Three-Tier Price Points

A pricing strategy focused on optimizing revenue through strategic price points and upsells, based on lessons learned from running a subscription business.

Core Pricing Structure

• Avoid the "dead zone" price point of $300
  • Not cheap enough for impulse buy
  • Not expensive enough for serious consideration
  • Was a "dumb" pricing decision that limited growth

Optimal Three-Tier Strategy

• Entry Level ($99)

  • Makes product an impulse purchase
  • Used to get customers into the sales funnel
  • Should include a few small offerings

• Mid-Tier ($300)

  • Generally should be avoided
  • Falls into awkward price point between impulse and premium

• Premium Tier ($2,000-5,000)

  • Higher-end offering for serious buyers
  • Fewer customers but higher revenue per customer
  • Used as upsell for entry-level customers

Implementation Strategy

• Start with $99 entry point to maximize customer acquisition
• Build trust and demonstrate value with entry product
• Create clear upgrade path to premium offerings
• Focus on converting portion of $99 customers to premium tier
• Use entry product primarily as customer acquisition tool

Key Learning

• Same customers who paid $300 would have paid $1,000+
• Better to polarize pricing between low and high end
• Entry price should optimize for volume and conversion
• Premium price should optimize for maximum revenue per serious customer