If you’ve developed an eLearning course before, you know the struggle that goes behind the scenes. From choosing an LMS platform, a course topic that can create value, to setting up the recording equipment, publishing an eLearning course is the sum of many efforts.
You have taken your time and expertise, mixed it with creativity, and streamlined everything by allocating cash and capital to create a course that can impact lives. So how much were your time, energy, and creativity worth?
The price tag of your eLearning course not only determines the profit but also the acceptability of the course. To sustain in the market, coming up with a rock-solid pricing strategy is a must! And today, we are going to provide you with a comprehensive guide on how you can price your eLearning courses to get the right value of your efforts and bring in the most revenue. Let’s get started!
The Importance of Pricing
Pricing is a game of intelligence. And you can’t win this by guessing, you have to come up with foolproof strategies. Get it right, you’re all set to thrive. Get it wrong, the course’s overall profitability for the future is at risk.
With the eLearning market growing so fast, the right pricing approach is essential to remain competitive. While setting the bar too high can make you lose sales, setting the bar too low will also decrease your course’s perceived value.
So how do you find the middle ground? Not sure where to start? Let’s start with the considerations that go into pricing your eLearning course.
What to Consider to Price eLearning Courses
Creating an eLearning course is a multi-stage process. There are too many variables involved to decide the final price tag. While the exact budget for the course development cannot be calculated on the fly, keeping track of each of the variables will help you decide the final price better.
Course Creation Cost
Your course content has significant implications for the cost to create the course. If your course has custom-designed images, high-quality video, animations, and other content that require you to hire professionals or use premium tools, naturally the price of the course will go up with the creation cost.
Recording Setup Cost
Video is the gold standard for online course content. Unless you’re going to just record your computer’s screen, there are three fundamental pieces you need to film your course videos – light, camera, and audio. The cost of your video recording setup will also impact the final price of the course.
LMS & Other Third-party Plugins Cost
Although you can publish your courses on popular eLearning platforms like Udemy, Skillshare, and more. But they provide little to no control over the branding or prices of the courses. Having your own LMS platform is always a wise idea – but how much does building an LMS site really cost? We have an in-depth article that you can read to figure out how much building an eLearning site on WordPress costs using Tutor LMS.
However, this is not just a process of uploading course content into the LMS system. You will need LMS tools and other third-party plugins and extensions to deliver your courses. The cost of all the tools and premium plugins in use should also come into consideration.
Depending on your target market, your marketing costs will vary by topic, search terms, and competition in your market space. All the expenses you make to promote and sell your course should be tracked and added to the pricing.
Team Time and Resources
Resist the temptation to sell your courses at a low price because the biggest cost to develop an online course is your and your team’s time. Never forget to include that into the considerations that go into pricing.
Coming Up With a Solid Pricing Strategy
Your pricing strategy is likely to be more effective if it:
- cover your costs and make a profit
- compare favorably to your competitors
- appeal to your target market
So how do you come up with a solid pricing strategy that is guaranteed to make your eLearning course thrive? Let’s have a look at the key areas where you must research before pricing your course.
Analyze the Demand
The first step is to analyze the demand for the course in the market. When it comes to analyzing the demand, there are a few aspects:
- Willingness to buy
- Ability to pay
- Competing substitutes
Finding the equilibrium point where the consumers and the course creator both are satisfied is essential to survive in the market for a longer duration. If your eLearning course covers a topic that has a high market demand but has very few substitutes, then aim for a high price. However, if the topic has low market value you might want to lower the price a little to make more sales and meet the revenue target.
Focus On The Value
There’s a famous saying that goes “quality over quantity”. This is true for your eLearning course as well. Whilst the length of the video has an impact on the price tag of the course, the value the content delivers matters more. If your 1-hour course has the quality to be a life-changer, why shouldn’t you price it higher? Value matters more than the volume.
Create Different Price Tiers
Tiered pricing is used to offer a course at different price points by limiting or expanding the features/functionalities of the course to each tier price.
Let’s say you sell your course at $20 and you make 10 sales a day, hence you make $200. But if you create another price tier for the same course with some advanced materials and price it $40, and let’s say 5 people bought the course. You would make $300 for the same number of sales. Now, if you add another price tier you can earn more than double your daily earnings. That’s the benefit of creating different price tiers.
Usually, 2 or 3 price tiers are the standard but you should find out what works for your course and act accordingly.
Test Different Price Points by Offering Promo Code
Use coupons and discounts to test different price points. If you experience a big jump in sales on offering discounts, it means the price elasticity of your course is high. Rather than starting with big discounts, start small and gradually test different percentiles of discounts. Then compare the results and come up with a price that customers are willing to pay.
While doing this keep in mind, you’ll make less per sale so carefully calculate the discount percentage to maximize revenues.
Research Your Competitor
Keeping tabs on your competitors is a must to grow your business and find new opportunities. While it may seem obvious to price your course based on how much your competitors are charging. But that shouldn’t be the strategy!
Research your competitors not to price your course but to understand the market demand and identify where you can do better. Look at their reviews and find out what the learners are seeking that they are failing to offer. Based on the research, make strategic improvements to your course so that it delivers more value and gains more revenue. A win-win!
Create an Authority in Your Niche
There’s no better way to build your reputation than to build an authority in your niche. Become an expert in your area of teaching and automatically your course will be eligible for a higher price tag.
To build up your credentials, you can start a YouTube channel for the eLearning course, make podcasts and free resources to trigger a need to purchase your course.
Set a Revenue Target
The simple pricing formula is to come up with an effective revenue target. Determine a targeted return on your invested capital. Set up your business’s KPI and identify your lead indicators to achieve your target revenue and profit. A specific profit target can be a powerful force to determine the price tag of your eLearning course.
Pricing is a big challenge for many online course creators. The truth is that you will never be able to land on a price point that’s right for everyone. While some may not afford your course, others will happily pay for the value it delivers. It doesn’t mean that the price point you’ve chosen after careful analysis is wrong or unfair.
This article is a comprehensive guide and not a be-all and end-all. Let us know what pricing strategy you follow in the comments!