Three-Tier Pricing Strategy for SaaS is It Perfect? -
What's the optimal amount of subscription levels for an SaaS company?
Research studies have shown that 3 is the most popular number, but does it really matter?
We didn't find that in our analysis of the pricing policies of fifty best-in-class SaaS firms for our 2022 pricing pages report.
We analyzed the pricing pages of fifty businesses that were among the highest-rated on G2 and discovered that the amount of annual or monthly plans that were offered ranged from no plans to 23.
From zero to 23 plans Top-of-the-line SaaS Companies Customize Their Subscription Options
The packaging of their products varied as.
"Keep things simple" is common advice for SaaS firms in terms of pricing and plans. However, the offerings of subscriptions for top-of-the-line companies aren't simple.
In this post we'll examine the best practices used by top-of-the-line SaaS companies promote and package their subscription packages, with a variety of tiered pricing models.
Three Tiers Don't Need to be a Simple Plan
The three-tier pricing method We typically see:
- A great option for smaller groups, singles and new customers who want to try out the product.
- The middle-tier is used to upsells. It's often highlighted as the "most well-known" or "most economical" choice.
- A premium plan designed for people looking for more.
Although this is the case for how best-in-class companies use the three-tiered pricing system but their approach to pricing may not be straightforward.
Price Changes based on the number of Users
In this case, Canva uses three tiers but changes the pricing of each one based upon the number of users.
Three Primary Plans as a Jumping Off Point
Airbase offers three main tiers, but their standalone bill-pay option will take users to an entirely separate set of plans. In essence, customers can choose either value-based pricing or volume pricing. This can allow potential customers to choose the price they would like to buy.
We suspect that SaaS businesses could begin with a simple three-tier approach however the pricing and packages, by necessity, grow complex as their customers require changes.
The New Three is Four. (But Five is also popular)
Per our research The average amount of plans available is in fact four. There are some most common methods for businesses that keep five or four pricing choices.
Three Primary Plans plus an Enterprise Plan
The reason this is effective: It allows you to market middle plans and give the smaller or medium-sized clients (i.e., the non-enterprise customers) the ideal sweet spot to target.
Three Primary Plans and Two Enterprise Plans
Some companies like Box are graduating to five plans, including two enterprise plans. What's wrong with enterprise users having choices as well?
Free Plan plus Three Paid Options
If you're using an unpaid model, the four pricing options seem reasonable. Paid customers must have the ability for growth to higher levels.
Free Plan and Four Paid Options
Again the fifth choice allows your customers more room to scale. But when adding more tiers, it needs to be extremely clear what the benefits are of switching to a higher cost. In this instance, TalentLMS differentiates based upon the number of customers.
Think about the idea behind the Plan
While we were looking at price pages to create the guide, it was not necessarily clear what needs to be classified as a annual or monthly price.
For instance, OneTrust Pro uses an an a-la carte way of making a monthly plan.
Similarly, Datadog offers a wide variety of plans that are based on the numerous services offered by Datadog.
Instead of marketing tiers using price-based plans Instead of promoting tiers with set prices, Rippling is the only company that develops custom plans.
One sign it might be an opportunity to review a tiered model is if your prospects are expressing concerns or clients that they're paying for different features or functionality they don't utilize. A different sign is when you've got different products which your current customer base are paying for separately.
Overall, we're seeing best-in-class SaaS companies think outside the norm when it comes to their pricing and packaging. If you're trying to make the tiered pricing structure you have Perhaps it's time to you to think outside the box as well.
Add Plans (and/or Pages) as You Target New Markets
A company like ButterCMS covers the market from startups to enterprise-level companies. Each primary persona comes with their own plans. If you're trying to sell to a different audience, ensure that they're represented on the pricing page prior to you make contact or start a marketing campaign.
Consider Different Pages or Tabs that are geared towards specific Markets
36% of the businesses which we researched use tabs or pricing pages with multiple prices in the event that they are serving multiple different markets, or offer separate plans for various products.
Tabs, similar to the ones Mailchimp makes it easy to still see the entire price on one single page, even though they're promoting three distinct product. Tabs clearly differentiate between their products.
HubSpot is taking this one step forward with two levels of tabs with tabs for various products and plans, one for bundles. Sometimes, it's not necessary to upgrade to the next level. If you're offering multiple products, is it time to bundle them together?
How Else Are Best-in-Class Companies Explaining Their Plans?
Top-of-the-line companies might use diverse pricing structures, but we have found a variety of ways to explain how they calculate their prices.
A few of the most popular selling features on the pricing page are:
- An FAQ section (72%)
- Add-ons to the plan that are mentioned (42%)
- This is the plan that has the highest popularity (36%)