How do you choose names for your pricing tiers (e.g., Starter, Growth, Enterprise), and does the tier name actually impact customer conversion rates?

Below is a summary of our insights from Price to Scale regarding pricing tier names and their impact on conversion rates:

• Direct answer:
Pricing tier names are more than just labels—they are a marketing tool that helps set customer expectations and communicates the value of each offering. The names should be chosen to clearly differentiate the tiers, convey the value proposition, and ideally, reduce customer confusion. Simple, distinct, and evocative names (such as Starter, Growth, Enterprise, or alternatives like Premium and Advanced) can positively impact conversion rates by making the pricing structure easier to understand and more appealing.

• Supporting insights from the book:
As discussed in our pricing strategy book Price to Scale, even small changes like renaming “Pro” and “Elite” to “Premium” and “Advanced” can help customers quickly grasp the differences between plans. The book emphasizes that too many tiers or overly complex naming can lead to analysis paralysis. Simplifying the options and clearly labeling them aligns with better conversion rates, as customers feel more confident in selecting the tier that fits their needs.

• Practical application:
When deciding on names for your tiers, consider:

How each name reflects the underlying value and feature set.
The clarity: will customers immediately understand what each tier offers?
Testing different names to see if a variation leads to improved conversion, especially when paired with a simplified structure.

• Summary:
In Price to Scale, we highlight that while the specific names of your pricing tiers aren’t the only factor in driving conversions, they play a critical role in how customers perceive and choose between the packages. Clear, simple, and value-driven tier names not only prevent confusion but are an important element in a successful pricing strategy.

This approach underscores our overall philosophy that simplicity and clarity in pricing helps drive better customer engagement and conversion rates.