# The value metric: what the price grows with > Per lesson, per month, per practice minute or per result: choose the unit a price is charged per so it grows with the value the buyer gets and the cost of serving them. - Course: [Pricing: Set, Package and Raise Your Prices](https://productovi.com/courses/pricing.md) - Module: What exactly are we selling? - Lesson 13/32, ~25 min - Source: https://productovi.com/courses/pricing/the-value-metric ## Unlimited, for now **Alex Tutor:** Module 3 measured what buyers will pay, from interviews to real deposits. This module decides what exactly is sold, starting with the unit the price is charged per. **Alex Tutor:** First, the name for that unit. Klasna already sells two different ones. > **Exercise:** Klasna sells one-to-one lessons per lesson and the Club per month. In pricing, what is a **value metric**? **Alex Tutor:** At Klasna, the Club costs 450 a month with unlimited use of the AI practice partner. The partner is billed in dollars per minute of practice: 0.80 UAH a minute at the planning rate of 44.8. **Leo:** It's software. Once it's built, another minute costs nothing worth talking about. Keep it unlimited and shout about it. **Hanna:** On average it's 50 minutes a member, 40 UAH. That's why the Club's direct cost is 95: 55 for the speaking-club hosts and 40 for the AI. But averages hide people. **Alex Tutor:** Work it per member. Contribution a month is 450 × 0.975 after the payment fee, minus 55 for hosts, minus 0.80 for every minute of AI. $$ \text{contribution} = 450 \times 0.975 - 55 - 0.80 \times \text{minutes} $$ *Contribution of one monthly Club member, UAH a month.* > **Exercise:** A monthly Club member practises **400 minutes** with the AI partner in a month. What contribution does that member leave? In UAH, to two decimals. ## Where a member stops paying for themselves **Sofia:** So somewhere between 400 and 900 minutes a member starts to cost more than they pay. **Alex Tutor:** Find the point exactly: where the 383.75 left after fee and hosts is used up by AI minutes. **Hanna:** Do the monthly plan first. The annual plan leaves less per month, so its point comes sooner. > **Exercise:** At how many AI minutes a month does a **monthly** member's contribution reach zero? To two decimals. **Nazar:** Eight hours a month. Most people do a fraction of that. **Hanna:** Most, yes. But «unlimited» invites exactly the few who do more, and a dollar bill grows with every one of them. When the hryvnia moves, so does that line. **Alex Tutor:** That's the question a **value metric** answers: what unit does the price grow with? Ideally one that grows with the value the buyer gets and with what it costs you to serve them. > **Exercise:** **True or false:** because the AI partner is software, Klasna can offer unlimited practice at a flat price without any risk to contribution. **Alex Tutor:** Before comparing units, agree on the tests a good one has to pass. > **Exercise:** Which **three** tests should a good value metric pass? ## Four candidate units **Alex Tutor:** Klasna already uses two metrics. Lessons are sold per lesson: each one delivers value and costs a tutor's payout, so price, value and cost move together. That's a good metric. **Alex Tutor:** The Club is sold per month. Simple and predictable, but the AI part of its cost grows per minute, so a flat month drifts away from cost for heavy users. **Leo:** Then charge per minute. Perfect match. **Alex Tutor:** Perfect for cost, bad for learning. A learner watching a meter practises less, and practice is the point. People also want to know their bill in advance. **Nazar:** And per result? Pay when your speaking level goes up a step. **Alex Tutor:** Tempting, and hard: the result depends on the learner too, «a step up» needs a fair test both sides accept, and disputes eat the margin. Use results in what you promise and measure, not as the meter. > **Exercise:** Match each value metric to its main weakness for Klasna. ## A middle way **Sofia:** So the Club keeps a monthly price, but the AI part needs some limit? **Alex Tutor:** That's the usual answer: a flat month that includes a generous amount, set so typical members never notice it, plus a clear, fair way to get more. We'll size it in this module's case. **Hanna:** And the limit is written on the price page before people pay, not discovered after. > **Exercise:** Which value metric best fits the Club's AI practice partner, given its cost per minute? The Club costs 450 a month with unlimited AI practice; each AI minute costs Klasna 0.80 UAH, billed in dollars, so a monthly member above about 480 minutes costs more than they pay, while the average member uses 50. **Alex Tutor:** Hanna's point about the price page deserves its own check. > **Exercise:** **True or false:** it's fine for the Club to add a limit on AI minutes quietly and tell members about it only when someone reaches it. **Nazar:** Give me two or three sentences for the Club team on why we're even talking about this. **Sofia:** The cost per minute, where a member stops paying for themselves, and what we'd change. **Alex Tutor:** Keep it short. The team knows the Club well, but not what a minute of AI costs. > **Exercise:** Write 2–3 sentences for the Club team: why does the Club's value metric need to change, and in what direction? Use the numbers: the AI partner costs 0.80 UAH a minute, billed in dollars; the average member uses 50 minutes; a monthly member stops paying for themselves at 479.69 minutes, an annual one at 370. > **Key ideas** > > - A **value metric** is the unit a price is charged per. A good one grows with the value the buyer gets and with the cost of serving them, and stays easy to predict. > - Per lesson fits Klasna's lessons: value and the tutor's payout grow together. > - The Club's AI partner has a **cost per use**: 0.80 UAH a minute, billed in dollars. A monthly member above 479.69 minutes (annual: 370) costs more than they pay. > - Per minute matches cost but discourages practice; per result matches value but needs a fair, agreed measure. > - The usual middle way: a flat price with a stated included amount and a fair way to get more, written on the price page before payment. **Alex Tutor:** Next time: tiers and fences. A cheaper Club, Club Plus, and Dana's three offers. - Previous lesson: [Case: the Club survey that asked only members](https://productovi.com/courses/pricing/club-survey-case.md) - Next lesson: [Tiers and fences: good, better, best](https://productovi.com/courses/pricing/tiers-and-fences.md) --- Productovi Learning. Free, no sign-up needed to read.