Tiered with Overage Pricing

 What is Tiered Pricing?

Tiered pricing is a popular model that can be used to price subscription-based products and services particularly SaaS products. 

To create tiered plans such that each corresponds to different features tied to a flat fee, create separate flat fee plans using this guide.

What is Usage-Based Tiered Pricing?

Inside SubscriptionFlow, tiered pricing is tied to usage based charge types. You can set a flat fee or a per unit fee that corresponds to different tiers. Let’s say a mobile phone plan offers three tiers of data usage to the customers.

The first tier covers usage from 1-5 GB with a fixed cost of USD 2.99.

The second tier lets you use up to 10 GBs and costs USD 4.99.

You can have as many tiers as you wish in your tiered pricing strategy.

What is Overage Pricing?

Overage pricing sets a threshold for usage after which each unit is charged an overage price. For example, after the first 5 GBs, every GB of usage can be priced at USD 1.99/GB.

What is Tiered with Overage Pricing?

Combining tiered with overage lets you price per unit when usage exceeds your predefined tiers. Let’s take a look at the previously defined tiers for cellular data usage.

1-5 GB -> USD 2.99

5-10 gb -> USD 4.99

Anything that goes over 10 GBs can be priced as overage at the rate of USD 1.99/ GB.

This guide walks you through the process of setting up tiered pricing as well as tiered with overage pricing. 

Tiered Usage with Overage Charges inside SubscritpionFlow

1. From your dashboard go to Products and click on ‘Create Product’.

2. Name the product and plan.

3. Choose your charge type i.e. usage charge in this case.

4. Select Tiered Pricing.

5. Select billing frequency. In this case we choose monthly billing.

6. Next, design your tiers. Select a usage range and assign it a flat fee or per unit charge.

7. Add as many tiers as you want. Click taxable if you wish to select any preconfigured taxes. Learn how to manage taxes in this guide. Then save your pricing configuration.

8. Click on ‘+ Pricing’ to add overage pricing in combination with the tiered pricing configuration. 

9. Select Usage charge.

10. Select Overage Pricing.

11. Add the list price i.e. the price per unit when the user exceeds the included units quantity. Also specify the included units. In this case, the included units would correspond to the upper limit of the highest tier. Then save the pricing.

12. Your tiered with overage pricing configuration is now set up. Click Save.

13. A green pop-up notification will appear at the top right-hand corner of the screen, indicating that the pricing plan has been saved successfully.

14. You will be redirected to the detailed product view where you can see the newly created plan with tiered usage with overage pricing.

And that is how you set up tiered with overage pricing.