Unlocking Hidden Revenue: How to Identify and Capitalize on Add-on Opportunities in Your Product

Looking for a way to unlock hidden value in your SaaS product?

How about add-ons?

But how do you decide what should be an add-on and what should be included in your core package?

One method I like to use is mapping out feature usage data on a graph. The X-axis represents time, ranging from some of the time to all of the time, and the Y-axis represents the number of people using the feature, ranging from some people to all people. By plotting all of your features on this graph, you can see which features fall into different quadrants.

🙂 The upper right quadrant is where you'll find many features, which are generally considered your core offering - all of the people, all of the time, or pretty close.

🫣 On the other extreme, the lower left quadrant shows features that very few people use very little of the time. These could be things like profile settings or billing pages, which are necessary but don't get much usage.

🤑 Now, the lower right quadrant is where we're going to focus. These features are used by some of the people, a lot of the time. These are prime candidates for add-ons.

Where I'm from, there's a famous beer with the tagline "those who like it, like it a lot," and that perfectly sums up add-ons. It's something that a small group of users get a lot of value from. A few categories of add-ons may naturally fall into this quadrant.

• premium integrations

• enhanced support and training offerings or other services

• advanced reporting and analytics often end up here

• API access is another common add-on

• increased volume limits

• and of course some features

An excellent example of add-ons comes from Zoom - they have their Zoom One plans ranging from Pro to Enterprise with various features and volume limits as the primary differentiators. Still, they have a host of add-ons you can buy.

Extra cloud storage for recorded zoom meetings is a great example. Not everyone records their meetings, and not everyone who does will record them to the cloud, but there are others where this is very important, and they need to keep a ton of recordings in the cloud - Zoom recognizes this and captures that value with an add-on. Other examples from Zoom include Zoom Whiteboard, Zoom translated captions, Conference room connector, and Premier support.

So, map out your feature usage data and see if you can spot the areas of your product that are ripe for add-ons. By capturing the value you might otherwise be giving away, you'll increase expansion revenueExpansion RevenueExpansion revenue is additional recurring revenue generated from existing customers through upsells, cross-sells, seat additions, increased usage, or tier upgrades.Read more → and ultimately get a nice lift in LTVCustomer Lifetime ValueCustomer lifetime value (CLV) is the total revenue a business expects to earn from a single customer account over the entire duration of the relationship, accounting for expansion, contraction, and churn probability. It is a foundational metric for evaluating pricing, acquisition spend, and customer segmentation.Read more →.

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