What is differential pricing ?

Differential pricing charges different prices to different customers or segments for the same product based on their willingness to pay or characteristics.

Differential pricing (also called price discrimination) allows vendors to maximize revenue by charging each customer or segment the highest price they are willing to pay. It is implemented through tiered plans, geographic pricing, or negotiated contracts.

Example: A SaaS platform charges startups $50/month, SMBs $200/month, and enterprises $2,000/month for access to essentially the same core product, with minor feature and support differences justifying the pricing spread.

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