Latest news with #pricingmodel
Geeky Gadgets
10-07-2025
- Business
- Geeky Gadgets
Cursor AI's Controversial Pricing Update Explained, is Simplicity a Thing of the Past?
What happens when a tool designed to simplify your workflow suddenly becomes more complex? That's the question many Cursor AI users are grappling with following the platform's latest update. Once celebrated for its straightforward pricing and user-friendly approach, Cursor AI has introduced a new usage-based pricing model that's as ambitious as it is polarizing. While the company touts this change as a step toward sustainability and scalability, many users are left questioning whether the trade-off is worth it. With concerns over transparency, value, and the loss of control over AI model selection, the update has sparked a heated debate about what users should expect from their AI tools—and whether Cursor can still deliver on its promise of simplicity. In this overview, Robin Ebers unpacks the implications of Cursor AI's pricing overhaul and explore what it means for both casual users and power users alike. From the introduction of 'auto mode' to the competitive pressures posed by rivals like Claude Code, this update is more than just a pricing shift—it's a reflection of the growing pains many AI platforms face as they scale. Whether you're curious about how these changes might impact your workflow or looking to understand the broader trends shaping the AI landscape, this analysis will provide the insights you need to navigate the evolving world of Cursor AI. After all, when innovation meets friction, the real story lies in how companies adapt—and how users respond. Cursor AI Pricing Changes Cursor explains more 'We recognize that we didn't handle this pricing rollout well, and we're sorry. Our communication was not clear enough and came as a surprise to many of you. We're improving how we communicate future pricing changes. We are offering usage refunds for those with unexpected usage between June 16 and July 4. Please contact pro-pricing@ if you had a surprise usage bill and the team will work as fast as possible to get you a full refund.' From Simplicity to Complexity: The New Pricing Model Cursor AI's previous pricing model was simple and predictable, offering users a $20/month plan that included 500 fast requests and unlimited slower requests. This structure was particularly appealing to users seeking affordability and ease of use. However, the company determined that this model was financially unsustainable in the long term. As a result, Cursor introduced a tiered, usage-based pricing system with three distinct plans: Pro ($20/month): An entry-level plan with limited usage, suitable for casual users. An entry-level plan with limited usage, suitable for casual users. Pro Plus ($60/month): A mid-tier option offering expanded features and higher usage limits. A mid-tier option offering expanded features and higher usage limits. Ultra ($200/month): A premium plan designed for heavy users, providing the most included usage. A key feature of the new model is 'auto mode,' which dynamically selects AI models based on availability and cost-efficiency. While this feature allows for unlimited usage within certain parameters, it also imposes restrictions on users who prefer specific models, such as Claude 4. These limitations, coupled with additional charges for model-specific usage, have caused frustration among users accustomed to greater control and predictability. User Concerns: Transparency and Value The transition to the new pricing structure has been met with mixed reactions, with many users expressing concerns about clarity and value. The introduction of 'auto mode' has been particularly contentious, as some users find its functionality and limitations difficult to understand. Additionally, the new model's rate limits and restricted access to preferred AI models have led to perceptions of diminished value compared to the previous plan. In response to these concerns, Cursor has acknowledged its shortcomings in communication and taken steps to improve transparency. These measures include: Updating documentation to provide a clearer explanation of the new pricing structure. Introducing a subscription usage summary to help users monitor their consumption more effectively. Offering refunds to users who experienced unexpected charges during the transition. While these efforts aim to rebuild trust, dissatisfaction persists among some users, particularly those who feel the new pricing model undermines the predictability and flexibility they previously enjoyed. Cursor AI update Watch this video on YouTube. Explore further guides and articles from our vast library that you may find relevant to your interests in Cursor AI Pricing Changes. Competitive Pressures: How Cursor Stacks Up Against Claude Code Cursor's pricing overhaul has inevitably drawn comparisons to competitors like Claude Code, which continues to offer a more straightforward pricing approach. For example, Claude Code's Max plans provide unrestricted access to specific models, such as Claude 4, and deliver better throughput for users who prioritize performance and model specificity. In contrast, Cursor's reliance on 'auto mode' limits user control over model selection. While the Ultra plan offers significant usage at a competitive price, it may not appeal to users who value flexibility and predictability over cost-efficiency. For these users, Claude Code presents a compelling alternative. However, Cursor's offerings remain attractive to users who can adapt to the constraints of 'auto mode' and prioritize cost-effectiveness over model preference. The choice between Cursor and its competitors ultimately depends on individual user needs, including their usage patterns and priorities. Balancing Financial Viability with User Satisfaction Cursor AI's pricing overhaul reflects a broader effort to balance its operational costs with the demands of its user base. By encouraging users to adopt 'auto mode,' the company aims to optimize resource allocation and ensure long-term sustainability. However, this approach has alienated some users who feel the new structure sacrifices the flexibility and predictability they valued in the previous model. To navigate this tension, Cursor must focus on improving its communication and enhancing transparency. The company has already taken steps in this direction, but further investment in user-centric features and clearer messaging will be critical to regaining trust. Additionally, Cursor must remain attentive to the competitive landscape, making sure its pricing model aligns with both its operational goals and the evolving needs of its diverse user base. Cursor's ability to strike this balance will play a pivotal role in determining its future success. By addressing user concerns and refining its offerings, the company has the opportunity to maintain its competitive edge while fostering a more satisfied and loyal customer base. Media Credit: Robin Ebers Filed Under: AI, Top News Latest Geeky Gadgets Deals Disclosure: Some of our articles include affiliate links. If you buy something through one of these links, Geeky Gadgets may earn an affiliate commission. Learn about our Disclosure Policy.
