Newsletter · short read
Your pricing is (probably) broken: Here's how to fix it
Kyle Poyar · Growth Unhinged Free Intermediate
Takes the three models most companies use (flat fee, feature tiers, per seat), names how each one fails, and gives specific repairs like price escalators, fair use policies and lite user seats. Diagnostic rather than inspirational.
- A premium tier priced 50 to 100 percent higher typically gets 15 to 25 percent uptake, worth roughly 15 percent more revenue.
- One in three B2B contracts carries an automatic price escalator, usually 5 to 8 percent a year.
- Ship 1 or 2 new features a year as standalone add-ons, then bundle them into packages about every 18 months.
- A lite seat usually prices at 10 to 40 percent of a power user seat.
- Good, Better, Best leaks revenue because almost everyone defaults to the middle tier.