Pricing Strategy
Crafting Value-Based Pricing with Feature Entitlements
Pricing flexibility is a key driver of growth in the world of SaaS. The "set-and-forget" approach to pricing models is no longer an option. Staying competitive does not just come down to having better features or a better go-to-market strategy. Pricing models must keep evolving to stay aligned with your customers needs and ahead of your competitors.
So the question is: what works better for your product? An "all-you-can-eat" approach or an "a-la-carte" approach? Most teams do not have a good answer but the best are ready to experiment and learn.
This is where feature entitlements come into play. The concept of feature entitlements represents the intricate balance between what you offer and what your customers expect. This balance between value and cost can greatly influence customer perception of your product. As a result, building out feature entitlements for your product is a highly iterative process that can often include multiple stakeholders such as product, revenue and engineering teams.
What are Feature Entitlements?
Feature entitlements refer to the set of features or services that customers perceive they are entitled to receive based on the price they pay. Customers inherently evaluate whether the features they receive justify the cost, and meeting or exceeding these expectations is crucial for customer satisfaction and retention.
Challenges of Managing Feature Entitlements
- Diverse Customer Expectations: Customers come from various backgrounds and industries, each with their own unique needs and preferences. Managing feature entitlements becomes challenging when trying to satisfy diverse customer expectations within the same product offering. This often results in overriding limits or features in standard plans to retain key customers.
- Shifting Market Dynamics: Market trends and competitor offerings are constantly evolving, influencing customer expectations and perceptions of value. Staying ahead of these shifts and adapting feature entitlements accordingly requires agility and foresight in implementing feature updates for plans.
- Balancing Value and Profitability: Offering too many features for a low price can devalue the product in the eyes of consumers, while pricing too high may deter potential customers. It can take numerous attempts to find the right balance between perceived value and profitability.
- Technical Dependencies: Constant iteration on plans can tax your engineering team into make one-off exceptions for customers or plans and can create a ton of technical debt with entangled and brittle business logic. In many cases, implementing certain features or pricing models are straight out technically challenging and costly.
Achieve Frictionless Feature Entitlements with Maple
Maple enables you to set usage limits and manage features for different plans without any engineering involvement. This allows for easy experimentation with different features in different packages and allows you to customize the feature set for any segment of your customers without having to rely on your engineering team.
Entitlements can be set at different levels of the pricing stack such as the product level, the pricing level and the individual subscription level. The details of all entitlements, inherited or overridden are returned as computed entitlements with each of the APIs for pricing and subscriptions.
Learn more about achieving the right balance feature entitlements in your plans with Maple.