FPM

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Feature Placement Matrix

Place features within the appropriate tiers

The Feature Placement Matrix is a part of the Feature and Pricing Suite for SaaS that helps you craft a software offering that maximises the total lifetime value of your users. This tool aims to help you place features into the ideal tiers according to their significance and users' willingness to pay. The matrix is based on the proven MaxDiff and Van Westendorp methodologies and helps brands identify features for:

  • Every tier as they are the must-haves for all users.
  • Premium offerings to engage the most valuable user segments.
  • Optional upgrades or add-ons options to upsell the free and basic tiers users.
  • Deprioritising to minimise investment in non-value-added features.
Feature Placement Matrix

What is the Feature Placement Matrix?

Feature placement matrix

Market your software features within the appropriate tiers

Discover the users' preferences and willingness to pay for each feature

Generated by comparing the MaxDiff scores against the willingness to pay from the Van Westendorp analysis, the Feature Placement Matrix classifies software features into four quadrants - premium, add-ons, every tier, and deprioritise.

In this example, a business messenger app identifies three features to be offered in every tier, two features to be marketed as premium features and optional add-ons, respectively, as well as two features to deprioritise.

Identify the most and least important features for your users

Identify the most and least important features for your users

Rank the perceived importance of your software features

Through MaxDiff Analysis, each software feature is ranked by its prominence in users' subscription decision-making.

The example shows data history, free tutorials/guides, and cloud storage were identified as the most important features among file hosting service subscribers. On the other end, offering a all-in-one control, free gifts, and multiple user access were the least critical features.

Discover the acceptable price range for the software

Discover the acceptable price range for the software

Reveal the too cheap, cheap, expensive, and too expensive price points for your software

Another key output of the Feature Placement Matrix is the Van Westerndorp Price Sensitivity Meter, a chart that highlights the psychologically acceptable range of prices for your software.

For example, this chart suggests that the acceptable range of prices is $7.50 to $12.00, with the optimal price of $8.50.

Recommended further actions

The Feature Placement Matrix helps you classify your software features into one of the four quadrants by comparing the users' perceived importance and willingness to pay for each feature. To craft a software offering that attracts users to premium offerings while not disenfranchising the basic tier users, Conjoint.ly's recommendations for each quadrant are as follows:

Willingness to Pay

HighAdd-onsPremium

High feature importance & Low willingness to pay

  • Offer these features as optional upgrades to boost revenue.

High feature importance & High willingness to pay

  • Use these features to engage high-value segments without disenfranchising lower-end users.
LowDeprioritiseEvery Tier

Low feature importance & Low willingness to pay

  • Minimise investment on these non-value-added features to optimise resource allocation.

Low feature importance & High willingness to pay

  • Offer these features on every tier to keep all users happy.
LowHigh
MaxDiff Scores

Currently being used and refined over hundreds of projects for SaaS brands, the Feature Placement Matrix was created by combining the MaxDiff and Van Westendorp's Price Sensitivity Meter (VW) analysis. Below is the summary of these methodologies:

MaxDiffVan Westendorp
Respondent View

Please review the following features and select the ones you find most important and least important for an enterprise software.

Unlimited online support

Most
Important
Least
Important

100GB Cloud Storage

Most
Important
Least
Important

All OS compatible

Most
Important
Least
Important

Think about SoftwareCo software. At what monthly cost (in USD) per active user, the software would be...

...price so low that you would feel the software couldn't be very good?

...a bargain - a great value for the money?

...starting to get expensive, so that it is not out of the question, but you would have to give some thought to subscribe it?

...so expensive that you would not consider subscribing to it?

OverviewMaxDiff is an advanced analytical tool constructed based on user trade-off decisions. It provides interval scaled utility scores for each feature that businesses are interested in.Van Westendorp is a practical pricing tool constructed based on users' price perception. It provides an acceptable price range for each product.
When do we use it?To create a ranking for different alternatives, such as:
  • Features of a product by importance.
  • Aspects of brands by user satisfaction.
  • Flavours or variants of products by users' preferences.
  • Usage occasions by frequency.
To identify the following price points for products:
  • The “point of marginal cheapness”, or PMC.
  • The “optimal price point”.
  • The “normal price point” or the “indifference price point”.
  • The “point of marginal expensiveness”, or PME.
Format of questions
  • Respondents are asked to choose both their favourite and least favourite alternatives shown.
  • Results are scored by directly polling the respondents.
Respondents are prompted to enter prices they would consider as:
  • The “too cheap” price.
  • The “cheap” price.
  • The “expensive” price.
  • The “too expensive” price.
Application in the FPM

A SaaS brand wants to discover the most important features among users.

MaxDiff analysis provides a robust ranking of the features' importance and the utility scores for each feature.

A SaaS brand wants to learn how much each software feature contributes to users' willingness to pay for the software.

VW analysis identifies the acceptable price range for the software product and provides the optimal price.


Check out the free Feature Placement Matrix Calculator to learn more. Or schedule a consultation with one of our experts to discuss your software projects!

A Feature Placement Matrix survey consists of four following stages.

Stage 1: Screening questions

The survey begins with screening questions to filter potential survey respondents and ensure only the desired audience is re-directed to complete the survey. Some commonly used screening questions include demographics, usages, and behaviours.

How would you best describe your usage, or intended future use regarding the enterprise software?

No Use or Plans

Plan to Use

Using

Heavy user

Stage 2: MaxDiff questions

Qualified respondents then proceed with MaxDiff questions. The respondents are asked to choose both their most important and least important features shown.

Please review the following features and select the ones you find most important and least important for an enterprise software.

Unlimited online support

Most
Important
Least
Important

100GB Cloud Storage

Most
Important
Least
Important

All OS compatible

Most
Important
Least
Important

Stage 3: Van Westerndorp Exercises

Then, respondents proceed to complete the Van Westendorp exercises. Each respondent is asked approximately four questions on the price perception. For instance, at what prices respondents would consider subscribing to the software:

  • “Priced so low that you would feel the software couldn't be very good?” – to determine the “too cheap” price.
  • “A bargain—a great value for the money?” – to determine the “cheap” price.
  • Starting to get expensive, so that it is not out of the question, but you would have to give some thought of subscribing it?” – to determine the “expensive” price.
  • So expensive that you would not consider subscribing to it?” – to determine the “too expensive” price.

Think about SoftwareCo software, at what monthly cost (in USD) per active user, the software would be...

...price so low that you would feel the software couldn't be very good?

...a bargain - a great value for the money?

...starting to get expensive, so that it is not out of the question, but you would have to give some thought of subscribing it?

...so expensive that you would not consider subscribing to it?

Stage 4: Additional diagnostic questions

Lastly, the survey ends with additional diagnostic questions, such as gender, location, and current software usage, that help you perform the subgroup analysis for more in-depth insights.

How many people are employed at your company?

1-50

51-200

201-500

More than 500

Which of the following enterprise software are you using?

Software A

Software B

Software C

Software D

Software E

Software F

Brand X

Brand Y

Soundwave Co

None of the above

Wonder what the actual FPM surveys look like? Take a sample FPM survey today. Conjoint.ly also developed a free version of the Feature Placement Matrix Calculator to help you get started with the Feature Placement Matrix.

Looking to perfect your SaaS offering?

Whether you are looking for insights on your user needs, adopting new users, expanding to a new market or reducing churn rate, Conjoint.ly's team of experts are here to provide you with solutions on time and on budget.

Let's get your research going!

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