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Estd 4.22.2023
Based on our saas pricing book, Price to Scale, there are two key approaches when naming your pricing tiers:
• Functional Naming (e.g., Basic/Pro/Enterprise):
– This approach is straightforward and widely understood.
– It helps customers quickly grasp the level of service, especially when tiers follow a "Good - Better - Best" model.
– It’s particularly effective for markets with less variance in willingness to pay, such as SMB or mid-market segments where rapid decision-making is crucial.
• Creative Naming that Reflects Your Brand:
– Using distinctive names (for example, renaming “Pro” or “Enterprise” to “Premium” or “Advanced”) can set your offering apart.
– Creative names may align closer with your brand identity and can make pricing feel less like a commodity comparison.
– However, ensure that while the names are creative, they still clearly communicate the differences in features and value, so customers don't feel uncertain about what each tier offers.
In our book Price to Scale (see discussions around tier packaging and naming strategies), the recommendation is to consider both customer expectations and your overall brand positioning. While functional names provide quick clarity, creative names can potentially add a layer of brand differentiation that might better resonate with your specific target audience.
In summary, the best choice depends on your customer segment and brand strategy. Functional names provide clarity and simplicity, whereas creative names can enhance your brand's distinctive identity. Choose the approach that best aligns with your objectives and ensures that the value differences between tiers remain clear to your customers.