+++ date = "2016-10-25T00:00:00Z" title = "Product Assortment" featureslug = "product-assortment" type = "feature" hero = "/images/product-assortment.svg" metadescription = "A guide for SaaS products to offer differently priced versions of a application to meet the differing needs of enterprise buyers." pagetitle = "Enterprise Ready SaaS App Guide to Product Assortment" ogimage = "images/twtr/product-assortment-og.png" +++
Product assortment is the method by which SaaS companies create different product packages to appeal to different buyer personas. This is most evident on SaaS pricing pages where plans are listed as “Startup”, “Professional” and “Enterprise”, and are differentiated by a series of increasingly complicated features.
In general, the features that differentiate the “Startup” and “Enterprise” pricing plans and create product assortment are the same features that define EnterpriseReady. Why add these features to a product? 1) Large companies require them in order to buy and use most products. 2) Large companies are willing to pay more for a version of a product that has those features (allowing you to capture more value). 3) Enabling complicated, enterprise-focused features for all customers can complicate on-boarding of smaller customers.
Enterprises face unique problems in adopting third party SaaS applications due to their scale & risk profile. Enterprises inherently push the limits of scale and are, by definition, BIG. They have many employees, policies, customers, vendors etc. Equally important is the desire of enterprises to reduce risk around business continuity, security, compliance, availability etc. In order to adopt a third-party application, the enterprise buyer must be confident that the product can meet their requirements around scale and risk.
EnterpriseReady products recognize that the needs of large organizations differ from those of individual users and smaller organizations. They also recognized that these users receive differing amounts of value from the software. Traditional ‘one-size fits all’ SaaS pricing can make it hard to capture value in proportion to the value created for larger customers. Therefore, many SaaS companies create variations of their product to appeal to each market and allow them to capture value more proportionally. In the product pricing world, this is called vertical product assortment (this talk by Michael Dearing is a great overview of pricing & product assortment). Additionally, consumer research shows that it's important to not overload the purchaser with too many options, with three offerings being the generally optimal number of options to aim for.
Feature bloat can kill the simplicity and utility of SaaS products over time. Great products should be easy for new customers to get started with immediately, but have the power to satisfy the needs of advanced power users. One way to accomplish this is to only offer a subset of functionality to customers who self-select into a less complicated (and less expensive) version of the product. These starter plans can be a great way to get adoption into large customers through a grassroots or bottom-up software adoption model made popular by the likes of Yammer, Slack, GitHub, Salesforce, Dropbox and Atlassian.
{{< example title="Slack Product Assortment" url="/slack/product-assortment" image="/slack/images/example_pa.png" >}}
{{< example title="Zendesk Product Assortment" url="/zendesk/product-assortment" image="/zendesk/images/example_pa.png" >}}
{{< example title="Google Product Assortment" url="/google/product-assortment" image="/google/images/example_pa.png" >}}