What is a key feature of Tiered Billing?

Tiered Billing is characterized by its pricing structure that adapts based on usage thresholds. This means that as a customer uses more of a service, they may move into higher tiers of pricing. Each tier has a specific rate, and customers benefit from lower costs per unit as they reach higher levels of usage within that tier system. This approach encourages higher usage by rewarding customers with reduced rates as they consume more services, making it more economical for users who consistently exceed lower usage thresholds.

Unlike flat rates that apply regardless of usage, tiered pricing provides a nuanced and flexible method for pricing, benefiting both the provider and the customer. It allows businesses to effectively monetize additional use without charging a flat fee for all customers, which could result in inefficiencies and dissatisfaction for those who use services more or less than average. By having tiered pricing, businesses can attract a wider customer base, as potential users can gauge their potential costs based on their anticipated usage levels.