Beyond Good, Better, Best: Why Intelligent Device Manufacturers Need a New Monetization Playbook

For many intelligent device manufacturers, Good, Better, Best became the blueprint for transitioning from hardware sales to recurring software revenue. The model brought structure to product packaging, simplified purchasing decisions, and created clear opportunities for expansion. For years, it worked.

Today, however, the monetization landscape is changing faster than ever.

AI-powered features, connected products, digital services, usage-based offerings, and outcome-driven solutions are creating customer value in ways that don’t fit neatly into a three-tier package. As manufacturers continue their digital transformation journeys, many are discovering that packaging alone can no longer carry the monetization strategy.

I recently had the opportunity to discuss these trends with Philip Daus, Partner at Simon-Kucher, and Peter Loft, Product Owner for Digital Supply Chain at Schneider Electric. Their perspectives offered a valuable look at how manufacturers are navigating subscriptions, consumption models, AI monetization, and the challenges that come with each.

Their message was clear: Good, Better, Best pricing still has an important role to play, but it is no longer enough on its own.

The Monetization Journey Doesn’t End at Subscriptions

Over the past two decades, software companies have steadily evolved their monetization models. Many began with perpetual licensing before shifting to subscriptions and SaaS. Today, the conversation has expanded again to include usage-based pricing, token models, AI monetization, and outcome-oriented approaches.

The same evolution is happening across industrial technology companies.

Schneider Electric’s experience reflects what many manufacturers are facing. Historically a hardware-centric business, the company successfully adopted subscription offerings and Good, Better, Best packaging. But new customer expectations and digital offerings quickly created pressure for additional flexibility.

Peter described the progression succinctly:

“We have quite successfully moved to a good, better, best recurrent model, and as soon as we’ve done that, we’ve now ultimately moved to this consumption approach.”

The reality is that reaching a subscription model is no longer the destination. For many organizations, it is simply the next stage in an ongoing monetization journey.

Why Packaging Alone No Longer Works

The strength of Good, Better, Best pricing models has always been simplicity. Customers understand what they’re buying. Sellers have a clear upsell path. Product teams can package capabilities into distinct offerings. The challenge is that software value is becoming more dynamic.

A customer using an AI-powered automation solution may derive significantly more value than another customer with access to the exact same features. A predictive maintenance application may create value based on assets monitored, incidents prevented, or hours of downtime avoided. An analytics platform may deliver value based on the volume of data processed or operational decisions improved.

In these scenarios, access alone is no longer the best measure of value. As Philip noted during the discussion, many companies are finding themselves pulled between two competing goals: keeping offerings simple while creating stronger alignment between pricing and customer value.

The rise of AI is accelerating this challenge. Different users consume different levels of AI services. Some organizations may generate significant value from AI-powered workflows, while others use them only occasionally. As a result, manufacturers are increasingly looking beyond feature-based packaging and exploring hybrid approaches that combine subscriptions with consumption metrics, credits, or tokens.

We’re already seeing growing interest in hybrid monetization models that combine traditional packaging with usage allowances, consumption credits, or outcome-based metrics. Instead of charging solely for access to functionality, companies are also monetizing how customers consume and derive value from their solutions.

Peter noted that Schneider Electric’s approach has focused on balancing flexibility with predictability:

“We very much moved away from ongoing consumption versus a prepay consumption model because our customers don’t want surprises with how much something is going to cost.”

That observation highlights an important reality for intelligent device manufacturers. The goal isn’t simply to adopt the latest pricing model. The goal is to give customers more flexibility without introducing uncertainty that creates purchasing friction.

Why Tokens Are Becoming an Attractive Option

One challenge manufacturers are wrestling with is how to monetize software, analytics, services, and AI capabilities when each creates value differently.

Increasingly, token-based models are emerging as one possible answer.

