3. Tiered pricing model

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3. Tiered pricing model

All your users arenā€™t the same! Tiered pricing is a model where you price your product according to the needs your users have.

Letā€™s see the tiered pricing model of Disney + Hotstar!


Characteristics of tiered pricing šŸµ

  1. The first plan is normally free with limited features.
  2. The plans are arranged in an incremental manner; depending upon the features offered and usage limit. Tiered pricing is often an extension of the freemium model. The first plan is free and the last plan has maximum features and advantages (like unlimited usage access, best streaming quality)

Best practices for tiered pricing šŸ·

  1. Always give your plans a simple/catchy name. e.g:- VIP, Premium, Pro, Basic (Shaktiman šŸ˜)
  2. Donā€™t overwhelm your users with a lot of choices. Show 4 options at max.I would suggest going with 2 to 3 choices as the more choices your users have, the harder it is for them to decide, and in turn, the less likely they are to buy.
  3. Nudge the users with the option you want them to buy. Highlight the plan & show them a copy like POPULAR / RECOMMENDED or keep the plan selected by default which you want to push.
Zomato wants to push ā‚¹20 tip
  1. Keep a clear distinction between the tiers - both in terms of pricing & features.

Understanding tiered pricing in a nutshell šŸ™‰

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