How to Package Your Product or Service

First published on, in early 2016.

This post is a follow-up post on ‘how to price your products.’ In the previous post, we discussed all the questions you need to ask yourself when pricing your products or services. Most of them focus on the basic offering of your business.

The packaging of your product adds another layer to your pricing and gives you more things to consider. You might feel you’ll need to go back to the points we discussed in the previous post once you have your packaging figured out. This will help you confirm it all makes sense and that you are still positioning your product where you want it to be.

Since it’s still a crucial part of the pricing process, we’ll use the same style in this article, discussing the different questions you need to ask yourself when packaging a product or service.

How do you package a product?

This is where things get more tricky but more interesting. If you asked all the right questions up until now, you should have some sort of idea of how much you would like to charge for your main feature. However, now it’s time to add another level of sophistication to the process and consider the packaging you will be offering.

It’s common to have more than one package to offer your clients, and many businesses find this approach helpful in increasing conversion rates. This also allows businesses to squeeze additional revenues from high-end clients while still offering more than one solution for the same need.

There are so many ways to package your product, but before that, you need to understand:

What are you charging for?

Businesses, especially SaaS startups, have come up with unique ways to price their products. You can price and package your service by:

  • Features
  • Usage by time
  • Usage by volume
  • Number of users
  • Any combination of the above

When approaching this, try to keep it simple. Don’t change what you’re charging for in every package. If you decide to charge for features, it won’t make sense to add another layer of pricing and charge based on the number of users.  Make sure your users can easily understand what they’ll be paying for.  

Should your product be subscription-based or a one time fee?

One time fees are slowly disappearing from the web. Most businesses have already realized that a monthly subscription could eventually mean higher customer lifetime value, even though revenue could be small at first. It doesn’t necessarily mean it can work for your business, but it’s sure worth considering.

How do you position your different solutions/packages against each other?

Like we’ve mentioned, many times, your business will have more than one solution for the same client need. This means you need to consider whether you are selling your solutions as different products, targeting similar yet different audiences, or positioning them as different packages for the same solution and targeting the exact same audience.

When thinking of the price of each solution or package, consider if it’s wise to give one for free as a basic solution and the other one as a premium. Then go through the entire process of the questions you asked yourself in the basic pricing process.

Can your solution be broken into smaller parts to be sold separately or as a basic product plus upsells?

The concept of packaging by features or usage is quite simple and very popular, but there’s another way to approach it. Think about breaking down your features and locate only the main feature(s) your clients are interested in (we discussed that process in the article on how to price your product). Then, consider offering that as the basic, sole product/service that you offer, and add the other features as upsells, trying to push them in the checkout process.

The benefit to consider here is that it might help you position your product on the low end of the price range, while still keeping the possibility of getting more from your clients down the road.

Could a free trial work well in your niche?

One way to package your service or product is a free trial model. Give everything for free for a certain period of time to get users familiar with your product and understand why they need it before they pay.

Set a unique price for the product launch

After you figure the pricing, consider offering your product for free, or for a substantial discount for a limited period of time. Doing so is usually done when launching or looking for beta users. It could be a great way to get noticed, and if you are entering a niche with existing competition, this approach can get you nice PR on relevant blogs. Plus, the fact that your price is set for a small, pre-defined period of time has a huge psychological impact on the users.

Examples of online product packaging

Based on Features:

pardot pricing.png

Based on Time:

experts exchange pricing.png

Based on Volume:

hubspot pricing.png

Based on Users:

infusionsoft pricing.png

Based on Free and Upsells:

webstarts pricing.png

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