Early adoption rates for GenAI services point to clear opportunities and monetization strategies

Zuora, Inc. (NYSE: ZUO), a leading monetization suite for modern business, today released the findings of its latest study, AI Monetization Strategies: What Consumers Want and How to Deliver, which analyzes consumer behaviors and preferences regarding AI and generative AI (GenAI) services.

As businesses navigate monetization strategies for these new technologies, The Subscribed Institute at Zuora® commissioned The Harris Poll to conduct a study in May 2024 among more than 2,000 U.S. adults to better understand current adoption and sentiment regarding AI and GenAI services. While the pace of innovation is not slowing down, the data shows that we are still in the early stages of consumer adoption, particularly for older generations.

Key findings from the study include:

• While we are at the beginning of the consumer adoption curve for AI services and technologies, there are clear opportunities to drive future adoption across age groups: 50% of Gen Z respondents are currently using the technology, compared to 43% of Millennials, 20% of Gen X and only 9% of Boomers/Seniors. Overall, 28% of respondents say they are using these services. Another 27% of all respondents are not currently using GenAI services, but report an interest in trying them.
• Preference for usage-based models: More than half (53%) of all respondents say it is important to have a usage-based pricing model available for AI and GenAI services, compared to much fewer who say the same for an option for an annual recurring (29%) or monthly recurring (28%) charge for AI and GenAI services.
• Early adoption of AI services may be linked to a preference for outcome-based charges: Study results indicate a potential correlation between GenAI services adoption and interest in outcome-based charge models. Among those who use or are interested in using GenAI services, Gen Z reported both the highest adoption rate of GenAI services (50% of Gen Z) and the highest preference (23%) for outcome-based charges (compared to 17% of Millennials, 16% of Gen X, and only 8% of Boomers/Seniors). This type of usage-based pricing model charges customers based on the actual resolutions, or outcomes, produced by the service.
• Success hinges on aligning monetization with perceived value: Most respondents (70%) said they would not currently be willing to pay extra for embedded, GenAI-enabled features, however, early adopters may be more willing. Gen Z is the only age group that is essentially split down the middle in terms of willingness to pay (54% yes; 46% no) for added GenAI capabilities within an existing subscription (compared to Millennials: 43%, Gen X: 24%, Boomers/Seniors: 11%). By tapping into the preferences of those adopting the technology at higher rates, like Gen Z, vendors may be able to expedite value realization.

“The rapid evolution of AI services presents significant monetization opportunities and challenges,” said Amy Konary, Senior Vice President and Founder of the Subscribed Institute at Zuora. “The varying interest between generations highlights the need to deliver clear value while acknowledging that value may differ for each age group. Companies that embrace usage-based pricing and outcome-oriented models can also be better positioned to maintain recurring customer relationships in the age of AI.”

To read the full study, visit here.

About Zuora, Inc.

Zuora provides a leading monetization suite to build, run and grow a modern business through a dynamic mix of usage-based models, subscription bundles and everything in between. From pricing and packaging, to billing, payments and revenue accounting, Zuora’s flexible, modular software platform is designed to help companies evolve monetization strategies with customer demand. More than 1,000 customers around the world, including BMC Software, Box, Caterpillar, General Motors, The New York Times, Schneider Electric and Zoom use Zuora’s leading combination of technology and expertise to turn recurring relationships and recurring revenue into recurring growth. Zuora is headquartered in Silicon Valley with offices in the Americas, EMEA and APAC. To learn more, please visit zuora.com.

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Information on these risks and additional risks and uncertainties that could cause actual outcomes and results to differ materially from those included in or contemplated by the forward-looking statements contained in this release is included under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended January 31, 2024 and the Quarterly Report on Form 10-Q for the fiscal quarter ended April 30, 2024, which is available on the “Investors” page of our website at https://investor.zuora.com and on the U.S. Securities and Exchange Commission’s website at www.sec.gov. Additional information will also be set forth in other documents that we may file from time to time with the Securities and Exchange Commission. All forward-looking statements contained herein are based on information available to us as of the date hereof. Except to the extent required by law, we do not assume any obligation to update these statements as a result of new information, future events, or otherwise.

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SOURCE: ZUORA, INC.

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