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Allows companies to offer multiple packages with different features and product combinations available at different price points. The number of packages can vary, but most subscription companies offer two or three pricing tiers.
Beyond two or three options, however, things start to go downhill—offering too many choices leads to indecision and lower sales. It's easy to try appealing to many customer types with varying budgets by adding more and more tiers, leading to a lack of decision and lost sales.
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Companies spend countless hours improving their product, tweaking their positioning, and acquiring new customers. Yet most subscription companies spend precious little time thinking about their pricing.
Data from 512 companies shows that monetization has nearly 2x...
Per-user pricing is the go-to model for the majority of subscription companies. Pricing scales evenly along with the number of users — the more users, the more you can charge.
Charging for each new user ...
Usage-based pricing is somewhat less common among SaaS businesses— it's mainly used by telecommunications companies and IT services.
It makes it easier for small companies to get started with your product while avoiding the high upfront fees charged by some subscription companies. On the ot...
Fixed pricing stays simple: a single product, a fixed set of features, and a fixed price per month.
Flat-rate pricing is easier to communicate and easier to sell. Adding valuable features? Raise your rate. Additional products? The fixed price goes on top of your base fixed rate.
I came across these ideas while reading growth.design case study for Zapier Upgrade: https://growth.design/case-studies/zapier-upgrade
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