My friend Amanda Kleha recently was interviewed by Harry Stebbings for the SaaStr podcast. The episode is filled with great insights, mostly from her time at Zendesk. My favorite takeaway is a framework that Zendesk used to create bundles (permutations of capabilities at varying price points—think Good, Better, Best) that were customer friendly and accretive to growth.
The framework, which she attributed to Simon Kucher & Partners, is called leaders, fillers, and killers. It works like this:
- Leaders are the primary capabilities for which customers are willing to pay. Without leaders, customers won’t upgrade from Good to Better, or from Better to Best. They’re must-haves.
- Fillers are the capabilities that are included in a bundle but don’t influence buying behavior. Customers may appreciate them, but not enough to pay more. Fillers are nice-to-haves.
- Killers are capabilities that de-value the bundle in the buyer’s psychology. No one wants to pay for something they don’t need or won’t use. Think of killers as don’t-want-to-haves.
The framework typically is illustrated by a fast food meal, in which the meat (burger, chicken sandwich, etc.) is the leader and the fries and soft drink are fillers. You order a burger and fries, not fries and a burger. A dessert would be a killer, because most people don’t want one; hence, McDonald’s et al. don’t bundle desserts in any of their meals.
Although I find that example useful for understanding the framework in principle, it doesn’t translate perfectly to the world of SaaS, in which Best typically includes all of the capabilities that are included in Better, and Better all of the capabilities that are included in Good.
This implies two important axioms:
- One bundle’s leader is a more expensive bundle’s filler.
- One bundle’s leader is a less expensive bundle’s killer.
Consider the website EnterpriseGrade, a self-described “guide to creating or enhancing a SaaS product with common features that will enable enterprise adoption.” Many of the capabilities described on the website would be leaders in a Best bundle—the reason a large customer would fork over additional money. At the same time, most of them would be killers in a Better bundle because smaller customers would say, “I don’t need that.”
I love frameworks like leaders, fillers, and killers because they make complex decisions more simple. Thanks, Amanda, for introducing me to it.