What is Tiered Pricing?
What is tiered pricing? It’s an approach that is used to sell goods, services, or subscriptions within a certain price range. After one level is completed, the transition of the next level is carried out. At each level, customers are given a bill for a certain number of purchases.
Tiered modeling pricing in terms of strategy is used to provide your own products or services at different prices to limit or expand features. That is, at the first level, the client receives one set of goods or services, and at the second tier, it’s another, expanded. At the third level the features are even wider, etc. This pricing model is suitable for companies that sell licenses, subscriptions, widgets, etc.
A tiered model is beneficial in terms of encouraging customers to use certain products or services. Thus, the company encourages customers to spend more, because in this case, they will receive more. Also, for marketing purposes, various discounts can be applied.
Most SaaS businesses offer 3 pricing tiers. Some organizations offer even more. At the same time, costs and functions are adapted accordingly for each customer.