Tag Archives: transaction

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Tiered Pricing Model Guide

Tiered pricing is a method where you will sell items and provide quantity discounts to your customers. While it sounds like volume pricing, it operates differently from that format.

Tiered pricing entails a product or service being priced within a segment or range it supports. The price per unit will drop when each quantity in a tier is sold.

The process also works for services. You can offer multiple tiers of something and charge more for tiers that provide more functions for people to use.

Tiered pricing is popular among manufacturers, wholesalers, and others that sell bulk quantities of different items for sale. Software-as-a-service providers also use this model to help them sell what they are providing to clients.

An Example of How Tiered Pricing Works For Product Sales

Here’s an example of how a tiered pricing platform works when selling products:

  1. You can charge $100 for the first unit of an item you sell and then $90 for the second to fifth units of that item. The price drops to $80 from the sixth unit onward.
  2. A customer wants to buy ten units of that item.
  3. You’ll charge $100 for the first item, $360 total for the next four, and $400 for the remaining five. You’re charging $90 each for the second to fifth items and $80 for the ones after that fifth unit.
  4. The customer will pay $860 for the ten items.

The customer is paying $86 per item for the ten units. Meanwhile, if the customer only needed three items, that person would spend $280 on the entire purchase. It would cost about $93 per unit in this case. The customer is saving money by buying more items at a time.

Get a Greater Profit on Product Sales

You will enjoy a more substantial profit through a tiered pricing platform than if you offered a volume discount. While you could cut the price per item for something when a customer orders more units, you’re risking a substantial drop-off in how much you earn in a transaction. A customer could buy the bare minimum number of items to reach one pricing tier, for instance. Your business won’t receive as much money on a volume discount as if you offered a tiered pricing system.

How Tiered Pricing Works For Services

Tiered pricing is good for more than offering multiple products for sale. You can also use tiered pricing when selling services to people. You could sell monthly or annual access to something like a subscription-based club, an online service, or anything of value. But the features your customers will access will vary over how much they spend each month or year.

For example, a hosting company can offer a package for $20 a month where a customer will get access to a website and a specific amount of disk space or bandwidth. But that person can also pay $40 a month to handle three websites and an unlimited amount of disk space and bandwidth.

The customers will spend more money to get access to more features and services. You can plan your tiered pricing plan surrounding the values you wish to highlight for whatever you provide.

What Makes Tiered Pricing Useful?

Tiered pricing is beneficial for how it is flexible and affordable. Customers can switch between different tiers as necessary, or they can plan their purchases surrounding what tiers work. Businesses can also adjust the values of each tier based on what is profitable and what will help cover their operations.

Tiered pricing also targets more audiences. A business can produce tiers for high-value clients or for those who don’t want to spend as much money on things.

You can also use tiered pricing to upsell things to people. You can promote better deals for buying more items or for subscribing to high-value tiers that offer more things of use.

Planning Your Tiered Pricing the Right Way

You can establish a better tiered pricing platform by using a few steps:

  • Create some differentiation between whatever tiers you offer. The customers should recognize a difference between each tier.
  • Look at the possible customers for each tier. Plan your tiers over what customers are more likely to use them.
  • Provide a sensible pricing alignment plan for each tier you produce. A tier that offers twice the benefits of a lower one if it costs twice as much, for example.
  • Review the profit margins you’ll get for whatever items you will sell through a tiered pricing platform. The reduced prices for each tier should be useful to the customer while still being affordable.
  • Every tier you provide must have a reasonable explanation that highlights everything it has to provide to the customer. The potential buyer should see some benefit with whatever tier one wants.
  • You can create names for each tier, but the names should be reasonable and descriptive. They can include points surrounding what makes a product or service useful, or if the value of something is reasonable enough.

Is This Better Than Volume Pricing?

The potential profits and simplicity of tiered pricing make it an ideal choice versus volume pricing. But it may not always be the right choice. Volume pricing is best if you have a significant amount of product you’re trying to unload soon. It could also work if you need to sell items that are in low demand due to seasonal or economic concerns. Customers might be more interested in these products if they know they can spend less on them.

In other cases, tiered pricing is the way to go. Tiered pricing gives you a greater opportunity to make money from people and to encourage them to spend extra with you. You can plan whatever tiers you want when selling things to people. But be certain whatever tiers you prepare are reasonable enough and that you have a plan for making them work well, especially when running a suitable solution that can attract more people.

