Tiered pricing
Concept
Section titled “Concept”Tiers are one of the levers available to broaden your modeling possibilities. They allow you to implement progressive pricing using different tiers and calculation models.
There are tiers:
- with included quantities (free)
- with billed quantities
Among the advanced pricing options, you can choose to implement tiered pricing or volume-based pricing.
Examples:
Section titled “Examples:”Unit-based Calculation Model
Section titled “Unit-based Calculation Model”1. An offer includes 2 licenses. For any additional licenses beyond 2, the price is €15 per month per unit.
Additional tiers can be created:
| Tier | Min Quantity | Max Quantity | Unit Price |
|---|---|---|---|
| 1 | 2 | 5 | €15 |
| 2 | 6 | 10 | €12 |
| 3 | Above 10 | (No limit) | €8 |
1st Tier - The addition of the 3rd, 4th, and 5th licenses will be billed at €15 per month per unit.
2nd Tier - The addition of the 6th, 7th, …, and 10th licenses will be billed at €12 per month per unit.
Last Tier - Any licenses added beyond 10 will be billed at €8 per month per unit.
- Tiered Pricing: For the addition of 12 licenses, the billed price will be: (3 * 15) + (5 * 12) + (2 * 8) = €121
- Volume-based Pricing: For the addition of 12 licenses, the billed price will be the price of the last tier reached: 12 * €8 = €96
Lot-based or Flat-rate Calculation Model
Section titled “Lot-based or Flat-rate Calculation Model”In ProAbono, it is possible to define price calculation properties within a tier. This adds a new dimension to how features are billed.
Prices can be defined as:
- Unit-based
- Lot-based
- Flat-rate per tier
2. An offer includes 2 licenses. For any additional licenses beyond 2, the licenses will be billed in different ways.
| Tier | Min Quantity | Max Quantity | Option 1 Unit Price | Option 2 Price per lot of: | Option 3 Flat-rate Price |
|---|---|---|---|---|---|
| 1 | 2 | 10 | €15 | 2 = €25 | €99 |
| 2 | 11 | 26 | €12 | 4 = €40 | €149 |
| 3 | Above 26 | (No limit) | €8 | 10 = €69 | x |
Option 1:
It is possible to use unit-based pricing:
1st Tier - The addition of the 3rd, 4th, …, 9th, and 10th licenses will be billed at €15 per month per unit.
- Tiered Pricing: For the addition of 36 licenses, the billed price will be: (8 * 15) + (16 * 12) + (10 * 8) = €392
- Volume-based Pricing: For the addition of 36 licenses, the billed price will be the price of the last tier reached: 36 * €8 = €288
Option 2:
It is also possible to imagine lot-based pricing:
1st Tier - Here, licenses are added in multiples of 2. The addition of the 3rd and 4th licenses will be billed at €25 per lot of 2.
- Tiered Pricing: For the addition of 36 licenses, the billed price will be: (4 lots * 25) + (4 lots * 40) + (1 lot * 69) = €329
- Volume-based Pricing: For the addition of 36 licenses, the billed price will be the price of the last tier reached: 4 lots * €69 = €276
Option 3:
Finally, it is also possible to implement a flat-rate pricing for the tier:
1st Tier - Regardless of how many licenses are added within this tier, the price of the tier will be billed at €99 per month.
- Tiered Pricing: For the addition of 24 licenses, the billed price will be: €99 + €149 = €248
- Volume-based Pricing: For the addition of 24 licenses, the billed price will be the price of the last tier reached: €149
In these examples, it can be observed that different pricing methods can be defined for each tier, providing flexibility in billing quantities