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Estd 4.22.2023
Based on the insights from our SaaS pricing book, Price to Scale, the answer depends on your target customer segments, product complexity, and how you want to drive revenue growth and retention.
Here are key approaches discussed in the book:
• Good-Better-Best Packaging
Our book describes a common approach of bundling features and products into tiered packages (Good, Better, Best). This strategy groups different sets of features into a single package targeted at distinct customer segments – often ideal for markets with a relatively uniform willingness to pay (e.g., SMBs and Mid-Market customers). Tiered packaging simplifies the buying process and increases deal velocity.
• Modular Approach
Another strategy is creating a modular pricing model where individual products are valued and can be subscribed separately. This approach allows for more granular bundling based on customer needs. However, our book cautions that overly complex bundles can confuse customers. Many companies initially adopt several bundles and eventually need to simplify their packaging to avoid market complexity.
• Practical Considerations
- If your customer base benefits from clearly defined, all-in-one solutions, tiered (bundled) packages might help improve perceived value and customer stickiness.
- If customers have very specific needs or usage patterns, separate subscriptions might better align with their purchasing behavior.
- Always test your packaging strategy with customer feedback to ensure it resonates with the intended market segment.
In summary, whether to offer multiple products as separate subscriptions or bundle them together should align with your customer’s purchasing decisions and your operational simplicity. As discussed in multiple sections of Price to Scale, both strategies have merits – the key is to balance clarity, simplicity, and responsiveness to market needs.