Setting the right price tag on your products can be quite challenging. Pricing a service such as an online course is even more so. Finding that sweet spot where your course price is attractive to your users while earning enough money by selling online courses can be a tricky job.
Basic pricing of your course
Your course is worth much more than you give it credit for. 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.
The base of your pricing should follow the following 5 principles:
1. Pricing 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.
2. The High Value of Education
Think of Ivy League universities. Their pricing reflects its quality. Harvard, Oxford, and Yale do not ask for 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.
3. Social and Networking through an Online School
When using LearnWorlds as your platform of choice, you will be giving them access to the most high-end educational platform and the added value of joining a community of similar users where they can network, engage and communicate. It is not just an educational experience, it is a life experience worth valuing high.
4. Education 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, certifications, videos and so much more learning units.
An online course will be interactive, easy to absorb knowledge, and much more complicated with a multitude of learning experiences to offer along with your own personal guidance.
5. Exclusivity 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 they are the only opportunity to get into an exclusive community with valuable knowledge you should price your courses accordingly.
Why You Must Charge a Premium Price
Should I start low or should I start high?
Charging a low price for online courses is a marketing and quality dead end. Selling online courses through your own website gives you the advantage of controlling your pricing and personal brand, avoiding course marketplace tactics of under-pricing to sell the masses.
Would you prefer 100 sales for $10 or 5 for $500?
A premium-priced course comes with much more advantages:
Here are the 7 reasons why you should start with a premium price in order to finetune your pricing:
1. Great 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.
2. Better Advertising Budget
Just 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.
3. 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 to their problems in your services.
4. 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.
5. Reach Income Goals
Have you set an income goal for your business? You might need to, and just by focusing on a few select premium clients, you could make that income goal a reality much much easier.
If you need to bring thousands of students to reach your income goal, you will only be getting yourself in a maintenance and communication nightmare.
6. 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.
7. 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 a part of the learning process.
How to Price Online Courses
First, you need to understand who is your customers, and are they willing to pay that price? You can read Lisa Grand’s article with the 10 Questions to Ask When Pricing Your Product.
A longer course usually means more knowledge included, the longer your course, the more you should charge for it. However, there is one exception. Always have in mind quality and ease of use. If your course is designed to offer more quality in a short burst instead of a lot of talk without any substance, it should be priced as a premium product.
Whether it is other online academies, universities, or training organizations, you should know your competition and what are your clients paying for it. Competing on pricing is not a good idea, but knowing the market prices in your niche would help you set your prices accordingly.
Value of the Outcome
What problem are you solving and how much are people willing to pay? 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?
Brand, Credibility, and Authority
Branding and industry credibility or authority plays a large factor in 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, industry expert, speaker, reviews, and media exposure can play a factor in increasing your prices.
Creating Income Goals
Above all, you need to set some income goals for your online courses. Regardless of what personal goal you hope to achieve. Whether it is being a course creator as a full-time job or a six-figure salary, you need a solid number to guide your decisions.
Initially, you should calculate any expenses for equipment and services you might need and then set specific goals for:
- Launching Phase
- Monthly Income Goal
- Yearly Income Goal
Income goals will inform 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 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.
Multiple Price Tiers and Testing the Price
As is expected, not all your students will have the same goals when enrolling in your courses. Some of your offerings might be considered “bonus” or overpriced and unneeded by some. A good way to go around that is 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. You can see the price point where people respond more. Your end goal is a greater income and can be achieved with different combinations of prices and student numbers. Test different prices and see which ones hit the sweet spot.
When to go for low pricing?
During a pre-launch, an early sales period, or a testing period, you can have a lower price. That will allow you to collect testimonials, feedback, and some early clients, and a 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. Avoid massive discounts and long-term discount periods.
Is Giving Free Courses a Good Strategy?
Not all of your courses should be paid for. 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.
How can I Increase the Value of My Online Course?
Do you feel that your course is not worth a higher price tag? Then you can increase its value in a few simple ways. Choose what you are more comfortable and experienced with or combine a few for better results:
- Content upgrades
- Host live Q&A’s
- Offer One One Consulting or Training
- Create a community within the school
- Provide Weekly Office Hours
- Include Downloadable Resources (ebooks, case studies, images, and more)
- Offer a Course Completion Certification