We have 3 goodies 🎁 and a crazy good June update for you

Implementing feature limits, Packaging 101, and more!

Hello👋🏻

It’s me again. Here to give you some crazy good updates and goodies!

June was a whirlwind of a month at Togai ⚡

We built two major, game changing features from scratch and pushed it live to customers - all in just one month. Here’s a quick sneak peek:

1. Entitlements aka Feature limits: Allow or deny access to features based on their tiers and enable auto-upgrades. This is a way to implement your packaging without writing code.

2. Seat based subscriptions: Implement your seat based pricing model, no matter how complex, with just a few clicks

If you want a detailed walkthrough, we’re always just one click away

But read on for the low-down and some goodies.

June product updates:

1. Entitlements : These are your control switches. Entitlements in Togai let you define what your users can do inside your product - what features they can use and how much. Without any code. Set up feature gates or usage limits for features and build different flows for what happens when a user reaches these limits, with just a few clicks.

   

   For example, let’s take a whiteboarding software like Miro or Figjam. Say a customer is on their basic plan which allows for 3 whiteboards and 4 editors. What do you do when this customer goes over this limit? You can provide different options: purchase additional editors or whiteboards for a certain fee, or you may want to deny access while alerting your CS team about this so they can have an upsell conversation. With Togai you can implement all this and more!

2. Seat based pricing: If your pricing involves a “charge per user” component, you’ll love this! Togai now has advanced support for seat based subscriptions. Specify how many licenses are allowed for each plan and provide your users flows to add, edit or delete seats using Togai. We also support in-advance and in-arrears invoicing of licenses when there is a change in the number of licenses in the middle of the billing cycle. Want to only charge your customers for their licenses on a daily granularity? You can do that too, with Proration!

If these sound exciting, maybe give it a test drive yourself?

Anyway, remember when I said I had some goodies?

Here’s the first one 🎁

A short primer on all things packaging.

We just saw how entitlements help you implement you packaging. But how do you go about packaging in the first place?

Is your packaging setting you up for success? What are some other packaging options you can consider? The next time engineering releases a feature, how do you determine which bundle it goes into?

Answers to all these questions are waiting for you ⬇️

Question 1: Is my packaging working well? OR should I take a second look?

If your answer to any of these questions is yes, then its worth re-considering your packaging:

1. Are you facing difficulty to upsell or cross sell?

2. Are your feature and product usage going up but your bill size remains the same?

3. Are you having to give increasingly large discounts to convert specific customer groups?

4. Are your win rates dwindling?

5. Have you just been giving away every new feature for free and not thinking if you should monetize it?

If your answer is yes, don’t worry - a good rule of thumb is to reconsider your pricing and packaging every month. Read on to see how exactly you can go about tweaking your packaging.

Question 2: Okay looks like I should change my packaging. Where do I start?

Start with your ICP.

In the initial stages, companies sell their products to anyone who is willing to buy. This lack of focus leads to 3 things:

• high CAC

• low win rate

• ineffective pricing

To build a compelling product proposition, you need to know who you're building it for. So you need to have well-defined ICPs to target profitable segments and adapt their products to fit these customers' needs through flexible offerings. It's important to understand the unique behaviours of each customer group. You can do this by analyzing data on feature usage or contract specifics. These variations form the basis for crafting different pricing and packaging strategies.

Question 3: Are there like, different packaging options? That I can consider and choose from?

Yep. There are 5! But most companies go for the Good/Better/Best model.

The first two are simple to implement. As you go to the right, it gets more difficult to set up and implement.

• A good example of Segment/role/use case structure is Gitlab. Gitlab has a buyer based pricing model - free was for individual developers, Premium for team leads and Ultimate for executives.

Whenever the product team built something new, we’d ask ourselves “who cares about this the most?” If it was the executive, it should go on the Ultimate tier. If it was the individual developer, it should go in the Free tier. Considering that the GitLab product org was shipping an average of 50 new enhancements or features each month, having this framework helped us make good packaging decisions at scale and across a large team.

-Scott Williamson, former CPO of Gitlab

• Good/Better/Best is a tiered model that provides

  • a basic/pared-down offering at a competitive price (Good) to attract a new customer,

  • essential/curated features to keep the existing customer satisfied (Better) and,

  • a feature-laden premium version to increase spending by customers who want more (Best), as highlighted in this HBR article.

• With the Modular structure, you need to beware. ‘Build-your-own’-models are most flexible but also very complex for prospects to understand. They can sometimes be seen as nickle-and-diming by the customer, can lengthen sales cycles, and put immense pressure on the sales team. Success hinges on customers and sales staff having a good understanding of the product to navigate its complexities, or on a customer base with very specific requirements. This model usually fits well to established firms in the enterprise segment, because the needs of enterprise customers differ greatly from one another. Two companies that did well with this packaging structure include Twilio and Medallia.

Question 4: How do I know which feature goes in which bundle? Or if it shouldn’t be in a bundle in the first place and become an add-on?

preached by Pricing consultancy Simon-Kucher & partners is to categorize features into “leaders”, “fillers” and “bundle killers” .

"Leaders" are the must-haves, like a hamburger in a McDonald’s, attracting customers and essential for all packages.

"Fillers" are the extras, akin to fries and coke, adding bonus value to a deal. Bundling these boosts customer uptake and increases the average revenue per user (ARPU) as they'd otherwise be cherry-picked a la carte.

The “bundle killers”, are the coffee of your value meal. Very few people want burger, fries, coke AND a coffee. Adding coffee to the value meal might even turn people off from buying entirely because they’d end up with more than they need. Sure, there will be a handful of caffeine-starved customers who do want the coffee. But they can be set up as add-ons that can be bought in addition to the main bundle.

Yep. That’s the end of the Primer.

Hope that was useful!

Moving on to Goodie No.2 🍪

This is for you if you are thinking about adding a usage based component in your pricing. Or wanting to completely move into usage based pricing model.

So last month we wrote a handbook - a strategic AND tactical guide on usage based pricing. It has everything you need to know to create and implement a usage based pricing motion for your products.

Here's a sneak peek of what you'll find inside:

⚡ Is usage based pricing the right fit for your product? What are the benefits? How do different categories and industries use usage based pricing for their products?

⚡The 3 step process to designing the right usage based pricing strategy for you - how to pick the right value metric, the pricing model and the pricing structure.

⚡Implementation checklist for GTM teams. What needs to change in your Sales, support and customer success teams when you're implementing a usage based component?

⚡Technical implementation - what does that look like? What are factors you need to consider before starting the implementation?

Last but definitely not the least is Goodie No.3 🧁

We just introduced a FREE TIER in Togai!

If you’ve been having problems with the way your current billing system and processes work -

• maybe you’re having to constantly create workarounds and build internal tooling to make your billing system work for you,

• maybe everything is manual and you’re thinking “There must be a better way!”,

• maybe your current tool is way too big of a menace to work with and the support from your billing provider isn’t cutting it either.

  

Worry no more.

Togai is here for you.

Play around with the free tier yourself and if you ever need anything, we’re here to help!

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