Welcome to Outcome-Washing
Everyone’s at it.
A colleague, consultant, or keynote speaker says something like “you should switch to outcome-based pricing,” and everyone agrees, though few (if any) know quite what they mean.
Why? Because the industry has broadly agreed that outcome-based pricing is a Good Thing. It’s buzzy and AI-coded, a mantra that signifies you’re part of the in-crowd.
The catch is, “outcomes” mean many things to many people. The term is so open to interpretation that it’s at risk of becoming meaningless.
And yet there is no shortage of companies eager to profit from that ambiguity by selling outputs under the banner of outcomes.
Labels Are Being Lost in Translation
Like “green” or any other type of “washing,” a genuinely useful idea is being adopted by organizations with a commercial incentive to claim the label without actually doing the work.
The term has become a journey without a destination, a concept in search of an agreed-upon meaning. The latest example, if you will, of the corporate world running before it can walk.
What is needed is a definition, a point of reference against which to measure our thinking; a way to collectively decide what an outcome is and, critically, what it is not, so customers can avoid agreeing to something that isn’t what it appears to be.
Let’s start by looking at the three primary commercial models deployed in services. We’ll use CX delivery as an example:
- Input-based: You pay for resources deployed (per FTE, per hour, per seat, etc.). The contract is managed via KPI achievement, with any efficiency gains belonging entirely to the client. This is, by a country mile, still the dominant model in practice, and often the model that enterprise procurement teams feel the most comfortable with.
- Output-based: You pay per unit of work completed or resolved (per contact, per case, per ticket, etc.). We believe that most “outcome-pricing” currently on offer—the “outcome-washing” we have coined—is simply output pricing in new clothing. It’s task completion with a per-unit price tag.
- Outcome-based: You pay for the value you want created for your business (better customer experience, lower cost to serve. growth, etc.). In the simplest terms, regardless of your strategic objective, genuine outcome pricing always has a measurable before-and-after state.
The right model isn’t the most sophisticated one, or the most popular one. It’s the one that fits your business. A client with stable, well-understood operations, and a preference for direct control, may achieve better results under an input-based structure with robust KPIs, rather than under a gain-share arrangement that adds complexity and no value.
Selecting (or being sold) the wrong model in the name of innovation is its own form of poor advice.
Outcome-Pricing in Action
When it comes to innovative models, Concentrix is one of a handful of companies that has been offering outcome-based pricing for over a decade. It is a fortunate position to be in as the subject proliferates: we already know what we mean when we offer it.
For example:
Working with a premium retailer, we helped achieve a $4 million cost savings target by aligning incentives through outcome-based contracting. The overall transformation strategy encompassed operating model redesign coupled with AI and automation.
Critically, the transformation needed to deliver this saving while also improving overall Customer Experience metrics.
Delivery against the target unlocked a gain-share mechanism to enable the sharing of future transformation-driven savings with Concentrix, all through an auditable governance process.
The gain-share percentage ranged from 20% to 40% per transformation initiative, depending on the transformation mechanism, level of investment, and ongoing support.
Shared risk. Shared reward.
We are rewarded for the differential. The value created is the outcome.
The client gets a guaranteed, quantified cost reduction. Concentrix recovers its investment and earns a share of the value it creates.
The same logic works with revenue growth. Instead of a fixed cost target, the model ties Concentrix’s reward to revenue growth (upsell, retention, and lifetime value) created through the same kind of transformation.
Everything else—the commercial structures, the contractual mechanics, the technology deployment—is detail layered on top of this core logic.
The Commercial Mechanics
While proposing an outcome-based approach to a client, we identified multiple opportunities where Concentrix was uniquely positioned to add value. Step 1 (Baseline Improvement) combines automation, process improvement, and stronger management practices, while Step 2 (Solution Optimization) rethinks the client’s shoring portfolio.
Together, the application of Concentrix’s operational expertise and best practices could reduce costs by 42.6%.
Conversational AI vendors could address only 15% of that.
The broader opportunity is to reimagine the whole operating model through transformation—enabling even more significant gains.
Resolution in the Air
Before we continue, it is worth reiterating that outputs and outcomes are not the same, and that this distinction goes beyond mere semantics.
Conflating the two has an obvious structural flaw that the outcome-washers are not keen to advertise, so don’t feel compelled to keep this a secret.
Think of it like this. The industry average first contact resolution rate sits at around 70%, which is (just barely) considered a “good” rate. What this means, however, is that nearly one in three customers must call back about the same underlying issue.
A provider operating under an output-based model, charging per contact (or even per resolved contact), has little incentive to reduce contact volume.
Conversely, a provider in an outcome-based model has a very clear incentive to do so, as these exact efficiency gains—a meaningful before and after—are what the model’s success depends upon.
In a true outcome model, both parties always benefit because the quantifiable value is the outcome.
In an output model, though, if a client’s product keeps breaking and customers keep calling, that provider earns more. To be clear, you are, in effect, paying someone to ensure your problems never go away. Ouch.
That, right there, is outcome-washing in practice. You take the language of shared success and wrap it around a commercial model that benefits from continued failure.
And yet, who can really blame them? Providers of point solutions, whether AI startups or more established players, are simply not equipped to identify or solve upstream failures or operating model issues—the very same issues that get pushed (firmly) back to the client.
So… What’s the Outcome?
Once again, none of this means outcome-based pricing is the wrong direction. For clients with the data, trust, and commitment to transformation that can make it work, it can absolutely be the right one. Where those conditions exist, we have been building these models for years.
What it does mean is that you need to be alert to the problem of outcome-washing.
Outcome-washing doesn’t survive scrutiny. It survives in the absence of it. So, this is your warning: you need to be prepared to challenge providers on the ‘what ifs’ when they use that term.
Bringing this scrutiny to the program and working with the right partner is how you deliver on your business strategy—one where outcomes are delivered, and value is created.
