How many pricing tiers should we offer – is it best to start with a single plan or multiple tiers even at launch?

Based on our saas pricing book, Price to Scale, many successful SaaS companies start by offering multiple pricing tiers rather than a single plan. Here are some key takeaways:

• Multiple tiers, often in the form of a “Good-Better-Best” structure (typically 2–3 options), allow you to map distinct packages to different customer segments. This lets you tailor feature sets and price points to match varying needs and willingness to pay.

• A tiered approach works particularly well when your market comprises segments with differing expectations—for example, SMBs versus enterprise customers. It provides the flexibility to capture a broader audience while addressing core use cases for each segment.

• That said, it’s important to ensure that your tiers are well thought out. Simply dividing features into separate packages without deeply understanding the value each segment derives can lead to mismatches between customer needs and the pricing model.

In summary, while a single plan might simplify early operations, our book generally endorses a multi-tier approach (around two to three tiers) as a best practice, provided you have clearly defined customer segments and value propositions. This strategy not only caters to a broader customer base but also supports more strategic pricing alignment with growth objectives.