Back to Revenue Systems
Section 5 · Pricing Strategy
Three Tiers + One Anchor = Higher Average Revenue Per Customer
Pricing psychology decides which tier most people pick. Design it on purpose.
Pricing
Revenue
Why it works
A single price forces yes/no. Three tiers reframe the decision to which one — and most buyers go middle.
Connects to
Pricing
Revenue
When to use it
Subscriptions, SaaS, courses, productized services.
When NOT to use it
Don't tier for the sake of it — three weak tiers convert worse than one strong offer.
How to use it
- Tier 1 (Starter): low-friction entry, removes a single objection.
- Tier 2 (Most popular): the offer you want most people on. Mark it 'recommended'.
- Tier 3 (Premium): an anchor priced 2-4× tier 2 — makes tier 2 feel like a deal.
- Add an annual plan at ~17% discount to lock retention.
Examples
Notion
Free → Plus → Business → Enterprise. Most teams pick Business.
Basecamp
One simple flat $99/mo offer — counter-example, works because of brand.