Tiered Pricing

Tiered pricing is a model where a product is sold as several packages, for example Basic, Pro and Enterprise, each with its own price and a defined set of features or usage limits. Customers choose a tier and move up as their needs grow.

Why it matters

Tiers let one product serve very different customers: a hobbyist, a small team and a large company. They simplify the buying decision, create natural upgrade paths for upsells and let the seller capture more from customers who value advanced features. The term can also describe volume tiers, where the unit price changes at usage thresholds, which is a separate pattern that some vendors apply per tier or to the whole quantity.

Example

Free  : 1 site,  daily checks
Pro   : 10 sites, 1-minute checks, 20 per month
Team  : 50 sites, SSO, audit log, 80 per month

Common mistakes

• Offering too many tiers, which makes comparison hard.
• Placing the most-wanted feature in a tier so expensive that customers leave instead of upgrading.
• Not stating whether volume discounts apply to every unit or only those above each threshold.
• Failing to revisit limits as costs and competition change.

Related

• Usage-based pricing
• Per-seat pricing
• Upsell
• Freemium

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