PricingNest

Add-On Pricing Strategy

Design add-ons that drive expansion revenue without confusing the core tiers.

Quick checklist

  • Keep add-ons tied to a clear value driver.
  • Avoid bundling add-ons across unrelated tiers.
  • Price add-ons for margin and attach rate.
  • Model expansion impact on NRR.
  • Review add-on performance quarterly.

Step-by-step

  1. Identify features that drive expansion.
  2. Choose per-unit or flat fee pricing.
  3. Model the attach rate and ARPA impact.
  4. Validate add-on costs and margin.
  5. Update tiers to avoid overlap.

What to watch

  • Add-ons that overlap tier limits reduce upgrades.
  • Too many add-ons dilute value messaging.
  • Pricing add-ons below cost drives churn.

Common mistakes

  • Hiding core features behind add-ons.
  • Ignoring support and onboarding effort.
  • Mixing add-on revenue into base MRR.

Tools to use