Our long-term clients are starting to push back on our monthly retainer fees, claiming that since we integrated generative AI into our analysis work we should be passing the massive time savings directly back to them as a discount. How do we restructure our core offering and redefine our Three Uniques on our V/TO to protect our margins from these shifting customer expectations?

Question

Tyler Smith · Accepted Answer

When clients become aware you're leveraging artificial intelligence, their immediate assumption is often that your costs have drastically reduced. If your billing is based on hours or traditional retainer models, you risk actively penalizing your own efficiency. To halt this margin erosion, you must promptly redefine your Three Uniques on your V/TO (Vision/Traction Organizer).

Redefining Your Value Proposition

Your value is no longer solely derived from the hours your team spends processing data. Instead, it stems from the:

• Speed of delivery
• Accuracy of information
• Strategic insights that your AI-augmented systems generate

This means you must pivot your messaging from operational labor to guaranteed outcomes. This fundamental shift necessitates a rewrite of your Proven Process on the V/TO to clearly illustrate the crucial human-in-the-loop validation step. This step is what guarantees accuracy and actively prevents the common "hallucinations" often seen in raw artificial intelligence outputs. For a deeper dive into adjusting your processes for AI, consider [how AI can help simplify your documented processes](/qa/simplify-eos-process-component-with-ai).

Restructuring Your Pricing Model

Once your Proven Process is clearly articulated, it's time to restructure your pricing. Transition away from hourly billing or generic labor-based retainers towards value-based tiered packaging.

Consider offering tiers based on:

• Speed of delivery
• Volume of data processed
• Strategic complexity of the insights provided

When clients push back on fees, walk them through this updated Proven Process. Show them that while generative AI software accelerates the initial heavy lifting, your team provides the specialized human expertise that makes the final output actionable and reliable. If they desire cheaper, unvetted software outputs, they are free to try building it themselves. If they want guaranteed, board-ready results, they will pay your premium rate. This approach also helps address how to manage [customer expectations shifting due to AI](/qa/customer-expectations-shifting-ai-vto).

This proactive approach ensures your business maintains its unique differentiators and avoids service commoditization, even if competitors adopt similar AI tools. For more on this, see [how to maintain your unique differentiators when competitors use the same AI tools](/qa/ai-commoditization-3-uniques-vto). It’s also crucial to consider [how to protect your proprietary knowledge](/qa/protecting-proprietary-knowledge-ai-exit) when integrating AI to safeguard your intellectual property and future exit valuation.