollars developing AI. Consumers have been much less willing to spend money on AI plans though.
In collaboration with ND Research, we designed a study to help AI companies determine what plans consumers would be willing to pay for.
The Quick Insight: Our choice-based conjoint research reveals that 63% of consumers are open to paid AI subscriptions, switching between paid and free tiers depending on the features offered. Demand for paid plans exists, but capturing it requires precise product packaging and pricing optimization.
Choice-based conjoint survey with 314 U.S. consumers
Empirical Intelligence and ND Research recently ran a choice-based conjoint survey with 314 U.S. consumers to understand what drives people to choose between AI plans. Respondents went through 12 choice tasks in which they were asked to choose between three plans with varying features. They could also select no plan. We specified that the plans were for personal use and that respondents would pay for them themselves.
The simulated plans varied across seven core attributes:
- Price: Free, $10/month, $20/month, or $30/month
- Output Type: text only; text and image; text, image, and video
- Agent mode: no autonomous actions, executes tasks automatically
- Usage limits: 50 messages/day, 250 messages/day, unlimited messages
- Ads: no ads, ads that are not personalized based on chat history, personalized ads based on chat history
- Memory: no memory, 14 days of history, 60 days of history
- Military use: AI company works with the military, AI company does not work with the military
Most consumers are willing to pay when they see a plan with the right features
The findings show that consumers are not necessarily opposed to paying for AI plans.
- 66% of respondents selected a paid plan at least once
- 63% of Respondents selected a paid plan some of the time and a free plan or no plan the rest of the time
- 21% of respondents either selected a free plan or no plan (i.e. never selected a paid plan)
- 13% of respondents never selected an AI plan
- Not a single respondent selected a free plan in all 12 tasks
These findings show that a strong majority (63%) of consumers are not opposed to paying for AI. They are highly sensitive to the value proposition. They will pay when they see a bundle of features that meets their needs.
That means that most consumers (63%) are willing to pay for an AI plan when they see one with the features they want. The challenge for AI companies is finding out what those features are.
Optimizing the product mix
The challenge facing AI companies isn’t just building the technology. It’s pricing and packaging it.
Companies need research on consumers’ preferences to find out what plans they want to use and what plans they are willing to pay for. Conjoint analysis can help find out how changes to product features lead to changes in consumers’ decisions.
Click here to learn more about how we use conjoint analysis to optimize products and pricing.