Ask What are the benefits of a tiered membership?

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I keep hearing about tiered membership plans for a very long time now. The real issue is that i don't really understand how they work. Some sites offer different levels but I'm yet to figure. Do higher tiers make people more likely to stay? Do they help bring in more money? I also wonder if having too many options will confuse members. I want to know if it's worth setting up or if a single plan is better.

What are the benefits of a tiered membership?
 

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