Token models allow customers to purchase value upfront and consume it across different products, services, or AI capabilities over time. Instead of forcing every offering into a single pricing metric, organizations can use tokens as a common currency across multiple value drivers. Philip highlighted this flexibility as one of the reasons token-based monetization is gaining momentum. By converting different value metrics into a common unit of consumption, companies can support multiple business models without forcing customers to navigate multiple pricing constructs.

Schneider Electric has explored a similar concept through its voucher-based approach.

“We developed a voucher system which leans towards a token management system.”

For manufacturers managing a mix of software, services, connected devices, analytics, and AI capabilities, tokenization offers a way to combine flexibility with commercial consistency.

Monetization Starts with Understanding How Customers Buy

One of the most valuable lessons from Schneider Electric’s journey had less to do with specific pricing models and more to do with understanding customer expectations. As the company expanded its portfolio of software and digital services, it found that successful monetization wasn’t just about building the right commercial model. It was also about ensuring those models aligned with the way customers preferred to evaluate, purchase, and consume solutions. Reflecting on that experience, Peter shared:

“We imagined a solution without really understanding our customer base.”

That insight helped shape Schneider Electric’s approach moving forward. Rather than asking customers to adopt entirely new purchasing behaviors, the focus became creating offerings that fit naturally into existing buying processes and customer expectations. As Peter explained:

“We are going to adapt our offer so that it is accessible and easy for you to purchase.”

It’s an important reminder for any organization exploring new monetization models. While innovative pricing strategies often get the attention, long-term success frequently depends on reducing complexity and making it easier for customers to engage with your products and services. As Peter emphasized during our discussion:

“Keeping your customer very much in the front is a good idea.”

Ultimately, the most effective monetization strategies aren’t built around what a company wants to sell. They’re built around how customers prefer to buy and where they realize value.

Monetization Has Become a Company-Wide Capability

Another important takeaway from the discussion is that pricing transformation is no longer just a pricing exercise.

Moving to usage-based, hybrid, or tokenized models affects sales compensation, onboarding, entitlement management, partner operations, customer success, and product strategy. Philip emphasized that customer adoption becomes central to revenue growth under these models because customers continuously decide whether they are receiving enough value to continue consuming the service.

That means everyone contributes to monetization outcomes. If customers don’t activate services, consume available value, or achieve desired outcomes, recurring revenue growth becomes much harder to sustain.

This is one reason successful monetization programs increasingly rely on strong entitlement management solutions, usage visibility, and customer success processes in addition to pricing innovation.

Good, Better, Best Still Matters. It Just Isn’t the Whole Story.

Good, Better, Best models remain an effective way to simplify packaging and guide customers toward the right solution. For many intelligent device manufacturers, it will continue to be an important part of the monetization toolkit.

The difference is that packaging alone can no longer support the complexity of modern software businesses.

As organizations introduce AI capabilities, consumption-based services, connected offerings, and outcome-oriented solutions, they need greater flexibility to align pricing with the way customers actually realize value.

The companies that succeed will be the ones that can continuously adapt their monetization strategy as customer expectations, buying preferences, and digital transformation trends continue to evolve.

As Philip summarized in his closing advice:

“Start with your customers. Don’t start with your pricing strategy. Understand your customers. Do your segmentation work. Do your homework.”

For intelligent device manufacturers navigating the next phase of software monetization, that’s a good place to start.

Continuing the Conversation

The shift beyond Good, Better, Best isn’t really about pricing models. It’s about understanding how customers consume value and building commercial models that evolve alongside them.

Whether you’re exploring subscriptions, consumption-based pricing, token models, or hybrid strategies, the organizations seeing the most success are starting with customer outcomes and working backward from there.

If you’re navigating these challenges, Revenera’s resources on software monetization, usage analytics, entitlement management, and AI monetization can help you evaluate the options and avoid some of the common pitfalls discussed by Philip and Peter during our conversation. The goal isn’t to chase the latest pricing trend. It’s to create a monetization strategy that aligns customer value, business outcomes, and long-term growth.