The reason a premium tier nobody buys is profitable

The enterprise plan converts at under one per cent and has survived four pricing reviews. Remove it and revenue falls, because the plan below it stops being the sensible middle and becomes the most expensive thing on the page.

What everyone sees

A tier is judged by its own sales, so a tier nobody buys looks like clutter. That treats each option as independent. Options are evaluated against each other, and an unsold option can be doing more work than a sold one by changing where the middle sits.

What is actually happening

Huber, Payne and Puto demonstrated that adding an alternative which is clearly worse than an existing option — and therefore should never be chosen — raises the share of the option that dominates it, a violation of the assumption that adding choices cannot help a specific competitor. Wernerfelt’s reconstruction of the compromise effect gives a reason the behaviour is not simply an error: when buyers are uncertain about their own valuations, the middle option is a rational inference about what people like them typically need, so the position of the extremes carries genuine information. Either way the top tier earns its place on the page without earning revenue, and its removal changes the set that the remaining tiers are judged inside.

Why it stays hidden

The function hides because attribution runs by line item. Dashboards report revenue per plan, and the top tier reports nearly none, so it is proposed for deletion at every review. Its contribution appears as the middle tier’s conversion rate, which is credited to the middle tier.