If you were a sweater manufacturer and created a sweater with three arms, your colleagues would look at you askance. The flaw is obvious. It’s a ridiculous, unsellable product because it doesn’t match your customer’s needs.
In the physical world, this kind of blunder is easy to spot. However, as I discussed with Jeremy Balius on the Go-to-Market Playmakers podcast, software companies create the digital equivalent of a three-armed sweater all the time. The flaw is just as fundamental, but because it’s buried in complex feature sets, it isn’t as immediately apparent.
The Root Cause: Why SaaS Companies Build Three-Armed Sweaters
This problem almost always stems from a critical disconnect: the mistaken belief that development effort equals customer value.
The real world is filled with examples that prove this wrong. Consider Aha!, whose “concierge service” in their Enterprise+ plan became a primary value driver. The key differentiator wasn’t a complex new feature, but a service that simplified onboarding and support—a low-effort, high-impact solution that customers were happy to pay more for.
On the other end of the spectrum is the infamous Amazon Fire Phone. Its “3D movement effect” was an engineering marvel requiring immense development effort. The problem? Nobody cared. It was a high-effort, zero-value feature that contributed to the product’s failure.
This disconnect is fueled by cognitive biases that run deep in product teams:
- Solutionism: Teams, especially technical founders, fall in love with their own clever solutions. They become so enamored with their “corporate art” that they stop rigorously validating whether it solves a real, monetizable customer problem.
- The Over-serving Bias: This is the trap of making incremental improvements to features that are already good enough. Teams operate under a “more is better” fallacy, adding complexity and cost that customers don’t actually value.
- Confirmation Bias: Teams selectively interpret data to confirm their existing roadmap. Instead of challenging their assumptions, they find evidence that supports their current direction, perpetuating the development of features that miss the mark.
Diagnosis: 4 Red Flags That Your Packaging Is a Mess
How do you know if you’re selling a three-armed sweater? You can start by looking for these four common symptoms in your business.
- Skewed Sales Data: A high percentage of your customers stick with the entry-level plan and never upgrade, or your sales team constantly creates custom deals because the standard packages don’t fit.
- Low Expansion Revenue: You’re good at landing new customers, but they don’t expand. This signals that they don’t perceive enough incremental value in your higher tiers to justify the cost.
- Customer Confusion & “Feature Shock”: You get feedback that customers don’t understand your pricing tiers or suffer from “decision fatigue” when trying to choose. This is often a symptom of “feature shock,” where your product is seen as so bloated and confusing that it overwhelms potential buyers and obscures the truly valuable features.
- Unclear “Job to be Done”: Your packages are defined by a list of features, not the clear problem they solve for a specific customer. If you can’t articulate the “job” a package does, your customers certainly can’t.
The Solution: An Audit Framework for Coherent Packaging
If you spotted any of those red flags, the way forward is to conduct a strategic audit of your offers. It’s not about feature checklists; it’s about asking four fundamental questions for each package in your portfolio.
- What progress does this package help a customer achieve? Look beyond features to the functional, emotional, or social outcome. Customers “hire” products to make progress in their lives. What is that progress?
- What must a customer “fire” to “hire” this package? Your competition isn’t just other software; it’s spreadsheets, workarounds, or doing nothing at all. Understand what customers must give up to adopt your solution.
- How do the features directly contribute to “nailing” the job? Every single component in your offer should serve the core purpose. If it doesn’t, it’s just adding complexity and noise.
- What is the strategic goal of this package? How does this offer fit into your broader business objectives? Is it designed for acquisition, upsell, or retention? A package without a clear strategic purpose is a liability.
The New Urgency: AI Is Accelerating the Problem
This isn’t just a theoretical exercise. In today’s market, coherent packaging is more critical than ever. AI coding assistants are dramatically accelerating software development. Teams can now ship new features and products at a blistering pace.
This creates a new bottleneck: the market’s ability to understand what you’re selling. If you don’t have a coherent story, shipping more capabilities faster will only make things worse. You’ll just be filling your closet with more three-armed sweaters, overwhelming customers, and killing demand.
Conclusion: Stop Knitting, Start Designing
In an age of accelerated development, intentional and coherent packaging isn’t just a best practice; it’s a survival mechanism. Who and how you charge will always be more important than what you charge. Take the time to audit your offers and ensure you’re not just knitting features, but designing solutions that your customers actually want to wear.
We dive deeper into these topics in my conversation with Jeremy Balius on the Go-to-Market Playmakers podcast.