How to set good, better, best prices
- Enter what it costs you to serve one customer each month and a realistic estimate of the value they get, in money saved or earned.
- Optionally add your main competitor's price, then choose how many tiers you want, how big the step between them is, and the annual discount.
- Review the suggested prices, margins and annual prices, then adjust them to fit your features and market.
How tiered pricing works
Offering two to four plans lets different customers pay for what they value, and the existence of a higher tier makes the middle one look reasonable, an effect known as anchoring. Most buyers choose the middle option, so that is where you should put the features most customers need and the price you most want to sell. Steps of two to three times between tiers make each upgrade feel like a clear jump in value. A free tier can drive sign-ups but costs money to support, so only include one if it leads people to paid plans.
The calculator uses a value-based rule of thumb: charge no more than a fraction of the value customers receive, often 10–20%, and no less than several times your cost to serve, so you have margin for support, sales and growth. Prices ending in 9 tend to feel cheaper for consumer products, while round numbers suit premium and business pricing. Annual plans with about two months free (17%) improve cash flow and retention. Treat the results as a starting point, talk to customers about value, and test. Calculated in your browser.
How many pricing tiers should I have?
Three is the most common: it gives choice without confusion. Two can work for simple products; four if you include a free or enterprise plan.
What annual discount is typical?
15–20%, often framed as "two months free" (about 17%).
Should prices end in 9?
For consumer products it often helps. For premium or business products, round numbers can feel more confident.