Customer Groups and editions

The frame

A Customer Group is a cluster of customers who get value from your product the same way, whatever their size or industry, and who therefore buy it the same way. That is the unit packaging is built for. Personas describe who the buyer is; size and vertical describe the org chart; neither predicts how anyone uses the product. Packaging, the second of the three decisions after licensing and before pricing, decides what goes together for whom. Editions are its most common expression, and only one of several: modular add-ons a customer assembles, a platform with apps on top, an all-in-one, or bundles. The right expression comes from how each Customer Group extracts value. A good-better-best ladder built on features alone is a ladder with no groups under it, and a sales team quoting around the grid is the visible sign.

The edition grid you inherited probably records that mistake. Every custom configuration and discount exception was a deal desk working around editions that matched no real group. Price points cannot be fixed until the editions are coherent, and editions cannot be fixed until you know which groups they serve. Under a mandate to grow without adding staff, this is the decision every later price move depends on.

Customer Groups versus buyer personas: packaging built on personas sprawls, and grouping by shared value lets the editions consolidate. Packaging by workflow: industry is a label on the buyer, and the work customers do is where Customer Groups become visible. Software packaging: editions are one archetype among several, and the edition count is derived from how the groups extract value. Packaging’s job is upsell, a richer edition; the value metric’s job is expansion, more of the same. Good-better-best pricing: the case for the stacked ladder rests on how buyers choose from a menu; the evidence on what belongs on the menu points back to the Customer Groups.

Which clusters of customers get value from your product in different ways, and does each edition you sell answer to one of them?

Three things to say in the room this week

• Before we argue about which features go in which edition, let's name the customers who value this product differently.
• Our packages should follow how customers use and value the product; company size and industry say little about that.
• If every deal closes on a configuration we never published, the editions were drawn around the wrong customers.