How to create a product packaging strategy in 5 steps

A robust monetization model is crucial for product success, requiring careful consideration of what to charge for, when to charge, and the price structure. The article focuses on defining what to charge for using a packaging strategy matrix, which involves bundling features into different subscription plans or offering them as add-ons. Product managers need to revisit their packaging strategy when existing plans become obsolete or when adding new features. The process of creating a product packaging strategy involves understanding which features users value, their willingness to pay, and calculating the willingness to pay deviation score. Features are then mapped onto a 2x2 matrix based on perceived value and willingness to pay, resulting in classifications such as table stakes, not valued, add-ons, and expansion triggers. These classifications inform decisions on which features to offer for free, include in basic or higher tiers, or sell as add-ons. Regularly reviewing and optimizing the packaging strategy can significantly impact product performance and revenue.