How to Price Your E-Learning Course
The price at which you sell your online courses impacts every aspect of your business: the type of marketing you can do, the budget of paid adverts, level of reach among the target learners, and the amount of revenue you can expect to generate with it.
If you have ever offered online courses or thinking about becoming an online tutor, it’s most likely that you too have faced this dilemma somewhere down the line. You can’t charge too little as it will degrade the value of your course, and you can’t definitely price too high.
Unfortunately, there isn’t any master-key or one-size-fits-all solution to this dilemma. Fortunately, every tutor can devise their own online course pricing strategy by following some simple tactics.
At Pinlearn, we have designed, developed, and deployed dozens of eLearning platforms that host tens of thousands of online courses, live lectures, and group webinars. At this point, we have a more than decent idea of how to price online courses, how much developing an online training course costs, and what works best when it comes to pricing your online course.
I will try to include all these ideas into a quick post, so you can be equipped with enough practical experiences to determine your own course of action.
Online Course Pricing Tips
To kick things off, let me share a quick story of an eLearning platform that not only broke all the stereotypes but also came up with a unique course pricing strategy that was completely new to the world of the test-prep industry.
Magoosh is an online learning platform that offers test prep training standardized tests such as GRE, MCAT, TOEFL, SAT, Praxis, etc. Students are required to pay a monthly subscription fee for each course they want to access.
The CEO, Bhavin Parikh, along with his three more co-founders, started the platform in 2009. Back then, the US test prep industry was ruled by big names like Kaplan and Princeton Review. The students had only three options to access high-quality test-prep training:
- Purchase books that usually cost $50-$100.
- Enroll in a traditional test-prep classroom that would cost around $5000.
- Purchase test-prep self-paced courses from Kaplan and others by paying upfront.
They knew about the gap that discouraged poor students from taking high-quality test prep courses. So they priced their courses in a way that filled this gap:
- Instead of big upfront payments, they allowed students to pay smaller monthly fees.
- They priced the subscription fee at $29/month, which was lesser than the price of books.
- They also offered free learning resources in addition to the paid courses to get traction.
They started with a short course and set the initial price at $29. After a few months, once they had enough paying subscribers, they made the courses more detailed and increased the pricing. Still, they made sure to keep the original values intact: offering affordable online alternatives to expensive, traditional courses.
Magoosh’s story is not different from millions of online tutors today. You might function in a different niche, use a different revenue model, select another course delivery channel, but you can’t price your courses by ignoring the factors that influence demand, gap, competition, and eLearning content development cost in the market.
Resist the temptation to charge very low
I can understand if you get the temptation to charge very low in the beginning, hoping you can make the profits down the line once it is popular. However, it is a sign that you are not confident about the quality of your course. Plus,
- you may not have enough content in your course,
- You may not have enough audience or email list to promote,
- tons of free or cheaper online resources or alternatives might also be present.
Knowing this, you might probably question your product and have doubts if anybody will even pay a high price for it.
No doubt, the internet is full of free and inexpensive resources that people can utilize. Also, many people don’t mind traversing through free articles, eBooks, podcasts, YouTube videos, audiobooks, white papers, and presentations, etc. to browse free information online. However, these people are hardly your target audience, as they will rarely spend even a penny to purchase an online course.
Many people who spend hours and hours bookmarking free online resources, hardly even use them or complete what they started. Also, some people usually purchase low-priced courses, but they too hardly expect any big value from them.
You need to focus more on the third type of audience, which gladly pays a premium for high-quality, well-designed, and organized courses from an expert in the field. Magoosh’s example fits right into this scenario. Initially, they had decided to crowd-source their courses and put negligible price tags. Eventually, they understood that expert-driven platforms may be a little expensive, but they are more promising when it comes to high-quality information.
So, if you think that you can provide that kind of expertise and value to the learners, don’t hesitate to put a not-so-inexpensive price tag, while also making sure that you don’t price higher than the competitors who also provide the same kinds of value.
Problems with charging a low price for your online course:
Charging low may be helpful in a few scenarios, but those scenarios hardly provide any value from a tutor’s perspective. Big platforms like Udemy may make profits by charging low, as they have many other revenue sources, too. But if you charge very low, you might run into problems that are not good on eLearning business:
- Lesser enthusiasm: It makes you pessimistic with your marketing. When selling even dozens of courses earn you only a few dollars, you can’t be more hopeless about your venture.
- No Ads: With a lower price margin, you can’t afford advertisements. If all your earnings are going into advertisements on search engines, social media, and eLearning marketplaces, you are pricing your courses too low.
- No perceived quality: Lower-priced courses are perceived to have lower overall value. Such pricing attracts lower quality leads with lesser or no long-term value.
- Value overpricing: Price is not always a decisive factor in defeating your competition. Especially in learning, people prefer value and quality overpricing.
- Same efforts: It takes as much effort to sell cheaper courses as it does for expensive ones. You would be using the same kinds of eLearning solutions, authoring tools, advertisements, and lead nurturing to sell even lower-priced courses.
- No Scope for affiliate marketing: Affiliate marketing with other individuals or businesses expands your reach among the target audience. When you don’t price your courses well enough, you can’t pay attractive commissions to your affiliate partners.
How much should you charge?
Unfortunately, there isn’t any fixed way or standard lowest and highest caps for desirable course pricing or how to price curriculum in any specific domain. However, if you face any of the given above problems, know that you are pricing your online courses too low. A well-devised pricing strategy must include consideration on all of the given below verticals:
- Your course niche
- Your course topic
- Number of competitors
- Pricing of competitors
- Value over competitors
- Your business model
- Your marketing budget
- Your credibility as an SME
- Your expertise in the subject
- Long-term goals
- All overhead expenses:
- Authoring tools
- Website development (if selling on your own website)
- Web hosting server cost
- The fee to the payment processors
- The fee to affiliate marketers
- Cost of online course development
Experiment with different price points
Be advised that I am not advocating blindly pricing your courses with expensive tags. That would have even worse effects. This is definitely not the answer to how to price a training course. It takes some time to determine a price point that works best. You must experiment with different price points and analyze the effects of each on the above-explained verticals.
For example, you have priced your course moderately, and you are getting decent sales. However, you are also getting too many refund requests. This could imply that you have good credit as a tutor from your past experiences, but your current course content is not as expected by the students for that price point.
Yet another example could be mapping your course pricing with your long-term objective. For instance, your long-term objective is not to sell an SEO course but to generate leads for your primary business, which is performing SEO audit for other businesses. In this case, you can either price your course very low or offer it for free, as you are not dependent on it for revenue.
In short, there could be N number of ways to price your courses correctly, but every other strategy must resonate with your business objectives. Pricing and online course are not just about one-time payments from the students. There are ways to receive small but regular payments for an extended period, too.
You could be selling each course on a transaction basis like Udemy, or a subscription basis like Coursera, or even a freemium basis like Khan Academy where it offers some portion of a course free of cost, while charges for more advanced learning resources.
The price however you want, but be accessible, valuable, reasonable, and competitive. Showcase your expertise in your courses and stick to your business objectives, you will get a clear picture all by yourself about the average price of online courses down the line.