Definition
Tiers are pricing levels that bundle features or usage limits to segment customers.
Why it matters
Tiers guide upgrades and align pricing with value. Poor tiering causes bill shock or underpricing.
Pricing implications
Use tier breakpoints based on usage distribution (p50, p75, p90) and value differentiation.
Measurement tips
Track upgrade, downgrade, and churn rates by tier.
Checklist
- Define clear tier differentiation.
- Use usage data to set tier breakpoints.
- Publish example bills per tier.
- Avoid too many tiers without clear value.
- Track migration between tiers.
- Review tiers after pricing changes.
- Align tiers with sales packaging.
- Update tiers quarterly.