Three tiers unlock price discrimination without explicit haggling
Offering Free, Pro, and Enterprise tiers is not arbitrary. Free tier acquires users with zero friction and establishes the product in the market; it also self-segments: only users who see serious value will upgrade. Pro tier is priced for SMBs and power users, capturing the bulk of revenue but risking too much friction for small teams. Enterprise tier exists not because those customers are fundamentally different, but because they negotiate everything anyway: contract terms, integrations, uptime SLAs. By offering Enterprise separately, you give the sales team permission to customize the deal and capture the willingness to pay of large buyers without building a different product.
The feature gates matter more than the tier names. Free might cap at 10 projects, 1GB storage, community support. Pro at 100 projects, 100GB, email support. Enterprise unlimited, direct support. These gates are both genuine constraints (preventing freeloaders from consuming infinite infrastructure) and psychological: customers self-select into the tier that matches their use case.
Anchoring and the missing tier
A four-tier structure (Free, Pro, Plus, Enterprise) often underperforms three-tier because customers optimize: some buy Plus when Pro + added features would be cheaper or equally functional. Three tiers force a choice, and the middle tier (Pro) often captures 60-70% of upgraded customers because it feels like the 'right' choice relative to Free (expensive) and Enterprise (overkill).