Setting the right price tag on your products can be quite challenging. Pricing a service such as an online course is even more so. However, there is always that sweet spot where your course price is attractive to your learners and where you earn enough money by selling your courses.
Whether you are an experienced entrepreneur in the elearning market or a new edupreneur who’s ready to launch your online courses, we are here to help out.
There is no doubt that deciding on a price for your courses is of huge importance. Such a decision can help you achieve your business goals from making a ground-breaking entrance to the market, to tapping a new market, promoting your brand, and increasing your overall sales.
While there is no single solution to pricing your courses, and business needs vary, there are many phases that every online instructor goes through until he/she finds the most appropriate price tag to put on courses.
To answer to these effectively, you will need to set up clear and specific goals as to what you expect to get out from your course. Clarifying the purpose of your online course can help you prioritise and make an informed decision in terms of expected profit and ROI.
Factors to Consider When Pricing Your Course
Your course is always worth much more than you give it credit for. That is because an online training course is the amalgam of your work and life experiences, years of learning and education. What you are providing is a service for someone to share your knowledge, a highly valued commodity.
Generally, the base of your pricing should follow the following 5 factors:
1Pricing Rule of Thumb
As a rule of thumb, most of your courses should be priced well above $100 and only your smaller courses intended to attract new students should be priced below the $100 mark. Your whole brand identity as a quality educator is being mirrored in your price.
Note: Some industries might come with a lower price expectation. It’s always a good idea to do a good research over the competition and your course’s target market.
2The High Value of Education
Think of Ivy League universities. Their pricing reflects their quality. Harvard, Oxford and Yale do not ask the same tuition as a community college. Pricing is part of their strategy to maintain their image as high quality destinations and using that money to further invest in the quality of education offered.
3Social and Networking through an Online School
When using LearnWorlds as your platform of choice, you will be giving them access in the most high-end educational platform and the added value of joining a community of similar learners where they can network, engage and communicate. It is not just an educational experience, it is a life experience worth valuing high.
4Education is Not Only the Material
If you were to sell an ebook, you would probably price it between $10 to $20 dollars, but you are not. You are giving them reading material, quizzes, exams, certification, videos and so much more learning units.
An online course will be interactive, easy to absorb the knowledge and much more complicated with a multitude of learning experiences to offer along with your own personal guidance.
5Exclusivity of Content
Online courses offer valuable knowledge not found anywhere else. Your years of experience in a multimedia format for them to learn. Learners, students, and clients pay to get access to something they value.
It is their only opportunity to get into an exclusive community with valuable knowledge you should price your courses accordingly.
How to Price Your Course
As it is expected, not all your students will have the same goals when enrolling to your courses. Some of your offerings might be considered “bonus” or overpriced and unneeded by some. A good way to go around this is introducing multiple courses or membership options and course bundles in different pricing tiers.
Different prices for the same products can also be used to test prices and give more options to potential customers. You can see the price point where people respond more. Your end goal is to generate greater income and this can be achieved with different combinations of prices and student numbers. Testing different prices can help you see which ones hit the sweet spot.
The 4 Tiers of Online Course Pricing
Not all your courses should be paid. You can earn a lot more than an income by giving out free courses. Free courses can generate leads for expensive courses or a way to showcase your expertise. It is the first point of contact to create a rapport. We all love good communication, creating relationships and this sense of familiarity is what will help you sell more courses.
If your business is not only about education and training, then free courses can help you attract potential customers for your other services or products. People who value your expertise and take a course to learn from you could be your next customers.
Whether that is corporate training, invitations for speakers, writing jobs or agency work, free courses can get you closer to making a deal.
Free doesn’t mean ‘cheap’ although there is a common misconception around this. Free courses should reflect your brand’s quality, it will set the expectations for what the customer might expect from the paid courses.
While it’s not wise to give courses out for free, there are times when you should. This is when you want to give out samples of your course, offering someone the incentive to join and take a sneak peak of what you have.
Offering a free mini course before your official course launch for example, can work during a pre-launch. Or giving out a free course can give the chance to potential customers to review the course and decide whether they want to go full access and pay for more.
Other cases when you should give out a course for free:
This is the most commonly used pricing as it offers the most basics at a price which is relatively affordable. The price in this tier is usually low in order to meet the needs of customers who are just starting out but are possibly not sure how long they want to stay. Bear in mind that low prices attract low quality customers, and investing too much in it doesn’t benefit your business goals altogether.
Most paid courses come with a one-off payment.
With subscriptions, you offer your customers a recurring payment option where they can pay for their membership on the course on a daily, weekly, monthly, or yearly. These allow the possibility for more options to suit the financial needs and preferences of every customer.
A membership site provides gated content that gives access only to subscribers. Instead of selling one-off online courses for example, you allow your students, clients or fans to keep an active (paid) subscription in exchange for accessing offers, deals and a community they can network. Membership sites work well with subscriptions and they have different levels of access to suit different preferences.
For the premium course you can charge your customers more and consider using payment plans where you can either pay once or pay for up to six months or yearly. You can go premium when you offer an exclusive content or more extended course offering more features or an advantaged course e.g. towards winning a certification in the medical field etc.
Going premium has the following advantages:
Greater Marketing Approach
A higher price will allow you more flexibility when giving our discounted courses with coupons, attract a better clientele and fewer communication hassles and attracting a higher class of clients that can afford more expensive products and can expand your business.
Online courses are intangible products and should be marketed and priced as such.
Better Advertising Budget
Just by selling the few first courses will enable you to spend more on advertising early on and attract more customers. A better advertising budget will help you keep up the prices and keep earning from your courses, thus creating a decent passive income with less work.
