If we introduce a major new feature, should we give it to all existing plans for free, add it only to higher tiers, or create a new tier around it?

Based on our saas pricing book, Price to Scale, the answer isn’t one-size-fits-all—it depends on several factors. Here are some key considerations drawn from the book:

• Value and Delivery Cost:
If the new feature is costly to deliver but has a low marginal cost for smaller customers, making it free across all plans might dilute its perceived value. Instead, reserving it for higher tiers can help you better capture the incremental value and protect margins.

• Customer Segmentation and Usage:
Determine which customer segments derive the most value from the feature. For instance, larger customers may find the feature too expensive if added free across the board, while smaller clients might appreciate a lighter version. This differentiation can be achieved by restricting the feature to specific tiers or even mapping customer sizes to graded packages.

• Tiering Versus Add-On Strategy:
Our book discusses a few approaches. One option is to simply add the feature to higher-value tiers (often resulting in more predictable revenue, as mentioned in Chapter 3). Alternatively, you could create a new tier or use an upsell/add-on model where the new feature is priced as an optional enhancement. This approach ensures that customers can choose whether they want the added capability, while you can avoid cannibalizing the lower tiers.

• Clear Communication and Pricing Structure:
The book also recommends maintaining clear feature grids and tier documentation. A detailed chart (as shown in Price to Scale) can help internal teams and customers understand what’s included at each level, reducing confusion during the sales process.

In summary, our pricing strategy book suggests that if you’re introducing a major new feature, you should:

Evaluate the cost and perceived value.
Consider customer segmentation and potential cannibalization.
Decide between bundling the feature into higher tiers or offering it as a separate upsell/add-on.

Ultimately, the decision should align with your overall pricing hypothesis, product maturity, and market strategy. This structured approach will help you balance revenue growth with customer adoption.