Most users pick your cheapest plan
A premium tier you don't expect many to buy makes your mid-tier look like great value. Classic price anchoring.
When to use
You have 1-2 pricing tiers and most users pick the cheapest. Adding a premium tier can shift the distribution.
Hypothesis template
If we add a fill in: premium tier at fill in: high price, mid-tier conversions will increase by fill in: target% because the premium plan reframes the mid-tier as good value.
Method
The problem: Users compare your mid-tier price to $0 and think "that's expensive." There's no reference point to make it look reasonable.
What The Economist did (famously): Offered three options: digital ($59), print ($125), print+digital ($125). Nobody picked print-only — but its presence made print+digital look like an amazing deal, increasing premium conversions by 43%.
The result: Adding a higher-priced option that's slightly less appealing than your target plan increases target plan conversions by 20-40%.
How to do it:
- Identify which plan you want most users to pick (your "target" plan)
- Add a premium plan priced 2-3x higher with modest additional value
- Make sure the target plan looks like obvious value compared to premium
- Highlight the target plan as "Most popular" or "Best value"
- A/B test the three-tier page against your current two-tier page
- Measure: which plan do users pick? Total revenue per signup?
Key insight: You're not trying to sell the premium plan. You're using it to make the mid-tier feel like a no-brainer.
Success metrics
- •Plan distribution (% picking each tier)
- •Average revenue per user
- •Conversion rate to paid
- •Revenue per pricing page visitor
Prerequisites
- A pricing page you can modify
- Enough traffic to A/B test (100+ pricing page visits/month)
- A plausible premium tier to offer
Common pitfalls
- •Making the premium tier too obviously bad (users see through it)
- •Making the gap between tiers too small
- •Not testing — just launching and hoping
- •Changing too many things at once
Source: The Economist. The famous "decoy effect" study — adding an inferior option increases premium plan conversions by 43%.
Suggested ICE scores
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