Re: Tiered pricing models - request for clarification

["Heather Morrison" <hmorrison@ola.bc.ca>]

I'm not familiar with APS, but here are my thoughts on tiered pricing
models:

The tiered pricing model basically groups libraries by size and/or type
for pricing purposes.  BC ELN, for example, encourages vendors to provide
pricing for 5 tiers of post-secondary libraries:  2-year college,
university college, small university, medium university, large university.

Tiers can apply to other library types as well, for example, public
libraries can be divided into small, medium, large, or megacity.  Or,
corporate libraries can be classified by the number of employees, e.g.
1-50 employees, 50-100, etc.  One of the advantages of tiered pricing
models is that a single set of prices can be developed to apply to
different library types.

There are a variety of classifications in use, for examples different
vendors will have fewer tiers, others more, the cut-offs for the different
categories often vary, and definitions of user counts vary (e.g. fte vs.
head count).

The major advantage of the tiered pricing model is its simplicity, for
both communications and billing purposes. For consortia, there can be
advantages in reducing the amount of time spent renegotiating if the
number of libraries changes in the process of setting up or renewing a
consortial offer.

The major disadvantage of tiered pricing is that there can be huge jumps
in price when a library increases in size just a little, but just enough
to be bumped up to the next tier.

When working with tiered pricing and large group purchases, it's important
to remember to look at the larger group as a group on its own, rather than
just a collection of smaller libraries.  That is, it might make more sense
to create a new tier price, even if it's a one-off, than to start by
multiplying the number of libraries per tier.

hope this helps!

Heather Grace Morrison, Project Coordinator, BC ELN


liblicense-l@lists.yale.edu writes:
>Comments from Cremer, Monika (cremer.sub.uni-goettingen.de)
>Submitted on: Tue Apr 29 09:33:10 2003
>
>Dear collegues,
>
>can you explain the "tier pricing model" which is used by APS for
>instance? How functions the clasification in different tiers?
>
>Thank you!
>Sincerely
>
>Monika Cremer