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How Businesses Should Prepare For a Data Breach [2023 Update]

You might not want to think about it, but there is always a potential your business could be hit by a data breach. The info you keep on your customers, your finances, and other sensitive factors could be at risk of being lost. You can prepare for a data breach if you look at how you’re managing your business and how you recognize whatever may work at any moment.

Establish a Relationship With Your IT Department 

what is a data breach

The first way to prepare for a data breach is to look at how your IT department operates. Most businesses assume their IT departments are all about keeping their websites online. But IT is also about reviewing data connections and preventing hostile parties from getting online.

You can produce a better relationship with your IT department to help establish more control over possible threats. You can request many points from your IT department to ensure everyone’s safety and protection while online:

  • Establish parameters for how you’ll use security setups and features for your workplace. These include hardware and software-based firewalls and antivirus programs.
  • Communicate with your IT department on how you’re handling your customers’ data. You can share how your business is complying with CCPA standards.
  • Have a fractional privacy officer on hand to help you review your IT efforts. A privacy officer can identify possible flaws and issues with your security and IT functions and provide guidance on how you can fix any problems you notice.
  • Produce a data mapping platform where you’ll illustrate how the data you collect will travel and where people can find and use it as necessary. The data map should include enough locations surrounding how you’re managing data and making it accessible for multiple situations.

Every system in your workplace needs proper controls to ensure you’re keeping your data secure and protected. Be certain when running your business that you have a plan for how you’re managing your data as necessary and that there’s a plan for where everything goes.

Data Breach – Plan a Response Team

A data breach response team can review whatever threats come with a breach and identify how to resolve the issue sooner. You can establish a response team with multiple positions:

  • Every response team needs a leader that will run the reaction effort.
  • A customer care representative will contact the public and provide info on the breach. The worker should ensure all customers are confident the situation works well.
  • A few members of the IT team should review the compromised data and identify any hacking issues or other threats.
  • The C-Suite team will also plan a response to the breach surrounding how data moves and how it will be preserved and saved. Any backups for whatever is working here will be necessary for everyone’s safety and protection.

All members of your response team should be easily accessible when the time for work comes. Everyone should have a plan for how they’ll manage the data in hand and keep it under control.

Data Breach - Plan a Response Team

Plan a Least Privilege Model

A least privilege model is a platform where your employees will only have access to the smallest amount of data necessary to manage your work. You can incorporate this point into your data protection plan to reduce the risk of employees spreading excess data amounts.

You can also use a tokenization system that disguises identifiable data and keeps the content in a secure space where it cannot be decoded. This point works with a least privilege model to reduce the identifiable data that appears when handling a transaction.

RBAC Also Helps

Another point to plan entails the roles people have when accessing data. An RBAC or role-based access control system will assign permissions to each employee based on their roles. While they can still interact with the least amount of necessary data, you can restrict your employees surrounding who will review the specific data you’re managing in your work. People who have more experience with certain systems may be allowed access to those setups, while those with less experience or work will not handle as many items here.

Data breach - role based access

Review Your Current System

Check your current data storage system to reduce your risk of possible damage if your data ever becomes lost. Your current review can include a check on a few points to ensure everything you manage stays functional:

  • Look at your current encryption system. The encryption you utilize should be secure and should target payment info and identifiable data on customers.
  • Keep all software current by using the proper installations, patches, and other updates. Proper updates ensure all possible security risks are closed off, reducing the risk or severity of potential hacks or disruptions.
  • Monitor whatever software programs or other solutions you use when controlling data. Any security programs you use should be easy to control and configure.
  • Review the passwords people are using when handling data. All passwords should be kept private and complex to where they are hard for people to predict. You could establish a system where each password must have a specific number of characters or certain types of items.

Be Prepared For Possible Failures

While you should plan to succeed in everything you do, you should never assume you’re going to be successful every time you manage your business’ data. Having a response plan can make a difference, as it helps you contain possible damage and reduce the risk of the harm becoming worse than necessary. Proper control over your situation and how you’re managing your business is ideal to your success.

A data breach can be a scary concern for you to consider when running your business. But it doesn’t have to be a dramatic risk if you look at how you respond to the threat. Be sure you look at how you’re managing your data breaches and that you have a plan for what to do if one occurs. The work should be about ensuring everything stays safe in your business.