TL;DR
A single price forces one choice; tiers let different users pick what fits. Package your features into a small free or cheap tier and a paid tier or two, make the value gap obvious, and use an annual plan to lift revenue. Keep it to a few clear options, not a confusing menu.
A single flat price makes everyone say yes or no to the exact same thing. Some people would happily pay more for extra features; others would only start if there were a cheaper way in. Tiers and bundles solve both. Done well, they let more people buy while quietly lifting how much your best users pay, and they feel fair because everyone picks the plan that fits them.
Start with a clear entry tier
Your first tier is the door. It can be a free tier with a paywall on the good stuff, or a low monthly price that gets people in. The job of the entry tier is to remove the reason to say no, so keep it simple and genuinely useful. If the free or cheap tier is worthless, people never experience the app enough to want to upgrade.
Add an annual plan to lift revenue
Alongside a monthly price, offer an annual plan at a discount, often two months free compared to paying monthly. Annual plans lift your revenue per user, smooth out your income, and keep people around longer because they have committed for the year. Many apps make the annual plan the highlighted option on the paywall precisely because it is the better deal for both sides.
- A free or low entry tier that removes the reason not to try.
- One clear paid tier that unlocks the feature people actually want.
- An annual version of the paid tier at a discount to lift revenue and retention.
- At most one premium tier above that, only if a real group of users needs more.
Price each tier against its own value
Do not just multiply the entry price. Price the paid tier against what its features are worth to the person who needs them, and price the annual plan as a genuine discount on the monthly. Each tier should stand on its own value, so a user at any level feels they got a fair deal rather than a number you picked to fill out a table.
Test your tiers on real users the same way you test a single price. Watch how many people pick each plan and whether anyone upgrades. If nobody moves to the paid tier, the value gap is not clear enough; if everyone picks the cheapest option, your good features may be sitting on the wrong side of the paywall. Adjust with RevenueCat and let the choices people make guide the packaging.
Common questions
Why offer tiers instead of one price?
Because different users value your app differently. A single price forces one yes-or-no choice, while tiers let a budget user start cheap and a power user pay more for extra features. Done well, tiers get more people in the door while lifting how much your best users pay.
What should my entry tier be?
Either a free tier with a paywall on the good stuff, or a low monthly price that removes the reason to say no. Its job is to get people using the app enough to want more. Keep it genuinely useful, since a worthless entry tier means people never experience the value they would upgrade for.
How big should the gap between tiers be?
Big enough that the upgrade is obvious. If the paid tier only removes a small limit, few people pay. If it unlocks the feature people actually came for, the upgrade sells itself. Put the headline value on the paid tier and keep the entry tier a real taste, not a crippled version.
Should I offer an annual plan?
Yes, in most cases. An annual plan at a discount, often two months free versus monthly, lifts your revenue per user, smooths your income, and keeps people around longer. Many apps highlight the annual plan on the paywall because it is the better deal for both sides.
How many tiers should I have?
Keep it short: an entry tier, one clear paid tier, and an annual version of it. Add a premium tier above that only if a real group of users needs more. A long menu of plans confuses people and hurts conversion more than it helps.
How do I price each tier?
Price each tier against its own value, not by multiplying the entry price. The paid tier should reflect what its features are worth to the person who needs them, and the annual plan should be a genuine discount on the monthly. Then test on real users and adjust with RevenueCat.
Keep going
Package your app into tiers that sell themselves
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