Why Letting Customers Pay Less Makes More Money

Every customer extracts different value from your product. Usage patterns, team sizes, and priorities vary enormously—and a handful of predefined tiers can only approximate that reality. The approximation works for most customers most of the time, but when it doesn't, the mismatch pushes them toward cancellation. Customers who'd happily keep paying are forced out if you're unwilling to compromise and offer them a middle ground.

The Binary Choice

Tiers bundle features together, and that bundling creates friction the moment a customer's needs don't align with what's on offer. A customer who relies on three features from your Starter plan and one from Professional is stuck. The full tier jump costs more than the single feature is worth to them, so they go without it—or worse, they start wondering whether a competitor offers a better fit. Customers who do make the leap to the higher tier are reminded they're overpaying for features they'll never use every time they receive an invoice.

Both situations push toward cancellation, and the underlying cause is the same. Rigid tiers turn pricing into an all-or-nothing proposition. The customer would happily pay something in between, but "in between" doesn't exist on your pricing page. So they leave.

The Cost of Leaving

Losing a customer costs more than merely the loss in revenue. Acquiring a new customer costs somewhere between five and twenty-five times more than keeping an existing one, with SaaS acquisition costs ranging from a few hundred to several thousand dollars per customer depending on your industry and segment. Every cancellation writes off that investment entirely.

Run the numbers on a specific scenario. A customer on your $149/month Professional plan isn't using half the features in their tier. They cancel. That's $1,788 in annual revenue gone, plus the full acquisition cost sunk. Dropping them to your $49/month Starter tier might not work either—if the features they do use aren't on that plan, there's nowhere to step down. But a tailored plan at $79/month keeps $948 coming in—revenue that continues paying back your acquisition investment rather than evaporating.

And beyond the revenue, you lose the relationship. Once a customer has cancelled, they're back on the open market evaluating alternatives. Winning them back means re-engagement campaigns and win-back offers that eat into your margins—assuming they come back at all. A customer who stays, even at a lower price, keeps your product embedded in their workflow.

Tailored Plans

You could add a fourth or fifth tier, and it might fit some customers better—but there will always be edge cases. More plans also means a more confusing product, making checkout decisions harder and leading to failed conversions.

The solution is tailored plans—arrangements built around what a customer actually uses. Instead of rigid bundles, you treat each feature as a granular entitlement. Your standard tiers are just predefined combinations of those entitlements, and you can recombine them to accommodate whatever deal you need to make.

Someone overpaying for features they don't need gets a plan with entitlements trimmed to their actual usage at a lower price. Someone on a lower tier who needs a single entitlement from the tier above gets exactly that, without paying for everything else bundled alongside it.

The result is a plan that accurately reflects the value the customer receives. Less revenue than a full tier upgrade, more revenue than a cancellation. Your standard tiers stay clean for self-service customers while tailored arrangements happen behind the scenes for those who don't fit the mould.

The Maths

A single month's invoice tells you almost nothing about a customer's value. Revenue across the entire relationship is what matters.

A customer on a tailored plan at $79/month for three years contributes $2,844. A customer who pays $149/month for six months before cancelling contributes $894. The monthly revenue is lower, but the lifetime revenue is often higher. And the Starter customer on $49/month who adds a single feature at $30/month generates $360/year you'd never capture if the only option was a full tier jump to $149.

Multiply that across your customer base. If ten percent of your customers would cancel over a pricing mismatch, and you retain even half of them through flexible arrangements, the numbers compound quickly. Each retained customer is revenue you keep without spending a penny on acquisition. Each one is a customer who stays in your product, benefits from every improvement you ship, and grows with you instead of evaluating your competitors.

Rigid tiers optimise for simplicity at the point of sale. Flexible pricing optimises for the months and years that follow.

The Upgrade Potential

Retained customers on tailored plans are future revenue without further acquisition costs. You've already done the hard work of getting them into your product. They know how it works, their data is there, and switching to a competitor means starting over. Every one of them costs less to keep than to win back or replace.

A tailored plan at a lower price isn't a ceiling—it's a starting point. There's a gap between what the customer pays now and what they could pay as they grow, and that gap is your upside. As their team expands or their needs change, each new requirement is an opportunity to sell them more entitlements.

Tailored Plans, Built into Salable

Salable supports this out of the box. Entitlements are a core primitive — every feature in your product can be packaged, combined, and recombined into whatever plan a customer needs. Create your standard tiers for self-service, then build tailored plans for the customers who don't fit. No custom billing logic, no workarounds. The flexibility is built into the platform.

Customers who can pay less tend to stay longer, and customers who stay longer generate more revenue over time.