Cost per interaction
Definition
In classic SaaS, margins improve as usage grows. In AI, every call costs money — so your most engaged users are your most expensive ones. Quality and cost are one conversation, not two.
Cost per interaction is the incremental cost your business pays every time a user triggers an AI response. Unlike classic SaaS — where a marginal user is essentially free — every AI interaction consumes tokens, and heavy users are your most expensive customers. It reframes 'engagement' from a pure win into a metric that has to be traded against unit economics.
Why it matters
Quality and cost are one conversation, not two. And the newest, most expensive model is regularly worse on your specific task — we've seen a frontier model hit 20% accuracy at 100x the cost of a quieter alternative. You only find out by measuring both against your own dataset.