Three-tier pricing strategy for SaaS Does It Work? the Best? -
What's the best amount of subscription levels for the SaaS firm?
Study have found that three is the most popular number. But do you think it's the best?
This isn't what we discovered as we analyzed the pricing plans of 50 top-of-the-line SaaS companies in our pricing pages for 2022 report.
We analyzed the pricing pages of 50 businesses which were among the best-rated in their market on G2 and found the number of annual or monthly plans offered varied from zero plans from zero to 23 plans.
From Zero to 23 Plans Top-of-the-line SaaS Companies Customize Their Subscription Choices
Their packaging also varied as much.
"Keep it simple" is a common stipulation for SaaS businesses in terms of pricing and plans, but the subscription offerings for most best-in-class companies are far from straightforward.
In this piece we'll discuss how top-of-the-line SaaS businesses market and package their subscription plans, along with a variety of tiered pricing models.
Three Tiers Doesn't Have to mean simple plans
The three-tier pricing method We typically see:
- A great option for smaller teams, individual users, or new customers trying out the product.
- The middle-tier is used to selling upsells. This is often referred to as the "most popular" or "most economical" alternative.
- The premium-priced plan for those who require more.
While this holds true for how best-in-class companies use a three-tiered pricing model however, the way they present their pricing isn't always that simple.
Price Changes based on the number of Users
In this case, Canva uses three tiers however, the price of each one based upon the amount of people using the site.
Three primary plans to be a Jumping Off Point
Airbase offers three main tiers, but their standalone bill payment option leads you to a different set of plans altogether. Effectively, prospects choose either value-based pricing or volume pricing. This could be a way to allow potential customers to choose what they want to buy.
We suspect that SaaS companies may begin with a basic three-tier structure however their pricing and pricing are bound to become more complicated as their users need change.
Four Is the New Three (But Five Is Popular Too)
Based on our study our research, the median number of plans available is in fact four. There are some common strategies for companies that keep five or four pricing choices.
Three Primary Plans Plus an Enterprise Plan
What's the reason? The idea is to create a middle plan that gives small and medium-sized customers (i.e., the non-enterprise customers) the ideal sweet spot to aim for.
Three Primary Plans as well as Two Enterprise Plans
Some companies like Box have shifted to five plans, which includes two enterprise plans. Why shouldn't enterprise folks have alternatives also?
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 need room to move up into higher levels.
Free Plan and Four Paid Options
Once again, adding a fifth option gives your clients the ability to grow. But when adding more levels, it should be clear exactly what benefits the benefits are of moving to a higher price. In this case, TalentLMS is differentiating based on the number of users.
Think about the idea behind an Idea
While we were looking at pages on pricing for our guide, it wasn't necessarily clear what needs to be considered a monthly or annual price.
One example is that OneTrust Pro uses an A la carte approach to creating a monthly plan.
In the same way, Datadog offers a wide range of plans built around the numerous services offered by Datadog.
Instead of promoting tiers with fixed prices instead, Rippling is the only company that develops custom plans.
A sign that it's the time to reconsider a tiered structure is if you're receiving feedback from potential customers or clients who are paying for features or functionality they don't make use of. The other is if you're selling several products your current customer base are paying for independently.
All in all, we're witnessing top-of-the-line SaaS firms think outside the norm when it comes to their pricing and packaging. And if you're struggling to make the tiered pricing structure you have, it might be an appropriate time to your to look outside the box as well.
Add Plans (and/or Pages) as You Target New Markets
The company ButterCMS provides a wide range of products starting from small businesses to large enterprises. Every primary customer is a different persona with their own strategy. If you're selling to a brand new target market, make sure you've got them on your pricing page before you contact them or begin a marketing campaign.
Take a look at different tabs or pages to target specific Markets
36% of the companies that we examined have multiple pricing pages or tabs in the event that they are serving multiple market segments or have plans for different products.
Tabs, which is similar to what Mailchimp uses, make it simple to see all pricing under one single page, even though they're promoting three distinct product. The tabs offer clear differentiation among their offerings.
HubSpot is taking this one step further with two different tabs with tabs for various products and plans, another for bundles. Sometimes, scaling isn't necessarily about upgrading to the next level. If you're selling multiple products, should it be appropriate to bundle them?
What else are the top-of-the-line companies Explaining Their Plans?
Top-of-the-line companies might use various pricing levels, however we found several popular ways they explain the way they structure their pricing.
Some of the most popular price page features are:
- A FAQ section (72 percent)
- Mentioning plan add-ons (42 percent)
- The most widely-used plan is highlighted (36 percent)