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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Increasing Average Deal Size with Strategic Packaging
Effective packaging is a powerful lever to increase your average deal size. Here's how to approach it:
5-Step Packaging Framework
Segment Fit: Ensure your packages are precisely tailored to different market segments. Understanding the specific needs of each segment allows you to create value-based packages that command higher prices.
Upside Capture: Design packages that effectively capture upside from high willingness-to-pay customers. This often means including premium features or service levels that high-value customers are willing to pay significantly more for.
Clear Differentiation: Make your packages meaningfully differentiated from each other. When packages have distinct value propositions, customers can easily identify which tier best meets their needs and are less likely to default to lower-priced options.
Scalability and Growth: Structure packages to enable natural upsell and cross-sell paths. This creates opportunities to expand deal size both initially and over the customer lifecycle.
Recognize Customer Differences: Implement different packaging strategies for new versus existing customers. Existing customers often have different needs and buying considerations than new prospects.
Practical Implementation
Feature Distribution: Strategically allocate features across tiers, reserving high-value capabilities for higher tiers. As illustrated in our ACME AI example, enterprise tiers receive "XL" allocations of critical features while lower tiers receive scaled-back versions.
Add-On Strategy: Create a core package with strategic add-ons that allow customers to customize their solution while increasing deal size. For example, in our Enterprise Plan illustration, features like "Custom LLMs" are positioned as add-ons even at the highest tier.
Package Rationalization: Sometimes fewer, more focused packages drive larger deals. In one of our case studies, a $30M ARR eCommerce SaaS company increased deal sizes by 15-30% by rationalizing from 12 packages to just 5 core packages across 3 product lines.
Align with Go-to-Market Motion: Ensure your packaging structure supports your sales strategy. The same case study demonstrated success by aligning pricing strategy to their enterprise-heavy sales motion.
Proven Results
Our packaging approach has delivered measurable results for clients. For example, the eCommerce CX SaaS company mentioned above not only saw 15-30% increases in average deal size but also achieved 100% sales team adoption of the new packaging structure, ensuring consistent implementation throughout the organization.
By applying these packaging principles, you can create a tiered offering that naturally guides customers toward higher-value purchases while providing clear upgrade paths for future expansion.