Three-Tier Pricing Strategy for SaaS is It Perfect? -
What's the best amount of subscription tiers to a SaaS firm?
Research studies have found that three is the most common number, however does it really matter?
This isn't what we discovered as we analyzed the pricing strategies of 50 most competitive SaaS businesses for our 2022 pricing pages report.
We studied the pricing pages of 50 businesses which were among the best-rated by G2 and discovered that the amount of monthly or annual plans available varied from zero up to 23.
From 0 to 23 plans, Best-in-Class SaaS Companies Customize Their Subscription Options
The packaging of their products varied as.
"Keep things simple" is the standard advice given to SaaS firms when it comes to pricing and plans. But the subscription options offered by the majority of top-of-the-line companies aren't easy to understand.
In this piece we'll discuss how best-in-class SaaS companies promote and package their subscription packages, with many tiered pricing examples.
Three Tiers doesn't have to Mean Simple Plans
In the three-tier pricing strategy We typically see:
- It is the cheapest choice for small teams, individuals, or new customers trying to test the service.
- The middle tier used for sales and upsells. It's often highlighted as the "most well-known" or "most economical" alternative.
- A premium plan designed for people who require more.
This is true of the best companies that use a three-tiered pricing model but their approach to pricing may not be straightforward.
Price Changes based on the number of Users
For instance, Canva uses three tiers but changes the pricing of each tier based on the number of users.
Three primary plans as a Jumping Off Point
Airbase promotes three primary levels, however their separate bill payments option takes users to an entirely separate set of plans. In essence, customers can choose between value-based pricing or volume pricing. This is one way to give potential customers the option of choosing which price they'd like to buy.
We believe that SaaS businesses may start with a simple three-tier approach, but the pricing and packages are bound to become more complex as their clients require changes.
Four is the new Three (But Five is also popular)
According to our analysis our research, the median number of pricing plans actually is four. However, there are several most common methods for businesses that maintain four or five pricing choices.
Three Primary Plans and an Enterprise Plan
Why this works: It allows you to market middle plans that gives small or medium-sized clients (i.e., the non-enterprise customers) that ideal point to aim for.
Three Primary Plan and two Enterprise Plans
A few companies, like Box are moving to five plans, including two enterprise tiers. So why shouldn't business users have alternatives too?
Free Plan plus Three Paid Options
If you're using a freemium model, then four different pricing points may be a good idea. Paid customers must have the ability to grow into higher tiers.
Free Plan Plus Four Paid Options
Again, adding a fifth option allows your customers the ability to grow. However, when you add more tiers, it needs to be very clear on what the benefits are of making the move to a more expensive price. This is because TalentLMS is differentiating based on the amount of users.
Think about the idea behind an Idea
While we were looking at pricing pages for the guide, it wasn't always straightforward what should be taken into consideration as a month-to-month or an annual price.
One example is that OneTrust Pro uses an an a-la carte approach to creating an annual plan.
Similarly, Datadog offers a wide number of plans based on the numerous services offered by Datadog.
Instead of marketing tiers using fixed prices, Rippling does not promote tiers with set prices, but offers customized plans.
A sign that it's the time to reconsider a tiered system is when your prospects are expressing concerns or users that they're paying for different features or functionality they don't make use of. A different sign is when you've got different products which your current clients are buying independently.
In general, the top-of-the-line SaaS businesses think outside of the norm when it comes to pricing and packaging. And if you're struggling to optimize the structure of your pricing tiered It's an appropriate time for to to look outside the box as well.
Plan Additions (and/or Pages) in the event that You Target New Markets
An organization like ButterCMS covers the market all the way from start-ups to enterprises. Each persona's primary comes with their own plans. If you're selling to a new target market, make sure you've got them on your pricing page before making contact with them or launching an advertising campaign.
Consider Different Pages or Tabs that are geared towards specific Markets
36% of the companies we studied utilize multiple pricing pages or tabs for multiple markets or have separate pricing plans for different items.
Tabs, similar to the ones Mailchimp makes it possible to view the entire price on one page -- even though they're selling three unique product. Tabs clearly differentiate between their products.
HubSpot takes this a step forward with two levels of tabs: one for different products and plans, one for bundles. Sometimes, it's not necessary to upgrade to the next level. If you're selling multiple products, is it appropriate to bundle them?
What else are the top-of-the-line companies Explaining Their Plans?
The top companies can use diverse pricing structures, but we found several popular ways to explain how their pricing works.
A few of the most popular price page features are:
- An FAQ section (72%)
- Add-ons to the plan that are mentioned (42%)
- Highlighting the most popular plan (36 percent)