The Hidden Cost of Feature Bundles

C. Kyle Jacobsen
Aug 8, 2017 · 2 min read

The typical Walmart Supercenter has 142k SKUs. Amazon has 480m SKUs. Your SaaS startup should have 1.

For any SaaS startup trying to figure out how to package and price your product please consider the following:

Avoid experimenting with features bundles and first test and hone your pricing as a single SKU.

Yes, as consumers, we love plenty of options. But the cost of supporting feature bundles (on a single code base) isn’t small. As technologists let’s review what can happen to the business when trying to create feature bundles rather than keeping it as a single SKU.

Product must determine which new experiences should be included in each package. This means every time a cool new feature is introduced you must study how it fits into your current package offerings.

UX must create an experience where persistent upsell opportunities are available for users on lesser packages without making the app too “salesy.”

Development must craft the logic which controls the user experience for each of the packages. This means writing extra code just to keep the features separated.

QA must test each of these scenarios. All of them.

Deployments become more complex than when you have just a single SKU.

Marketing must create messaging which doesn’t conflict with the other SKUs. This means additional collateral. New sales presentations. More web pages.

Sales must be able to differentiate each package and hold firm on its pricing.

Customer Success must justify to existing clients why the new feature Marketing is promoting didn’t fall into their current package.

And Support. Well at this point they have to validate bugs and reproduction of bugs is no small feat.

Now ask yourself… is the cost to support all of ^ outweighed by the revenue from multiple feature bundles? If so, does your startup have the discipline to pull it off?

Startups are all about experimentation — they should be. But, I encourage you to consider experimenting with pricing a single SKU rather than creating feature bundles. It’s usually an easier and more lightweight approach to solving the same problem and your team will go much faster when speed is critical to your success.

Looking for more on this subject. Check out We Need Another Meeting! a podcast about product management and user experience hosted by Josh Tolman and myself. You can follow us on Twitter @wenampodcast

C. Kyle Jacobsen

Written by

CPO and Co-Founder at Everee / Podcast: We Need Another Meeting! / Personal Website: ckylejacobsen.com

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