The Pricing Model of The Future?

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I'm going to take a guess and say 15%. 25%. Oh, wow. As of November 2025. Yeah. So it's interesting because I was sitting on the couch yesterday. I was watching a...

Before I was about to watch the Spurs-Knicks game, but I was watching Patrick by David talking about how consultancies have changed, right, where they used to charge you $5 million, and now, like, the work maybe is, like, $10,000 or so. So, like, a lot of people are customers, past customers or current customers of McKinsey are applying pricing pressure, just saying, hey, yo, like, I know you need to charge us, but, like, this work doesn't take that long anymore, right? And so then he's like, 25% of McKinsey's fees are outcome based. I was like, that doesn't seem right to me.

I googled it, looked it up. As of November 2025, someone from McKinsey, I think had said that. And that's interesting to me because agencies, consultancies are so used to charging on typically time materials and hours, right? So I don't think you're seeing that right now.

I'm not seeing that either. But I can see it on the rise. Like, what are you seeing? Yeah. Yeah, but what do they consider? We have a good chunk that is, or maybe a small chunk.

It's definitely not the majority, but it's enough where we notice that is outcome-based. 5%, 10%? I don't know the percentage. But when I say outcome-based, a lot of the outcome-based deals, and I'm curious how McKinsey structures it, I'm assuming they're covering their base cost.

And then they're having money on top based on the results. Because it would be too tricky to do something where it's purely outcome-based. And if the client doesn't take any action or do anything with the information that you provided and your hands are tied, well, then what? You don't get paid.

So I'm assuming when they're saying it's outcome-based, maybe I'm wrong on this. I don't have any data on what McKinsey's doing. There's two components, cash guaranteed and then cash that's outcome. Let me tell you what my AI overview says.

Okay. So McKinsey has shifted a quarter of its global client fees away from hourly billing to outcome-based pricing, heavily accelerated by their use of generated AI platforms such as Lily and Quantum Black. Everyone has their own platform. Instead of selling billable hours, fees are tied directly to documented business objectives such as cost reduction margins, revenue growth, or AI tool implementations.

Now to Neil's point... The structure is a retainer plus performance multiplier, right? So yes, it's too risky to just say it's all performance. It sounds good.

So McKinsey's typical, it's a hybrid approach. So the base fee is the client pays a reduced base fee, 50 to 70% of standard consulting rates to cover the core costs. Yeah. of digital and human teams now finally the second part is the success pool the remaining fee is variable and directly tied to measurable key performance indicators kpis like customer churn reduction or incremental revenue i'm going to give an example to you and we can talk about this so um let's say that um you know the setup is mckinsey is doing an outcome-based contract a supply chain and procurement and so they can scale fees to save dollars right

So if they deploy Quantum Black, which is their AI agent tool, to analyze historical supplier spending, renegotiate terms, and optimize purchasing, the metric is total hard dollar cost reduction achieved for over a 12 to 24 month period. So let's say, Neil, the reduced base fee is $1 million, a performance bonus of 15% of the first $50 million in identified savings. And then performance bonus of 10% on any savings generated exceeding $50 million. So the engagement yields $80 million.

McKinsey's total billing would be $8.5 million. So base fee plus $7.5 million success fee, which I think is good for both sides. So they make more money. They do make more money.

Yeah. But I do like it. They make more money, but it is tied a little more to, hey, you have to perform. Yes. That is a very hard pill to swallow. What I found is if you perform and you do something performance-based, the moment it's performing and people are paying you a lot more, they don't want to pay and they want to switch and they want to renegotiate.

I've seen it happen almost every single time. You know what the thing is? I would say, Neil, when you look at... obviously when you look at like let's say you know affiliate marketers doing this and they're doing it for maybe smaller businesses the smaller businesses will stiff them right more often than like a big company now that's not saying the big companies won't but big companies generally are hey like they have their finance department they have the legal department they're generally going to be a little more compliant and not try to do that to you and when you centerfield as an example right they do their performance-based marketing they work with all telecom companies and uh i'm sure they've been stiff before but probably just not as much so yes

Yeah. So I think this is good. I think people should try it. And that's like when we sell the single brain stuff right now, they're all pilots. But the way we see it is like whatever the outcome they're trying to achieve after the first 45 to 60 days is like, hey, we actually know their business really well.

