What is “Tiered pricing” ?
Tiered pricing is a subscription billing model that offers customers a choice of different pricing tiers, each with different features or levels of service. Each pricing tier has its own set of features and may offer additional benefits at higher pricing levels. This model allows businesses to cater to customers with different budgets and needs, while also generating additional revenue from customers who are willing to pay for more features or services.
The pricing tiers may be structured based on different factors, such as the level of service provided, the number of features included, or the level of customization available.
Cases
5 examples of businesses that use the tiered pricing subscription billing strategy:
- Dropbox: Dropbox offers cloud storage services with tiered pricing options that include a free basic plan, a paid Plus plan with additional storage and features, and a Professional plan for businesses and individuals with even more storage and collaboration features.
- LinkedIn: LinkedIn offers tiered pricing options for its premium subscription service, with different levels of access to features such as advanced search filters, InMail messaging, and profile insights.
- Hootsuite: Hootsuite offers a social media management platform with different pricing tiers for small businesses, teams, and enterprise-level organizations. Each tier offers additional features and capabilities.
- Amazon Prime: Amazon Prime offers a tiered pricing structure, with different levels of access to features such as free shipping, streaming of movies and TV shows, and access to exclusive deals and discounts.
- Squarespace: Squarespace offers a website builder platform with tiered pricing options for individuals, businesses, and e-commerce websites, with additional features such as custom domains, e-commerce tools, and advanced website analytics at higher pricing tiers.