Globe and Mail
29-06-2025
- Business
- Globe and Mail
Dollar Tree Stock Is Soaring. Is This the Time to Buy?
Shares of Dollar Tree (NASDAQ: DLTR) are up more than 60% since mid-March and are fast approaching a 52-week high. As the company prepares to divest itself from its Family Dollar brand and embraces a new pricing model, Dollar Tree appears capable of thriving even as many retailers struggle with tariffs and economic uncertainty. There's a lot happening with Dollar Tree -- management changes, the Family Dollar mess, and its 3.0 pricing model. But all of it makes Dollar Tree a compelling stock that appears capable of producing oversized gains for investors. How is Dollar Tree threading the needle? And more importantly, is there still time for investors to join the rally? Family Dollar didn't work out Dollar Tree excels by providing low-cost household goods, food, cleaning supplies, and beauty products. Most items are priced at $1.25 (it used to be just a dollar, but the company began raising prices in late 2021 to offer a wider selection). Shares of Dollar Tree stock topped the $170 mark as recently as 2022, but began a long fall in 2024, stretching into the first quarter of 2025. Dollar Tree CEO Rick Dreiling stepped down, citing his health, and was replaced by Michael Creedon, who was formerly chief operating officer. Meanwhile, Family Dollar, which it purchased for $8.5 billion in 2015, continued to drag on the business. Dollar Tree finally shuttered several hundred Family Dollar stores in recent years, and then in 2024 announced it was exploring divesting itself of the brand. This March, Dollar Tree announced it had a buyer -- a partnership of hedge fund Brigade Capital Management and investment firm Macellum Capital Management, which are buying the stores for just over $1 billion. The deal is expected to close in this quarter. Not surprisingly, Dollar Tree stock started to recover soon after the announcement. Shares are up 61% since mid-March and 33% on a year-to-date basis. Dollar Tree stock has a long way to go from its 2022 ceiling, but it's only about 10% off its 52-week-high. Writing a new chapter The most interesting thing about Dollar Tree is its willingness to walk away from what made it famous. The company is embracing its 3.0 multi-price store format that includes wider store aisles, better signage, and a tiered price structure, where products range up to $7. Dollar Tree began switching stores over in 2024 and now has about 3,400 in the new format. Management hopes to have half of the company's stores working in the 3.0 format by the end of 2025. The format means that Dollar Tree can expand its offerings and draw in additional customers at higher price points. Same-store sales in the first quarter of fiscal 2025 (ending May 3) showed a 5.4% gain, which management attributed to higher prices and greater traffic. Gross profit increased to $1.6 billion, thanks to lower freight and occupancy costs. Adjusted earnings per share came in at $1.26. Dollar Tree opened 148 stores during the quarter and now has more than 9,000 locations, with plans to open a total of 400 stores this year. Management reiterated its full-year revenue guidance of $18.5 billion to $19.1 billion, while raising its guidance for earnings. The company is now expecting full-year EPS of $5.15 to $5.65, up from a range of $5 to $5.50. What's ahead for Dollar Tree? Even with higher-priced items, Dollar Tree is a discount retailer, and when people feel like their pocketbooks are getting squeezed, they are much more likely to look for consumer staples in a store that specializes in low prices rather than luxury items. So that helps Dollar Tree's outlook. But there's also the continued threat of tariffs, although President Donald Trump is developing the practice of announcing huge punitive tariffs as a negotiating ploy and then immediately rolling them back. Tariffs are a threat to any discount retailer, but perhaps even more to a store that sells many of its products for $1.25. If the tariffs come roaring back, Dollar Tree will need to make some changes either in pricing, the types of goods it offers, or will have to work some price relief with its suppliers. So is Dollar Tree a buy? Dollar Tree today is a pretty cheap stock -- the price-to-earnings ratio of 19.7 and the forward P/E of 18.3 are both attractive, as is its low price-to-sales ratio of 1.2 times. Now that the company is ridding itself of the Family Dollar fiasco and appealing to more consumers with its 3.0 multi-price format, Dollar Tree stock appears capable of setting a new 52-week high this summer. It's too early to say if it gets back to its 2022 heyday, but Dollar Tree is certainly on the right track. Should you invest $1,000 in Dollar Tree right now? 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Forbes
06-06-2025
- Business
- Forbes
In The Age Of AI, Why Businesses Are Changing Their Pricing Strategies
