Tiered pricing

A pricing strategy where the cost of a product or service is set at different levels, or tiers, based on various factors such as quantity, quality, features, or customer segments.

Tiered pricing is a pricing strategy where the cost of a product or service is set at different levels, or tiers, based on various factors such as quantity, quality, features, or customer segments.

How to add a product based on tiered pricing in Zenskar

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Important

Refer the products documentation to learn more about the concept of products in Zenskar.

Step 1: Create a product based on tiered pricing

  1. Navigate to Contracts > Products, and click on the ADD PRODUCT button.
  2. Select the Tiered Pricing from the drop-down.
  3. Select or deselect Metered:
    1. If the service or product is metered, select the appropriate usage aggregate from the drop-down.
    2. If the service or product is not metered, enter the quantity.
  4. Fill in all other details, and select all the desired features.
  5. Save the product.

Example: metered product

Details:

  • Computing resources are being sold at:
Number of unitsPrice (USD per hour)
1-990.01
100-2000.005
201-∞0.002
  • Owing to the nature of consumption, this is a metered product.
  • The usage aggregate named Compute is being used to fetch consumption details for a given billing period.

Example: non-metered product

Details:

  • Cereals are being sold at:
Number of unitsPrice (USD per pound)
1-1001.5
101-2001.3
201-∞1.25
  • 500 units are being sold.
  • This is a non-metered product.

Difference between volume and tiered pricing

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Volume versus tiered pricing

Let us assume:

  • you are in the business of selling software licenses
  • you are selling 250 licenses to a particular customer
Number of licensesPrice per unit in USD
1-100100
101-20090
201-∞80

Comparing the total cost of 250 licenses in both the models:

Number of licensesTiered pricingVolume pricing
1-100100 * 100
101-200100 * 90
201-25050 * 80250 * 80
Total2300020000

It is evident that the volume pricing strategy is more beneficial to the customers.