What is Tiered Pricing
Tiered pricing is a strategy where the cost of a product or service is divided into different levels or tiers, each associated with specific usage ranges, features, or benefits. Customers are charged based on the tier that matches their consumption or service needs. This approach is widely used in industries such as software as a service (SaaS), telecommunications, cloud services, and utilities to address diverse customer needs and usage patterns.
In a tiered pricing model, a provider sets up several predefined tiers, each with its unique set of features, limits, and prices. For example, a cloud storage service might have a basic tier offering up to 10 GB of storage for $5 per month, a standard tier with 50 GB for $15 per month, and a premium tier with 200 GB for $30 per month. Customers can choose the tier that best fits their needs and budget.
This strategy offers flexibility for customers, allowing them to select a plan that closely aligns with their requirements and budget. Customers can start with a lower tier and upgrade as their needs grow, providing a scalable solution that adapts to changing demands. For providers, tiered pricing optimizes revenue by capturing more value from customers with higher usage or greater needs. It also simplifies the buying decision by clearly differentiating the levels of service available, helping customers understand the value proposition of each tier.
Implementing tiered pricing requires careful consideration of the features and benefits associated with each tier to ensure they meet customer expectations and provide perceived value. Providers need to clearly communicate the differences between tiers and the benefits of upgrading to higher levels, which can drive higher customer satisfaction and increased sales. Moreover, monitoring and analyzing customer behavior and feedback can help refine the tiers over time, ensuring they remain competitive and aligned with market demands.
Overall, tiered pricing is an effective way to offer a range of options that cater to different customer needs while optimizing revenue and providing a clear and flexible pricing structure.
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Absorption Pricing
Accounts Receivable
ACH
Advance Billing
AI Agent Pricing
AI Model Pricing
AI Token Pricing
AISP
ARR
ASC 606
Automated Investment Services
Automated Invoicing
Basing Point Pricing
Basket-based Pricing
Billing Cycle
Billing Engine
Captive Product
Channel Incentives
Channel Pricing
Choke Price
Churn
Clearing and Settlement
Commercial Pricing
Competitive Pricing
Consolidated Billing
Consumption Based Pricing
Contribution Margin-Based Pricing
Conversation Based Pricing
Cost Plus Pricing
Cost-Based Pricing
CPQ
Customer Based Pricing
Customer Profitability
Deal Management
Deal Pricing Guidance
Deal Pricing Optimization
Decoy Pricing
Deferrred Revenue
Digital Banking
Discount Management
Dual Pricing
Dunning
Dynamic Pricing
Dynamic Pricing Optimization
E-invoicing
E-Money
EBIDTA
Embedded Finance
Enterprise Resource Planning (ERP)
Entitlements
ERP
Feature-Based Pricing
Finance AI
Fintech
Fintech Ecosystem
Flat Rate Pricing
Freemium Model
Frictionless Sales
Generative AI Pricing
Grandfathering
Guided Sales
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High-Low Pricing
Hybrid Pricing Models
Idempotency
IFRS 15
Insurtech
Intelligent Pricing
Invoice
Invoice Compliance
KYC
Lending-as-a-Service (LaaS)
Lifecycle Pricing
Loss Leader Pricing
Margin Leakage
Margin Management
Margin Pricing
Marginal Cost Pricing
Market Based Pricing
Metering
Micropayments
Minimum Commit
Minimum Invoice
MRR
Multi-currency Billing
Multi-entity Billing
Neobank
Net Dollar Retention
Odd-Even Pricing
Omnichannel Pricing
Open Banking
Outcome Based Pricing
Overage Charges
Pay What You Want Pricing
Payment Gateway
Payment Processing
Peer-to-peer Lending
Penetration Pricing
PISP
Predictive Pricing
Price Benchmarking
Price Configuration
Price Elasticity
Price Estimation
Pricing Analytics
Pricing Bundles
Pricing Efficiency
Pricing Engine
Pricing Software
Product Pricing App
Proration
PSD2
PSP
Quotation System
Quote Request
Quote-to-Cash
Quoting
Ramp Up Periods
Real-Time Billing
Recurring Payments
Region Based Pricing
RegTech
Revenue Analytics
Revenue Backlog
Revenue Forecasting
Revenue Leakage
Revenue Optimization
Revenue Recognition
SaaS Billing
Sales Enablement
Sales Optimization
Sales Prediction Analysis
SCA
Seat-based Pricing
Self Billing
Smart Metering
Stairstep Pricing
Sticky Stairstep Pricing
Subscription Management
Supply Chain Billing
Tiered Pricing
Tiered Usage-based Pricing
Time Based Pricing
Top Tiered Pricing
Total Contract Value
Transaction Monitoring
Usage Metering
Usage-based Pricing
Value Based Pricing
Volume Commitments
Volume Discounts
WealthTech
White-label Banking
Yield Optimization
Why Solvimon
Helping businesses reach the next level
The Solvimon platform is extremely flexible allowing us to bill the most tailored enterprise deals automatically.
Ciaran O'Kane
Head of Finance
Solvimon is not only building the most flexible billing platform in the space but also a truly global platform.
Juan Pablo Ortega
CEO
I was skeptical if there was any solution out there that could relieve the team from an eternity of manual billing. Solvimon impressed me with their flexibility and user-friendliness.
János Mátyásfalvi
CFO
Working with Solvimon is a different experience than working with other vendors. Not only because of the product they offer, but also because of their very senior team that knows what they are talking about.
Steven Burgemeister
Product Lead, Billing