The end of the billable hour getty As AI takes on more business processes, more businesses are having to rethink their approach to fee-charging. The reality is that many traditional time-based pricing strategies are becoming obsolete. And it's not hard to see why. When AI can dramatically reduce the time taken to complete a project, how do you justify billing by the hour? Typically associated with law firms, the billable hour has, for decades, been the pricing model of choice for businesses across a range of sectors, including marketing and advertising agencies, consulting firms, IT consultants, architects and accountants. Questions have been raised about the ethics of billing by the hour, but it is the growing presence of AI in so much of the work carried out by firms that is forcing a rethink. Just recently S4 Capital announced it was moving to output-based pricing because of the impact of AI. Changing a pricing model to assign a value or output to services poses significant challenges for many businesses. SCOPEBetter is a pricing platform designed to help them transition from a time-based billing model to one based on outputs and deliverables. Founder and CEO Tracey Shirtcliff says: 'Over the last seven years we have convinced and moved quite a few smart working businesses. Some 'got it', but many didn't, and didn't feel they needed to move. Over the last 12 months, this has changed. All the talk about AI has been about how to use it for efficiency in working, but lately, the realization has come that these gains will decimate the billable hour. We are getting a noticeable increase in enquiries.' Small businesses are seeing AI as an opportunity to level the playing field and leapfrog larger organizations. However, many believe that moving from time-based fees to value-based pricing isn't just about billing. It's about shifting the focus in terms of the concept of value in the AI era. This forces a halt to measuring effort and instead encourages the measurement of impact, at a time when many process-based tasks will become faster and cheaper to complete. The Brick Coach operates an outcomes-based pricing strategy, demonstrating to clients that the business cares more about the results than how long it takes to achieve them. Founder Amale Ghalbouni says: 'It demands tighter scoping, clearer communication, and a deeper understanding of what success looks like for the client. This may be uncomfortable for those looking to make a quick buck, but essential if you want to stay relevant and genuinely care about the work you do for clients.' Measuring impact is key to a successful value-based billing model and Ghalbouni approaches it by spending time upfront in discovery mode with clients to understand their desired outcomes and outputs, what their reality is and what the gap looks like. 'It often gives clients insights into their business they weren't aware of,' she says. 'It also makes the relationship less transactional and ensures we're both committed to achieving the desired impact.' Far from being resistant to change, Ghalbouni's clients have been strongly in favor of it. 'Clients sometimes struggled with hourly or day rates, as it often meant budgets were harder to manage, and outcomes badly defined," she says. "Value-based pricing gives them confidence that they will get the outcomes they need, regardless of how much work or time we put into the project. It took some adjustment to get the margins right first, but after a few projects it became easier to price and predict performance.' Some believe that time-based billing can misalign incentives, rewarding inefficiency over impact. That was why FIG Agency made the shift five years ago to a senior-by-design approach, a structure that allows them to solve problems more quickly and deliver sharper, more effective solutions. Founded 12 years ago the marketing and creative agency consulting firm serving a diverse range of clients, including mid-cap brands such as Benjamin Moore, Tropicana Brands Group and Publix. Partner and CFO Richard Tan says: 'With our proprietary creative data system, StoryData, that harnesses various forms of machine learning and AI to deconstruct the storytelling opportunities, we can evaluate an entire category within 48 hours of a brief. We knew a time-based price wouldn't be appropriate remuneration for those results, so we decided to shift our strategy.' Establishing a new set of billing parameters brings many challenges. Clients need to trust that the results they receive are worth the money they're spending and that the price is fair. Nevertheless, pricing models are evolving, and Tan insists that historic time-based models are becoming less relevant. He adds: 'Outcome-based pricing is the next frontier, and agencies are ready to tackle and embrace it. My advice to other firms is to future-proof their business by focusing on quality outputs and results rather than time.' Others