The Sixth Seat Problem: How to Time Licence Tiers So One Extra User Doesn't Cost a Fortune

There's a moment in the life of every small UK firm when the team grows by one and the software bill grows by a third. Nobody sends a warning email. The finance director just opens the renewal quote, blinks, and asks a perfectly reasonable question: how did one person cost us that much?

The answer is usually that you didn't buy a person. You bought a band.

The bit the pricing page doesn't shout about

Most business software sold in the UK sits on tiered pricing: 1–5 users, 6–10, 11–25, 26–50, and so on. It looks tidy on the website, and it is — for the vendor. The friction is at the boundaries, because in a lot of these schemes the tier doesn't just apply to the new seat. It applies to every seat you already hold.

Take a made-up but entirely recognisable example. A project tool prices at £9 per user per month on the 1–5 band, then £14 per user per month on 6–10.

• Five users: £45 a month.
• Six users: £84 a month.

The sixth chair costs £39 a month, or £468 a year, before VAT. Not £9. Not £14. Thirty-nine quid, because the five people you hired months ago just got quietly repriced along with the new starter.

That's the cliff. And it's worth knowing precisely where yours sits before you advertise a vacancy, not after.

The thresholds you'll actually bump into

A short field guide to the bands that turn up most often in UK SMB contracts:

1–5 then 6–10. The classic. Almost every small-business plan on the market uses it, from CRM to accounting add-ons to e-signature tools. The 5→6 step is where most micro-firms take their first real hit.

3 / 10 / 25. Common in design, scheduling and field-service tools. The 3→4 jump catches sole traders taking on their first pair of staff, and it can be brutal.

Minimum seat counts. Some vendors won't sell you fewer than five, or ten, regardless of headcount. If you're a three-person studio, you may be paying for two ghosts.

Named vs concurrent. A concurrent licence lets a pool of, say, eight staff share five seats. That's often cheaper than eight named licences on a higher band — but you need to be genuinely honest about how many people need the tool at the same moment.

Band creep on a per-site basis. A few products tier by location or entity rather than by user. Adding a second office can move you a band even if headcount is flat.

Run the numbers before you run the job ad

The calculation takes four minutes and saves arguments later. Take the new annual total, subtract the old annual total, and divide by the number of extra seats. That's your true marginal cost per user.

Then compare it with something concrete — a day of contractor time, a month of a part-time bookkeeper, the annual cost of a second tool. If the marginal seat costs more than the work the person will do in that tool for the first few months, you've got a decision to make, not a formality to sign off.

While you're there, check three things: whether the tier is based on named users or active users in the last 30 days (some vendors only count the latter); whether the band resets at renewal or applies immediately; and whether there's a mid-term true-up clause that lets them charge you for extra users the moment you add them.

Timing tactics that hold up in practice

Buy the annual before the band flips. If the sixth person starts in March and your renewal is in September, you may be better off adding an annual seat now on the current band than letting the account roll into a higher tier at renewal. Vendors differ on whether they honour the band at signature or at renewal — get it in writing either way.

Stagger the start date. If the hire is genuinely flexible, landing them a fortnight after the renewal date rather than a fortnight before can keep you on the lower band for another twelve months. Slightly cold-blooded, entirely legal, and worth a conversation with the new starter.

Two tools instead of one. Splitting eight people across a 5-seat plan on one product and a 3-seat plan on a cheaper competitor is fussy and creates admin overhead — but it's sometimes half the price of a single 8-seat block. Weigh the faff, don't dismiss it.

Negotiate the jump, don't accept the list price. Ask for the old band to be grandfathered for twelve months, or for a blended rate that phases the increase in. Ask for the price you'd have paid at eleven seats, applied at six. Sales teams have more room on band transitions than on headline discounts, because moving you up a tier is a metric they like to hit.

Use day passes and guest seats for contractors. Plenty of tools offer a free viewer or guest role. If the sixth person is a three-month contractor, a full named licence is often the wrong instrument entirely.

Set a calendar reminder two months before renewal. Band changes are usually negotiable before the quote is issued and much less so after. A reminder is cheaper than a consultant.

Questions worth putting in an email

• At what user count does our price band change, and does the new rate apply to all seats or only the additional ones?
• Is the tier assessed on named users, active users, or purchased seats?
• If we add a user mid-term, does the band change immediately or at renewal?
• Will you honour our current band for the remainder of the contract if we add seats before the renewal date?
• What's the price at one seat above the next threshold, so we can see the cliff before we reach it?

The wider point

Tier design isn't an accident of arithmetic — it's a sales mechanism, and cliffs are deliberate. That doesn't make vendors villains. It does mean the boundary is a procurement event in its own right, deserving the same ten minutes of attention you'd give to a broadband renewal or a domain transfer.

So log your band thresholds next to your renewal dates. Note the marginal cost of the next seat. Then, when the team grows or a contract rolls around, you'll know whether you're buying a user or buying a tier — and you'll be able to argue about the second one before it's already on the invoice.