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Frameworks, core principles and top case studies for SaaS pricing, learnt and refined over 28+ years of SaaS-monetization experience.
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Based on our saas pricing book, Price to Scale, introducing a very high-priced “enterprise” or “platinum” tier can indeed serve as an anchoring tool. Here’s how it works and what to consider:
• Direct Answer:
Yes, introducing a high-priced tier can help anchor the perceived value of your product. By offering an option that is significantly more expensive, the other pricing tiers can appear more attractive, making them seem reasonably priced by comparison.
• How It Works (Concepts from Price to Scale):
- In our book (see page 253), we discuss the idea of eventually adding very expensive point products. The rationale is that when you have a high-priced offering—even if it’s targeted to a small segment—it establishes a pricing “ceiling” that can elevate the perceived quality and value of your entire product line.
- This approach ties into the Good, Better, Best model. The high-priced tier acts as a “best” option, establishing a premium benchmark against which the “good” and “better” tiers are compared.
• Practical Considerations:
- The high-priced tier should be designed for a specific segment that truly requires and values the additional features or dedicated service it provides.
- It’s crucial to ensure that the enterprise or platinum tier is not just an arbitrary price hike. Instead, it should offer distinct capabilities, enhanced support, or particular functionalities justified by its higher price point.
- This strategy works best when your customer base includes segments that are sensitive to perceived value, as the anchoring effect helps more price-sensitive buyers see the lower tiers as an attractive middle ground.
• Key Takeaway:
Introducing a high-priced tier can effectively reposition the overall pricing structure by creating an anchor point. However, successful implementation depends on ensuring that the new tier delivers genuine value to those who need it and that it’s aligned with the broader pricing strategy outlined in Price to Scale.
In summary, a very high-priced “enterprise” or “platinum” tier can provide a valuable anchor for customers, enhancing the attractiveness of your other offerings when executed with a clear understanding of customer segments and value delivery.