We'll say, hey, like, what are you trying to do? Are you trying to get more leads? How much is a lead worth? Oh, how many more do you want? OK, we know how much that's worth to you now.

So then maybe we can charge something that's tied to that in addition to our base fee. Yep. Yep. Let's cover the topic you have here on seven AI marketing trends for 2026.

All right. So I can go, I'll go first on this one. So I believe that we are going to be spending more on hiring great AI-pilled marketers. I was interviewing a guy that was super AI-pilled today.

I was like, you know what? I'm going to be honest with you. A year ago, I thought I'd have to fire more people that weren't technical. And I'm like, no, but I'm talking to you right now.

I'm really enjoying this conversation. We're going to have to hire a lot more people like you just because there isn't enough talent to go around to pilot all these things and to manage all these things. Dude, I totally agree. I actually think hiring is going to boom.

I don't see it going backwards, but I could be wrong. What do I know compared to a lot of other people out there? But I believe we're going to start seeing a boom in hiring.

Another marketing trend that I believe is going to happen in 2026, right now, if you look at what marketers are doing, they've shifted from optimizing for traditional platforms to optimizing for LLMs.

And they're talking about agents, but no one's really optimizing for agents. Yet Cloudflare had a stat that was interesting. I don't know if you ended up seeing it. I have it on the sheet as well.

57% of web hits are now bots. We went over this weeks ago. But it was 51%. Oh, it's gone up 6% more. 6% more just in a short period of time. It's growing at a very rapid rate.

You're not talking about- That's more than 10%. Yeah, and you're talking about billions and billions and billions of visits on a daily basis, right? So that growth is at such a rapid rate. Companies aren't focusing on optimizing for agents yet.

And when most companies think of agents, they think of an agent as, oh, if I'm looking for red shoes, the agent just goes out there and buys it for me. They're not thinking of agents like, oh, if, and Google had an example of this. They did the red dress thing. Yeah, the red dress.

If I have this red dress and I like this red dress and I'm looking for the same dress, but in this blue sweatshirt color that I'm wearing right now, and you can upload both pictures and you say, Google, I'm going to a wedding. I like this red dress. I want it in this blue color. My budget's under $300.

Find me the options. And that's an agent going out there, finding everything for you and figuring out what works and sending it to you so then you can pick and choose which ones. So when I look at agents, it's not just about, hey, help me find these red shoes. It's everything from them helping you be, in essence, your assistant.

Right. Helping you find the right agency to hire or the right service or product for you. And then you are the one who uses your taste to decide what one you want or don't like, or maybe you don't do any transaction at all. But you have to optimize for these agents, because if you're not, they're not going to be showcasing you to prospective customers.

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But yesterday when I was on the couch, I basically had Fable 5 design a new site for me based on the current single brain and single grain website. And I took a prompt from another site and it spit out something really good. It's like we're talking about a site that you typically pay like 50 grand or 100 grand for. I'm not saying that was at that level, but it's there pretty quickly.

You can get there. And so I think we're going to see... we're talking about hiring even more. I think you're going to see even more proliferation of crap on internet, but I think you're going to see even more proliferation of, of really good stuff from a creative standpoint, from a landing page standpoint, but things are just going to be a lot faster because even when we tried to launch, um, these, these, uh, these landing pages for like single brain with, with a chat GPT ads, we would have had to wait forever.

I think it's just good. Now we're talking about maybe it'll just take you like an hour or two instead of having to even wait days now. So now, like a year ago, it was like, okay, you might have to wait a week or two or even a month or two, right? And then now it's like, okay, maybe it's like a day, but now it's like, no, the date is too long.

Now it's like an hour or two. So what'd you have it do? Just combine your single brain and single brain website into one? No, I found a site that gives you prompts for really nice sites.

And then I said, hey, I use Fable 5. And I said, redesign the single brain site. And then ask me some clarifying questions. Do you want to keep this? Do you want to do this?

And then I saw it. I was like, damn, this is pretty good. Oh, that's cool. So anyway, all that to say is I think these model, and by the way, I'll give you a little bonus to that.

Whether you're paying for Fable 5, I think in two, three months or so, you're going to be using an open source version of this. So yeah, you're going to have something really good. Go ahead. Yeah, what are we on?

Number four? Four. Number four, everyone's trying to drive traffic from AI platforms. Very few people are focusing on integrations. You know, I know Shopify has an integration.

