How to Strategically Package New Product Features

When your company develops new innovations, a key question is: how should you package those features within your current product tiers? This decision can significantly impact customer perception of value and the ease of selling it.

There are two main factors to consider:

1. Perceived value – How much will customers see this innovation as something that enhances their experience or solves a problem?
2. Target customer size – How many of your customers would actually benefit from it?

Here’s an easy framework to visualize your options:

1. New Product or Tier

If the new capability stretches beyond the value of your existing tiers, or it could shift the positioning of your entire product, it may be better to create a new tier or even an entirely new product. This will need more effort in field enablement and communication, but it also opens the door to greater potential revenue.

2. Add it to an Existing Tier

This is the right call if the innovation fits seamlessly with the current messaging of your product. Adding it to an existing tier can make the sales process easier because you’re building on something customers already understand.

3. Make it an Add-on

Sometimes, the innovation only appeals to a small segment of your customer base. In this case, packaging it as an add-on is a good move. This way, it doesn’t disrupt your core product offering, but customers who need that extra functionality can still get it.

4. Do Nothing/Kill the Initiative

And sometimes, the best option is to not move forward at all. If the perceived value is low and only a small percentage of your customers would care about it, it might be better to shelve the idea and try something else.