What's the benefit of the three tier pricing model?
I feel like I see the three tier pricing model everywhere, to the point where it's an industry standard. Why can't you just make a free version then a paid version, or better yet - just a paid version? Granted I've never implemented this model, but as a consumer I don't really want to choose between several options.
Not trying to be cynical, but maybe someone more business savvy than me can explain it.
Trending on Indie Hackers
The book predictably irrational talks about it. It's basically price anchoring. Put something horrifically overpriced next to something normally priced, and the something normally priced seems amazing.
^ this. It's probably the only reason it exists :D
On a serious note, it is indeed price anchoring, and you can find out the features customers are willing to pay for, and add those to your "Premium", more or less.
Makes sense.
The three-tier pricing model is widespread because it caters to different customer needs and budgets. It offers flexibility and allows businesses to capture various market segments. You can learn more about it in this article: SaaS Tier Pricing: How Effective Is This Strategy in 2023?
There are pointless tiered pricing which is tiered for no reason.
Some are tiered to force customer into buying their final tier, I can literally feel these, until I have moved up to their final tier's annual plan there will be persistent popup torturing me to upgrade. I sometimes upgrade just to avoid this headache from popups.
Some have a credit system, like email providers, the higher your monthly subscription the higher your contacts and emails sends.
It actually depends on your intentions of business tho. Free - to get people come in, a lost lead is lost revenue, simply have them for free and they'll like it for the price point. So win-win.
Mid tier - they want your software, the bare essentials.
Third tier - they need your software, website builders for example.
This comment was deleted 3 years ago.
Gotcha, that makes sense.