Watch how households respond to pressure and a pattern appears. They hold on to the things they consider important and look for savings around the edges.
At a glance
Under pressure, customers protect what matters and trim the rest, which squeezes the middle of the market. A good, better, best range gives every customer a way to stay with you instead of leaving. This article explains how the three tiers work, who moves between them and how to get the detail right.
Designing a range around how customers really behave pays off in any economy, and it’s work our consulting clients find especially useful now.
The pattern: people protect what matters and trim the rest
Private health insurance is a clear example. Household budgets are stretched, yet APRA figures show 45.8% of Australians held hospital cover at 30 June 2026, with 33,509 more people covered than in March. The number of people with general treatment (extras) cover rose by 315,884 over the year. People aren’t walking away from cover they value. Households will keep paying for what they see as a priority, even when money is tight.
The flip side is that they look harder for savings elsewhere. CommBank found spending on essentials grew faster than discretionary spending in August, up 4.8% over the year against 3.3%, and Australia Post reports that 81% of consumers shop around for the best deals, with the average household now buying from 16 different brands a year online.
Why the middle is getting squeezed
Roy Morgan’s 2025 shopper data shows value-focused retailers gaining shoppers while some mid-tier department stores lose them. Its Head of Retail Research, Catherine Jolley, put it plainly: “The ‘middle’ of the market is rapidly eroding.”
That’s worth considering for any business with only one option at one price. A single offer has real strengths, including simplicity, a clear position and less to manage, and it suits specialists whose customers want one standard of work. But when a customer’s budget shrinks, a single price point gives them two choices: pay the same, or leave. Many leave, not because they stopped valuing what you do, but because there was no way to keep doing it for less.
A good, better, best range gives them a third choice: step down a level and stay.
How a good, better, best range works
The idea is simple. Instead of one product or service at one price, you offer three clear versions.
Good
A simple, lower-priced option that covers the essentials. It’s the version for customers who are watching every dollar. It shouldn’t feel cheap or second-rate, just simpler.
Better
Your standard offer. It’s what most customers choose, and it’s usually where your margin is healthiest.
Best
A premium version with extras: more features, more time, more service or a higher-quality product. It’s for customers who can afford it and want the best, and it makes the middle option look like good value by comparison.
The chain reaction that keeps customers
The benefit of a tiered range isn’t just the extra sales from each tier. It’s what happens over time.
A squeezed customer steps down instead of leaving
The family that can no longer afford your standard service chooses the simpler version. You keep the relationship, the booking history and the contact details.
You stay in their routine
Habits are powerful. A customer who keeps coming, even at a lower level, is far more likely to step back up when things improve than one who has found a new provider.
They come back up when budgets recover
When a rate cut, a pay rise or a tax refund arrives, the customer who stayed with you is the easiest one to win back to your standard or premium tier. A customer who left has to be won again from scratch.
The best tier carries more weight than it seems
Comfortable customers are still buying premium when they see value. In the United States, Adobe found that between 1 November and 1 December 2025, strong discounts encouraged shoppers to trade up, and the share of units sold for the most expensive goods rose 19%. A premium option gives these customers somewhere to spend, and it reframes your standard option as the sensible middle choice.
Who steps down, and who steps up
Not every customer moves the same way, so it helps to think about who is likely to use each tier.
Families with a mortgage
Households with a mortgage, especially those aged 30 to 54, take the biggest hit to their cash flow when rates rise, according to RBA analysis of household finances. They’re the most likely to step down to your “good” option.
Older outright owners
Older outright home owners, about a third of households, are far less affected and in many cases slightly better off from higher deposit rates. They’re often happy with “better” or “best”, especially if it saves them time or hassle.
New customers
New customers who aren’t sure about you yet also benefit from a low-priced entry option. It gives them a way to try you before committing to more.
Getting the detail right
A few principles make tiered ranges work better.
Keep the differences clear: Customers should see at a glance what each level includes. Three options with obvious differences are easier to choose between than ten with subtle ones.
Make “good” genuinely good: If the entry option feels like a punishment, customers will leave anyway. Simplify it, don’t strip it bare.
Price the gaps sensibly: The step from good to better should feel worth it for most people.
Protect the standard price: A tiered range is a way to avoid discounting your main offer, not an excuse to cut it.
Here’s how it can look in different businesses:
- A dental clinic: a check-up and clean, a check-up with a scale and polish and fluoride, and a premium package with whitening.
- An aesthetics clinic: a single treatment, a course of three, and a full membership with extras.
- A specialist retailer: an entry-level product, the most popular mid-range model, and a premium version with accessories and servicing.
- A trades or services business: a basic service call, a standard service with a check-over, and a premium plan with priority bookings.
For more on how spending is shifting, see our look at where the money goes when households cut back, and our piece on what Domino’s latest results show about discounting shows another way to offer value without broad discounting. Our guide to raising prices without losing your best customers covers how to price the steps between tiers.
What to do now
- List your main products or services and ask where a customer under pressure would go if they couldn’t afford your standard price.
- Create a simpler, lower-priced “good” option for your most popular offer, so squeezed customers can step down instead of leaving.
- Add a premium “best” option with genuine extras, and present it alongside your standard offer.
- Show all three options side by side on your website, in quotes and in emails, with plain descriptions of what’s included.
- Before Black Friday, consider promoting your “good” tier as the entry point rather than discounting your standard offer.
- Use your customer list to invite past customers who have gone quiet back in at the “good” level.
A tiered range works best when it’s built into your marketing strategy, so each tier has its own message and audience.
To explore what a good, better, best range could look like for your business, contact us or email hello@thedigitalmarketingconsultants.com.au.