are not quite ready to consign billable hours to history and believe they still have a place in business. Continuous Improvement Projects has a blended model that allows them to use either value-based pricing or time-based pricing based on a logical pricing strategy. CEO Kiran Kachela says: 'Value-based pricing is our preferred model for projects with clearly defined objectives and measurable deliverables, empowering clients with transparent cost-benefit analysis and a clear understanding of their potential return on investment upfront. It shifts behaviors, aligning everyone toward a solution-focused, output-driven outcome where the tangible value we deliver is clear for all to see.' But she is adamant that the day-rate model still has its place, not least because of the many unknowns and variables, evolving scopes, and high risks that can be baked into a project. 'When things are too risky or ambiguous, value-based pricing simply doesn't work as it necessitates excessive risk premiums, undermining its core benefit,' says Kachela. 'Ultimately, it's about finding that sweet spot; a blended approach that weighs up output-focused solutions with the inherent risks. We choose the model that's going to deliver maximum ROI for our clients.' According to Shirtcliff, the argument that billing by value is better than billing by the hour, for both the business and the customer, is a compelling one. 'Professional services businesses that productize what they do and charge for outputs or outcomes find it more attractive overall,' she says. 'You can increase revenue without increasing proportionally the staff need, breaking the traditional hourly billing linear model.' There are also opportunities to reduce operating expenses, and the administrative burden of tracking, reconciling and defending billable hours, which can consume 20% of business operating expenses, and which productization can help eliminate. 'In a time-based model, high-value talent is often a cost center,' she adds. 'In a productized model the impact can be scaled across multiple solutions, generating higher returns and not labor costs.' As AI continues to evolve and play a bigger role in work practices, and pricing strategies, will the setting of service pricing parameters become even more challenging? Shirtcliff believes that teams will develop to have a series of AI-powered products, or outputs that will be chosen and presented to clients based on the scenarios that the clients need to solve for. She adds: 'I also believe that over time we will see AI Agents asking those scenarios or questions of teams which will produce the products that the business will deliver best and in which circumstances.'
Gulf Business
29-05-2025
- Business
- Gulf Business
Starting July 1: WhatsApp Business rolls out major pricing changes
Image credit: Getty Images In a significant move for businesses worldwide, WhatsApp Business has announced a revamped pricing model for its WhatsApp Business Platform, set to take effect on July 1, 2025. Per-message pricing: Shift in billing strategy 'This update aligns our pricing structure with other leading communication platforms that already operate on a per-message basis,' said a WhatsApp spokesperson. Free messaging within the customer service window Businesses can still respond to customer inquiries for free within a designated 24-hour customer service window, which resets every time a user sends a new message. During this period, companies can send both free-form and utility messages at no cost. 'This gives businesses more flexibility and choice when responding to customers, without worrying about added fees,' WhatsApp noted in its update. New volume tiers offer scalable savings To support growth, WhatsApp Business will roll out market-specific volume tiers for utility and authentication messages. As businesses scale up, they'll automatically benefit from reduced pricing in higher tiers. 'The more messages you send, the more you save,' WhatsApp stated. 'Volume-based pricing makes the platform more cost-effective for growing businesses.' These volume tiers are category-specific and market-based. For instance, a business sending utility messages in Brazil would qualify for a separate pricing tier than one sending authentication messages in India. What this means for businesses Predictable billing with per-message pricing No cost for responses within the customer service window Lower rates at higher volumes, incentivising platform growth Alignment with global communication pricing standards Looking ahead This pricing update signals WhatsApp's continued commitment to supporting business communication while ensuring cost-efficiency and scalability. Companies leveraging the WhatsApp Business Platform should review the new pricing structure closely to optimise their messaging strategies before the July 1 rollout. For a detailed breakdown of the updated rates and volume tiers, visit
