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Advanced Pricing & Packaging Strategies in a Product-Led Growth (PLG) Motion

Advanced Pricing & Packaging Strategies in a Product-Led Growth (PLG) Motion

Gary Chan
March 10, 2025

Pricing as an Impactful Strategic Lever

In product-led growth pricing is really a growth lever for your product. It's a strategic way to influence how customers perceive the value and the quality of the product (whether it's right or wrong), how they would most likely adopt, and also how you can continue to capitalize on upsell revenue.

A lot of it is striking that balance between affordability and value, which is how can people easily access your product, get activated, and then understand that it's worthwhile to invest. So the pricing strategy really influenced that acquisition activation and retention funnel.

When you visit any SaaS tool website, the first thing we visit is their Pricing page. We try to understand what the product does and how much they charge. If it's a reasonable price, we can try it and let the product speak for itself. and not get lost in the marketing mumbo-jumbo. But when the pricing is a barrier to product access, we click the back button. 😅

Whether to move forward depends on the freemium PLG pricing model or the value-based PLG pricing model.

We funnel visitors from our homepage to our free compliance automation landing page for startups and SMBs.

Freemium Plan

The freemium model or the free trial is a long trust game. By allowing access to your product without any cost, it buildsthe relationship between us and our customer that we can continue to nurture.

A freemium tier is what we call the starter plan, which is a basic version of our product. customers can still achieve the goal, but they can unlock additional advanced features to get to their ultimate destination faster.

This balance is based on your platform's paywall strategy.

Ensuring Customer Success to Upgrade

Make sure that the customer is getting value and create scalable pricing - whether it's for seat usage or advanced feature unlocks. Getting the customers to upgrade as their business grows. That's a big part of nurturing the customers.

We do this by checking in with our free customers and their likelihood of upgrading. We track product quality leads (PQLs) based on their platform usage and most frequently logged-in visits. We check in on hand-raisers who need customer support and have questions that we help them go deeper into the product — we track that as customer success qualified leads (CSQLs).

Pricing and Packaging Experiments

Pricing is not a one-and-done. You and the product team continue to iterate on pricing and packaging with the sales and marketing team. New features, new ways of selling, new perspectives, and how the competitor is going after your customers will force you to revisit your pricing and packaging strategy.

We tested out pricing and packaging through our onboarding calls. Every customer we pitch to, we get closer to nailing down the pricing and packaging points that work. Our learning was that customers really care about one feature. And we sold that one feature as an independent package. Then we slowly layer on additional features inside that package to create our advanced tier. We were able to understand what was the lever that got customers to upgrade.

We have to revisit how the grandfather customers and create an entitlement architecture. So we can record SKUs and track upgrades for our sales pipeline.

For a competitive industry like compliance automation, the market perceives it as a commodity product or a race to the bottom. Pricing alongside freemium tier became a driver for word of mouth growth. 40% of our sign-ups came from organic word of mouth marketing.

The 5 PLG Pricing Tips and Takeaways

1) Talk to customers and figure out the lever to your Pricing and Packaging

In the beginning, you will have a very complex pricing and packaging. By getting in front of customers (free customers using your platform and new customers onboarding), you can identify what advanced features are important to them.

We know this when they start to hand-raise for certain paywalls. Eventually, one advanced feature became the most dominant reason for product-qualified leads.

2) Paywall Strategy - Gate Features that allow for Customization

Work with your team on creating paywalls to advanced features. there's a balance in making sure that your product is still user-friendly, but premium features are gated. Focus on gating features that allow for customization.

3) Freemium is a catalyst and a growth driver

The freemium tier really disrupted the industry we were going after. Our customers were very skeptical. By communicating our why and our mission, we were able to turn skeptical customers into champions.

And we were very confident in our product. Freemium truly got customers to activate self-serve. We believe that once they are activated, they will see value and adopt our process, eventually working their way towards our paywall.

4) Explore Premium Services as an Add-on

This strategy might not work for everybody, but consider adding consultation as a packaging add-on. customers who are eager to succeed need assistance, and it is an opportunity to boost your revenue.

We found that by offering premium services, it doesn't scale. We created a new line of operation. But it also created an opportunity for us to upgrade our self-serve capabilities even further.

5) Layer Usage Based Pricing into Packaging

Consider adding a usage-based pricing as another packaging strategy. This requires that the customer is activated on your usage-based feature. They can also see the clear value of the output generated from your usage-based product.

We also package usage-based features as an add-on to our existing tiers to entice our customers.