As AI technology continues to evolve, understanding consumer preferences is becoming vital for businesses looking to monetize these innovations effectively. With only 28% of consumers currently utilizing AI services, and a striking generational divide—50% of Gen Z compared to just 9% of Boomers—the report by Zuora highlights the need for businesses to tailor their monetization strategies to meet the varying expectations and preferences of each age group.
“The rapid evolution of AI services presents significant monetization opportunities and challenges. 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,” said Amy Konary, Senior Vice President and Founder of the Subscribed Institute at Zuora.
The report suggests that while innovation is accelerating, consumer adoption is still in its early stages, especially among older demographics.
Early stages of AI adoption
The data reveals that we are only beginning to see consumer adoption of AI technologies. Gen Z leads the way, with 50% currently using AI services, followed by Millennials at 43%. Adoption rates drop significantly with older generations, with 20% of Gen X and just 9% of Boomers/Seniors reporting usage. Overall, 28% of respondents are using AI services, while 27% are not yet users but express an interest in trying them.
Preference for usage-based pricing models
The study found that more than half (53%) of respondents prefer a usage-based pricing model for AI and GenAI services. In contrast, only 29% favor an annual recurring charge, and 28% are interested in a monthly recurring payment option for these services.
Early adoption and outcome-based charges
The results suggest a potential connection between early adoption of GenAI services and a preference for outcome-based pricing models, which charge customers based on the actual results delivered by the service. Gen Z shows both the highest adoption rate of GenAI (50%) and the biggest preference for outcome-based charges (23%). This contrasts with lower preferences among Millennials (17%), Gen X (16%), and Boomers/Seniors (8%).
Perceived value
The majority of respondents (70%) indicated that they are currently unwilling to pay extra for embedded GenAI features. Still, early adopters, particularly Gen Z, might be more open to paying for added GenAI capabilities within existing subscriptions.
Gen Z respondents were almost evenly split on this issue, with 54% willing to pay and 46% not willing, compared to a lower willingness among Millennials (43%), Gen X (24%), and Boomers/Seniors (11%). Businesses that align their monetization strategies with the preferences of early adopters like Gen Z may accelerate the realization of value from these technologies.
