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- What are the business considerations when offering a tiered pricing structure vs a flat fee?
- What is tier pricing?
- How do you calculate tiered pricing?
- What is a flat fee example?
What are the business considerations when offering a tiered pricing structure vs a flat fee?
Tiered pricing allows you to segment your users and target your development and support efforts accordingly. With flat rate pricing, you lose the ability to align your pricing with your value metric, since you don't make additional revenue for additional value.
What is tier pricing?
A tiered pricing strategy, or tiered pricing structure, refers to subscription-based services in which customers pay for only the services, features, or quantity they need by choosing from one of multiple “tiers.”
How do you calculate tiered pricing?
For each portion of the total price that falls within a tier, that portion is multiplied by the tier's associated percent value. The result is the sum of each tier's calculation.
What is a flat fee example?
For example, let's say you're a freelance graphic designer and charge a flat rate of $400 for a logo design. Regardless of whether it takes you one hour or 20 to complete, or if a customer asks for multiple revisions, you will take home $400.
