Key Factors to consider:
Value to the Customer: Understanding the perceived value of the ML product to the customer to different customer segments helps in aligning the price with what customers are willing to pay. Ex: An ML product that increases revenue or significantly reduces cost to the customer, and has a high barrier to entry can command a higher price.
Cost Structure: Consider direct costs (Data Acquisition, Model Training and Infrastructure), and also indirect costs (R&D, Support). Make sure these costs are clearly understood to achieve desired profit margins.
Usage patterns: Different customers may use the product in various ways and volumes. Analyze the usage patterns to suit both light and heavy users, while maximizing the market reach and revenue. Ex: Subscription, Pay per use, tiered pricing models.
Scalable nature of ML products: As usage increases, the marginal costs of ML products decrease due to economies of scale. So, considering this makes usage-based or tiered pricing strategies more favored.
How to Manage Pricing for ML models:
Common Pricing models for ML Products: