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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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Below is a summary of the approach from Price to Scale:
Direct the value proposition:
Our book emphasizes that upselling isn’t just a secondary sales activity—it’s about addressing evolving needs. As the usage of a stand-alone product increases, customers typically encounter a range of additional challenges or requirements that a comprehensive bundle can resolve. The goal is to make the upsell feel like a natural progression rather than a hard sell.Use tiered packaging strategies:
Price to Scale outlines two primary methodologies:
- • Good-Better-Best Packaging: This method involves creating tiered offerings. Each tier is structured with a set of capabilities aimed at addressing the core problems of different customer segments. Positioning your bundle as the “better” or “best” option can naturally convert individual users whose needs have outgrown the basic features.
- • Modular Bundling: This approach assigns distinct value to individual product SKUs and then combines them into a bundle. By clearly delineating the additional value each module brings, you can demonstrate how a comprehensive package can solve a broader set of challenges.
- Leverage usage data and customer insights:
The book advises that the upsell process is fundamentally different from new business acquisition. It requires a data-driven mindset:
- Ensure your product is instrumented adequately to track user usage.
- Use this data to identify when and how a customer’s needs are expanding.
- With clear insights, you can design bundles that align with the customer’s emergent needs.
- Positioning and packaging:
In Price to Scale (Chapter 2 on Positioning & Packaging), the guidance is to design offers that resonate with your customers’ specific requirements. Rather than rigidly imposing a bundle, customize offers to fit the context in which individual users operate. This might include flexibility in pricing contracts or feature bundles to ensure the upsell is relevant and compelling.
In summary, the best way to upsell individual product users to comprehensive bundles—as discussed in Price to Scale—is to use a customer-centric approach by:
• Understanding your customer’s evolving needs with robust usage data,
• Designing tiered or modular packages that clearly articulate additional value, and
• Positioning the upsell as a natural, beneficial progression.
This method not only drives revenue growth but also builds stronger, longer-term customer relationships.