Do Not Compete on Pricing
The worst way to do marketing is by competing on pricing. You can do discounts to earn difficult or price sensitive clients, but a price competition with someone that offers a cheap course is not a solution. People buy because there is a connection, they perceive a higher quality or find the solution in their problems in your services.
Partners and Affiliates
Partnering with others and affiliates will be more interested in selling a premium product than a cheap one, as they will be making a bigger profit for less work.
Better Education Experience
A smaller group of quality learners that can afford your premium course will provide a better experience for them. People tend to connect much more in groups of 7-9 persons, and even online learning can become crowded after a few dozens of people in each course.
Focus on the quality of their experience and how you can offer personal guidance, training, and education to each one of your select students, and they will suggest you to more of their premium friends.
Higher Course Engagement
A higher price comes with a higher engagement rate. Learners will be more involved and interact more when they pay more. An impulse buy of a low priced course is easily forgotten, but a premium course will get them engaged and focused on their learning objectives. An incentive that should also be part of the learning process.
Setting up a Pricing Strategy:
Understanding who your customers are, can help you decide on the price. Better yet, it can help you come up with a pricing strategy.
To do this, you need to get down to more specifics and look at other underlying factors come into play:
Calculating the Value of the Outcome
The most important pricing point is the value your customers will receive. How much is the course, training or knowledge affecting their lives?
Are you doing a course that will allow someone to get their dream job or have a healthier and happier life or just getting rid of mundane everyday issues? Taking the chance to think about this is crucial, because it can help you put a price on the significance your course offers out to the world.
Consider Course length
Sometimes, length matters. While most people will value high a course that brings them quickly to their results e.g. How to fix your relationship – 2 hours coaching; some courses for professional education might require hours of videos, assignments, quizzes and activities. You should take into consideration both the value, the length and your effort.
Research the Competition
Whether it is other online academies, universities or training organisations, you should know your competition and what your clients are paying for it. Competing on pricing is not a good idea, but knowing what the market prices are in your niche can help you set up your course price accordingly.
A competitor can be offering physical workshops, online training, courses in a marketplace, free youtube videos, email courses. Take a good look at the offering, where the free resources stop providing value and where your competitor’s pricing begins. You can find a 10$ course on marketplaces like Udemy or Skillshare, but does it offer the same degree of depth and instructor interactivity with you?
See if other course providers offer low, medium or high prices for their courses, and try to understand why. Is it the value of the offering, their branding or something else behind it? Your competitor’s price is your starting point, and from there you can price more or less depending on where you want to position yourself.
In some cases, your competitors might have set a price expectation. You can work with it by:
Investing in branding and industry credibility or authority plays a huge role on selling and pricing. The more people value your personal (or company’s) brand, the more you can charge for your training courses. Being a published author, an industry expert, speaker, getting reviews and media exposure can help to increase your prices.
Intro videos on the landing pages or free sections/courses can also increase the familiarity of the students with your brand. Guest posting on authoritative sites and getting featured in podcasts will also increase your branding.
Create Income Goals
Regardless of what personal goals you hope to achieve, you need to set some income goals for your courses. Is your goal to get some money on the side with minimum effort or get this into a full-time business, and what would need to achieve that.
Initially, you should calculate any expenses for equipment and services you might need and then set specific goals for:
As you would imagine, income goals informs your pricing strategy. Think of your current customers and network. If you have an emailing list of one thousand business contacts, how many do you expect to convert to paying students?
You can go with a conservative calculation such as 1% or if you have done business before them and you know that they could be interested, you could expect more. Would that 1% be enough to make your income goals with a 50$ pricing or a 300$ pricing? The cheaper the price the more sales, but less total income. See the below table of expectations as an example for 1000 email list contacts:
|Price ($)||Conversion||Sales||Total ($)|
One good tactic you can use is pricing highly at the beginning and get the high-spenders early on, but later share a discount coupon to the ones that did not buy, increasing your total income potential, just be careful not to share the discount to the customers that paid in full.
During a pre-launch, an early sales period or a testing period, you can have a lower price. This will allow you to collect testimonials, feedback and some early clients and budget to use later on.
A deadline before a price increase is also helpful to push potential customers to buy earlier, especially if they are price-sensitive. Discounts should be a last resort for difficult customers but may also backfire and under-value your course. However, avoid massive discounts and long term discount periods.
In the following instances a decrease in price is considered to be a smart move:
When you have a deadline before a price increase: deadlines give a sense of urgency. If you are doing a webinar or preparing for a new launch you can offer an early bird special offering a discount on limited time – first come, first served basis.
When you want to acquire a new customer: sometimes putting a discount as a last resort can work to get new customers and increase your course sales.
More often than not, it’s better to avoid pricing too low. Why? There are a couple of reasons.
It makes you abandon your marketing efforts altogether: when charging too low it is tempting not to market your course. However, whether it is that way or high price, you still need to promote your courses in the best way possible.
It reduces the value of your course: it is easy to claim that a cheap course is also cheap on value. In fact there is a psychological effect that makes us think so.
It takes the same effort to sell a course on higher price: why charge your course at a low price when you can charge much higher and carry out the same effort upon launching it?
The Real Secret to Pricing Online Courses
Whichever price you decide to go for your course keep evaluating the quality of the course, your brand and market trends. Test your price again and again until you find the perfect equilibrium.
Holidays and discounts help you drop your price and see the response of your audience, while exclusive content or testing a new price from a hidden page can test your audience’s willingness to go higher. Surveys, feedback questions and focus groups are also great to ask directly your customers what they think of your price.
But, let’s be honest, anyone would prefer or 5 of $500 rather 100 sales for $10. You can either go for the masses or for an exclusive set of premium students. You can even offer different levels of courses for different prices and see what works for you.
Best of luck setting up your own pricing strategy!