I believe Stripe has an integration where people can start doing commerce on these platforms. It hasn't boomed yet, but the keyword here is yet. That can change over time.

We have MCPs, you know, like for Ubersuggest that we ended up plugging into them. That way, when people are using LLMs, they can get the data and access to it directly, which makes life easier for them.

And the big thing here, and this is my number four, is instead of just focusing on driving traffic from these LLMs or using it to help you build a product or a design and all those things are great. Why not integrate directly into them? So then that way, when people are using them, they can also plug you in like your data or the shopping experience or whatever it may be.

So that way you have more ways to generate revenue. Just like Instagram, people on Instagram like buying on Instagram and not having to go to the website, similar to Amazon. By integrating within these LLMs, think of like a marketplace. It just makes it easier for you to generate revenue from them.

And they all have a ton of traffic. So this is just like a prototype, right? This is me sitting on the couch doing it. And you can see the scrolling that's happening right now, built for buyers to find you now, all this stuff.

Like I don't have a lot of these elements. And then obviously if I hand this off to a developer or designer and I spend a little more time on it, it's going to be a lot better, right? And so all that to say is like you can do anything you want now. So my number five is...

So obviously, if we're talking about creating MCPs or APIs for agents to find your stuff and use your stuff in a headless way, you're also going to need a lot more documentation. So you see the technical documentation business, Mitlefy, they just raised like a $500 million valuation, right? Another $50 million. And a lot of people use their stuff.

And even for ClickFlow, like we're creating our own documentation for it. But I just see that if we're talking about the LLMs, like you're talking about ChatGPT, oh, when you search something that is like 30 plus query fan out. So you're going to need more content, more quality content and more useful content still.

And I think we're still going to see a proliferation of stuff. I think the old ways of just gaming stuff is still going to continue to be nerfed. But you're going to see more technical content, more documentation being created because there's a proliferation. If you're creating more tools and more products, you're

going to need more documentation number six i see a huge trend in 2026 in which people are going to slowly stop using ai to market to ai uh youtube flags content when it's ai uh the other social platforms are going to follow along it's just a question of when uh with youtube it's right underneath the video where they let you know that it's ai related anthropic released the i believe there's a linkedin post or article breaking down how we need to be careful and we should put the pause You know, everyone's worried about AI learning from AI in a really negative way that can create safety issues or any other concerns or give people inaccurate information.

And what we're seeing right now is people doing a lot of guest posts around the web using listicles and listing their company as the best agency or accounting firm or, you know, baby wipes or whatever it may be that you're selling.

And they're using AI content to create those articles and then publish it everywhere. And no matter how you're trying to market and get into these LLMs, I think the big thing that's going to really hurt you is using AI content to win inside these LLMs. Because eventually, not only will they be able to detect it, there's been some LinkedIn threads talking about how they're already putting in markers and they should be able to detect it. It's more so I think they're going to discount it and it's going to do terrible.

Lily Ray on X has even had posts for more things SEO related when it comes to experimentation with AI content. And she broke down how people had a big upswimming traffic and then a big decline after. Some cases, the decline was greater than where the company was from a baseline perspective. So people are actually going backwards and regressing.

Yep. One of the biggest, this is number seven, but I think one of the biggest AI marketing trends for 2026 is going to be the use of HTML. And what do I mean by that exactly? Meaning that this conversation that we're having right now, we can make it into an artifact.

Now, do I want to say in your MD file that you want to read the whole thing like it's documentation? No. you would make a skill that you can then make into an artifact so we have a cornerstone content uh html file and i'll make into like a slide deck of maybe four or five slides or so i can then send that to anybody i can use that for making a youtube video i can send that to my team for example and i found that whenever i make these artifacts now because i'm i'm living with myself all the time and i'm coming up with all these ideas it's hard to keep people aligned unless i'm showing them these artifacts

So now what I do in my Friday videos to my entire team is I make a video and I go through the artifacts and I explain these things, but I also double over and I make it for YouTube and we can double over and make it for content. But that allows you to just, we talk about speed of communication, speed of ideas again, right? If you're not doing these things, I think it's going to slow you down. So I think, and I got to give a hat tip to one of the engineers at Claude.

He's like, yeah, screw MD files. It's all about HTML files. I was like, yeah, it is all about HTML files now. So yeah, it's been good. We'll leave it at that.

Thank you all for listening and we will see you all tomorrow.