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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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Based on the guidance in our pricing strategy book, Price to Scale, here’s how you can decide which features should go into each tier:
• Direct Answer
Segment your features by aligning them with the specific value each customer group seeks. In simpler terms, the features included in a basic plan should address the core necessities of your entry-level users, while premium plans can bundle more advanced capabilities that appeal to larger or more sophisticated customers.
• Use a Feature Grid for Clarity
Our book recommends creating and maintaining a detailed grid that maps out the features in each tier. This grid not only lists the features but may also include details like geographical availability, implementation notes, and any constraints. Regular updates (for example, quarterly) ensure that all teams—sales, marketing, and customer success—have a single reference point when answering questions like “what’s in the Elite plan?” or “does this work in Europe?”
• Consider Two Primary Approaches
The Price to Scale methodology highlights two common approaches:
- Good–Better–Best: Create 2-3 graded packages where each package groups a set of features that solve specific customer use cases. This works especially well when targeting segments like SMBs or Mid-Market where deal velocity is critical.
- Modular: Attribute value to each individual feature or set of functionalities, allowing customers to upgrade incrementally as their needs grow.
• Practical Application
- Identify Core Use Cases: Determine the primary needs of each target customer segment and map features that directly address those needs.
- Evaluate Feature Value: Consider the perceived value of features – what might be seen as essential in a basic plan versus those that provide competitive differentiation in higher tiers.
- Update Regularly: Use your feature grid to avoid any confusion internally and externally, ensuring that all communications about what’s included in each tier remain clear and current.
• Summary
Deciding which features belong in which tier is about aligning capabilities with customer needs and willingness to pay. By using a detailed feature grid and selecting between a Good–Better–Best or Modular approach, you can ensure that each plan is clearly differentiated and compelling. As discussed in Price to Scale, clarity about your feature tiers is crucial for effective market communication and sales execution.