Maximizing Revenue: Why Ditching Volume Discounts for Tiered Pricing is the Key to Success

Are you offering volume discounts?

Solid strategy, but you're leaving money on the table.

Here's a better way…

Upgrade to a tiered pricingTiered PricingTiered pricing offers multiple plan levels (typically 3-4) at different price points, with each tier including progressively more features, capacity, or support.Read more → strategy and ditch volume discounts!

Here's why: Tiered discounts incentivize larger purchases, allow for more granular pricing, and are easier for customers to understand.

Plus, they can lead to increased Lifetime ValueCustomer Lifetime ValueCustomer lifetime value (CLV) is the total revenue a business expects to earn from a single customer account over the entire duration of the relationship, accounting for expansion, contraction, and churn probability. It is a foundational metric for evaluating pricing, acquisition spend, and customer segmentation.Read more → (LTV) and higher monthly recurring revenue (MRRMonthly Recurring Revenue (MRR)Monthly Recurring Revenue (MRR) is the predictable, normalized monthly revenue a SaaS company earns from active subscriptions. It excludes one-time fees, professional services, and variable overages, providing a clean measure of the subscription business's monthly run rate.Read more →).

Need proof? Check out this comparison:

Both TieredTech Co. and VoluCore Co. offer seats at $100/month. VoluCore offers a 25% volume discount for 300+ seats, while TieredTech offers a tiered 17% discount for 150+ seats and a 25% for 300+ seats.

The result?

With 300 seats, VoluCore gets $22.5K MRR (300 @ 25%), but TieredTech gets $23.7K MRR (150 @ 17% = 12,450 and 150 @ 25% = 11,200). That's a 5% increase in MRR over VoluCore.

TieredTech gives a price break earlier in the customer journey and further incentivizes its customers as they expand.

So, give it a shot - What could a tiered discount approach do for your business? Join the discussion on LinkedIn here.

‍