Good-Better-Best Pricing: How to Build Three Tiers That Sell the Middle One

In July 2024, Xero did something most software companies are scared to do. It tore up its Australian price list.

Out went Payroll Only, Starter, Standard and Premium. In came four plans named for the customer's stage: Ignite for new businesses, Grow for the self-employed and growing, Comprehensive for businesses with staff, and Ultimate for those who want forecasting, analytics, expenses and projects. Xero said the new line-up had "more key features included, with fewer plans and add-ons." Customers got at least 60 days' notice.

Then it raised prices, on 1 July 2025 and again on 1 July 2026.

The result? For the year to March 2026, Xero reported 4.9 million subscribers (up 11%) and average revenue per customer up 23%. Revenue per customer grew twice as fast as the customer count.

(To be fair, the share price fell 53% over the same year, as investors worried about costs, margins and AI. Pricing can't fix everything.)

What Xero built is a classic good-better-best ladder. Let me show you how to build one for your business.

What Is Good-Better-Best Pricing?

Good-better-best pricing means offering three versions of your product or subscription at rising prices.

• Good is the entry point. It solves the core problem for price-sensitive buyers.
• Better is the one you want most people to buy. It's built for your typical customer.
• Best is for customers who want everything, and it makes Better look reasonable.

The magic is in the question it changes. With one price, the buyer asks, "Should I buy this?" With three, they ask, "Which one should I buy?" That's a much easier question to say yes to.

It isn't new. Airlines, car dealers and every coffee shop with a small, medium and large have done it for decades. In the book I described New Masters Academy, an art-lesson subscription that split membership into $39 a month for Standard and $49 a month for Premium, with the only difference being access to its reference library of 35,000 images and 3D models. Two tiers. One clear fence. Simple.

Why Three Tiers Work

Three effects make good-better-best sell.

1. Anchoring. The top price sets a reference point. Next to a $78 option, a $42 option feels sensible. Without the $78 option, $42 might be the "expensive" one.

2. The compromise effect. When people aren't sure, they avoid the extremes. The middle feels like the safe choice: not cheap, not extravagant.

3. Self-selection. Different customers value different things. Three tiers let each buyer pick their own price, so you stop forcing one price on everyone. Your small customers aren't scared off, and your big customers aren't getting a bargain.

That last one is the real point. Good-better-best is a way to charge different customers different prices, fairly, by letting them choose.

Real Good-Better-Best Ladders in 2026

Here's how real companies space their tiers, from their pricing pages as checked in October 2026 (monthly prices unless noted).

Two patterns stand out.

First, the middle tier usually costs about two to three times the entry tier in this sample. That's not a law, but it's a useful starting point.

Second, the top tier is stretching, especially for AI products. Consumer AI now runs from $4.99 to $500 a month. Anthropic, Google and SpaceXAI name their top tiers as usage multiples ("5x", "20x") rather than features. When some customers use 20 times more than others, the best tier has to price for it.

How to Build Your Good-Better-Best Ladder

Step 1: Design the middle tier first

Start with your typical customer. What do they need to get the result they came for? That's Better. Price it on the value it delivers, with your cost floor underneath. (If you haven't done that yet, start with how to price a subscription.)

Step 2: Strip it back for Good

Remove things your typical customer wants but a price-sensitive buyer can live without. Lower the limits. Keep the core outcome intact, or Good becomes useless and nobody trusts the brand.

Step 3: Build up for Best

Add what your biggest or most demanding customers ask for: higher limits, priority service, extra users, advanced features, a dedicated contact. Price it high enough to anchor, and make it genuinely worth buying for someone.

Step 4: Fence the tiers with your value metric

The clearest fences are limits on your value metric: users, locations, orders, credits, visits. Add a handful of features on top. Customers understand "up to 5 users" far faster than a 40-row feature grid. Choosing which features go where is a craft of its own, which I cover on packaging.

Step 5: Check every gap

Ask of each step up: "Would a real customer pay this much more for this much more?" If the jump from Good to Better feels like a lot for a little, people will stay on Good.

Worked Example: A Coffee Roaster's Bean Subscription

Here's how the mix can change revenue. (The prices and the customer mix are assumptions for illustration.)

A specialty coffee roaster has 1,000 subscribers on two plans:

• Good: 250g every fortnight, $24 a month
• Better: 500g every fortnight plus free shipping, $42 a month

It adds a third:

• Best: 1kg every fortnight, a rotating single origin, free shipping and 15% off equipment, $78 a month

Will your mix move like that? Maybe, maybe not. That's why you test. Show the three-tier page to a portion of new visitors for a month and compare the mix. You can also pre-test reactions with the Synthetic Customer PanelTest an offer and price on AI-simulated customer personas.Open the free tool → panel before you show real customers.

How to Present Three Tiers on Your Pricing Page

Layout matters almost as much as the prices.

• Put the three side by side, in order, with the middle visually emphasized.
• Lead each tier with who it's for, not a feature list. "For solo operators", "For growing teams", "For multi-site businesses."
• Show the value metric limit first ("up to 5 users", "500g a fortnight").
• Keep the feature list short. Five to eight lines per tier, with the differences obvious.
• Show annual and monthly clearly, and make the saving honest.

One warning for Australian businesses. Don't put a "Most popular" badge on a tier unless it really is the most popular. Under the Australian Consumer Law, a business must be able to back up the claims it makes (ACCC), and that includes claims about savings and popularity. "Recommended" is a safer word if you're steering, not reporting. This is general information as at October 2026. More on the rules in the Australian Consumer Law guide.

For layouts that work, see the perfect pricing page.

When Good-Better-Best Is the Wrong Choice

It's a great default. It's not always right.

• You have one clear type of customer. If everyone needs the same thing, three tiers are noise. A single plan with an annual option is fine.
• Your service can't be split without breaking it. In the book's freemium table, I gave the example of a Netflix with no movies. Some offers lose their point when you remove parts.
• Your customers vary by volume, not features. If the only real difference is how much they use, tiered or volume pricing with bands may be cleaner.
• You're selling custom enterprise deals. Publish Good and Better, then make Best "contact us" if the price genuinely depends on scope.
• You're tempted to add a fourth, fifth and sixth tier. Stop. More choice means slower decisions. Xero went from four old plans plus add-ons to four clearer ones. Fewer, clearer tiers usually win.

What to Do Next

1. Write a one-line description of your typical customer. That's your Better tier.
2. List what a price-sensitive buyer could live without (Good) and what your biggest customers keep asking for (Best).
3. Pick your fence: one value metric limit plus no more than three features per step.
4. Set prices with the middle at roughly two to three times the entry, then sanity-check each gap.
5. Build it in the Pricing Table BuilderDesign a good-better-best pricing table and export it.Open the free tool → and test it on real buyers.

For the full set of pricing decisions, head back to the subscription pricing strategy hub. And if you want to see how Xero did it in detail, read the Xero pricing case study.

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Robert Coorey, MBA

Robert is the author of The Subscription Playbook and Feed a Starving Crowd and a Director at BPAG Accountants in Sydney. More about Robert.