How to Determine the Price of Your Online Courses
In recent years, online courses have become increasingly popular, especially with the emergence of e-learning platforms. Pricing your online course is one of the most critical decisions you will make in your course creation process. It is essential to price your course correctly to ensure profitability while attracting customers. In this guide, we will outline some of the factors to consider when pricing your online course, provide some price benchmarks, explain when to drop or increase the price, provide a formula for calculating revenue, and suggest different tiers of pricing. We will also explore ways to add value to your course.
Factors to Consider in Pricing Your Courses
1. Course Content
The complexity of your course content can impact the price. Consider the depth and breadth of your course material, the level of expertise you bring to the topic, and the amount of time and effort you put into creating the course.
Courses that provide in-depth knowledge, complex skills, and unique techniques will generally attract a higher price point.
2. Course Type and Format
Different course types attract different price points. For example, short courses such as webinars may be priced lower than long courses such as a full e-learning course, a self-paced course with pre-recorded videos may be priced differently than a live online course with interactive features. The format and delivery method of your course can also impact its value and pricing.
3. Your Audience
Understanding your audience is crucial when pricing your course. Consider factors such as their income level, education, and job title. This information can help you determine what they are willing to pay for your course. If your course caters to a niche market with a high demand for your specific expertise, you may be able to price it higher.
4. Competition
Research your competitors' pricing to ensure you are not over or underpricing your course. Check what they offer, their pricing strategies, and any unique features they provide. Research similar courses and their pricing to ensure your course is competitive while also offering value to customers.
5. Expertise and Brand Reputation
Your personal expertise and brand reputation can impact the perceived value of your course. If you are a well-known expert in your field, you may be able to charge a premium price for your course. Similarly, if you have an established brand with a loyal following, you may be able to price your course higher.
6. Production and Marketing Costs
The production cost includes expenses such as software, equipment, content creation, marketing and other overhead expenses. These costs need to be covered by your course pricing to ensure profitability.
Some industry benchmarks
1. By Industry
Different industries have different price ranges for online courses. For example, courses in the software development industry can range from $100 to $500, while courses in the photography industry can range from $50 to $300.
- Business and Entrepreneurship: $200-$500
- Creative Skills (e.g. Photography, Design): $100-$300
- Technology and Coding: $500-$1,000
- Language Learning: $100-$300
- Fitness and Wellness: $50-$150
- Personal Development: $100-$300
2. By Course Type
Short courses, such as webinars or mini-courses, are often priced between $10 and $100. Full-length courses can range from $200 to $1,000, depending on the complexity and the course format.
- Self-Paced Online Course: $50-$500
- Live Online Course: $200-$1,000
- Hybrid Course (Combination of Self-Paced and Live): $500-$2,000
- Membership Site with Ongoing Content: $50-$100 per month
- Group Coaching Program: $1,000-$5,000
3. By the length of the course
The length of the course can impact its perceived value and pricing, but it's important to consider the quality and level of expertise of the course creator, as well as the content and features included in the course.
- Short Course (Less than 2 hours): $20-$10
- Medium Course (2-6 hours): $100-$300
- Long Course (6-12 hours): $300-$500
- Comprehensive Course (More than 12 hours): $500-$1,000
It's important to note that these benchmarks are not set in stone and can vary depending on various factors. It's essential to conduct market research and analyze competitors' pricing before setting the price for your online course. Additionally, it's important to test and experiment with different price points to determine the optimal price for your course.
Why higher price is better
In many cases, it’s better to avoid pricing too low, for these reasons:
1. You tend to abandon your marketing and sales efforts: when charging too low it makes you neglecting your marketings activities for your course.
The fact is that you still need to promote your courses in the best way regardless of its low price or high price.
2. It reduces the value of your course. There is a psychological effect that makes people think that a cheap course is also cheap on value.
When to Drop or Increase the Price
1. Drop the Price
If you are not getting enough sales or receiving negative feedback from your customers, it may be time to reduce your price. You can also offer discounts during promotional periods, such as holidays or for a limited time.
2. Increase the Price
If you are getting significant traffic to your website and have received positive feedback from your customers, it may be time to increase your price. A price increase can also reflect an update to your course content or course format.
Revenue Calculation
The formula for calculating revenue based on course price, ad spend, audience size, and expected conversion rate is:
Revenue = (Course Price x Audience Size x Conversion Rate) - Ad Spend
For example, suppose your course price is $500, and you expect to have 1,000 people in your audience with a 5% conversion rate. If your ad spend is $2,000, your revenue would be:
Revenue = ($500 x 1,000 x 0.05) - $2,000 = $22,500
Different Tiers of Pricing Online Courses
Offering tiered pricing allows customers to choose the level of access they want. For example, you can offer a free, paid, subscription, and premium level.
1. Free tier
This tier is designed to attract potential customers who are not yet familiar with your course offerings. You can offer a free course that provides a basic level of content, such as an introduction to your course topic or a small selection of lessons. This tier is an excellent way to build brand awareness and attract new customers who may be interested in upgrading to a paid or subscription level in the future.
2. Paid tier
For those who are willing to pay for additional content and features beyond what is offered in the free tier, you can offer more in-depth course material, additional resources like quizzes, assignments, and assessments, or access to live sessions with instructors or mentors. The paid tier should provide enough value to make it worth the investment for your customers.
3. Subscription tier
This tier is designed to provide regular access to new course content and features. You can offer a monthly or annual subscription fee that grants customers access to exclusive content, such as updates, advanced courses, and access to live Q&A sessions with instructors. Subscription tiers are a great way to build a recurring revenue stream for your business.
4. Premium tier
This tier is designed for customers who are willing to pay a premium price for access to exclusive content, personalized support, or additional services. You can offer customized coaching, personalized feedback on assignments, one-on-one sessions with instructors, or access to exclusive events or workshops. The premium tier should provide a unique experience that is not available at the other tiers and should justify the premium price.
To implement this tiered pricing model for your online courses, you can use a learning management system (LMS) or course platform that supports multiple pricing tiers. Many LMS platforms have built-in features that allow you to offer free, paid, subscription, and premium levels. You can also use a payment gateway or e-commerce platform to process payments and manage subscriptions with nextgen training platform like Ucademy. Be sure to choose platforms that are user-friendly and support your business goals.
Overall, offering tiered pricing for online courses can be an effective way to build your customer base, generate recurring revenue, and provide a range of options to meet the diverse needs and budgets of your audience. By understanding your target audience and carefully crafting your pricing tiers, you can create a pricing model that maximizes customer value and drives business success.
One important consideration is the content you provide at each tier. You want to make sure that your customers feel like they are receiving value for their investment, whether it's a free course or a premium tier. You should also ensure that the pricing tiers are clearly defined and communicate the value proposition of each tier.
How to add more value to your online courses
Adding value to your online courses can help you differentiate yourself from the competition and attract more customers. Here are some ways to add more value to your online courses:
1. One-on-One Coaching
Offering one-on-one coaching as part of your online course can add significant value. It allows students to receive personalized attention and tailored guidance. You can offer coaching sessions via video conferencing, phone calls, chat box or email.
2. Survey Tools
Using survey tools such as Google Forms or SurveyMonkey can help you gather feedback from your students. Some next generation training platforms like Ucademy has integrated survey tool in the system. This feedback can help you improve your course content, identify areas that need improvement, and better understand your audience's needs.
3. Combo Promos
Offering combo promos such as \"buy one course, get one free\" or \"buy one course, get a discount on another course\" can add value and encourage customers to purchase more of your courses. You can design your combo in your training platform and show your audience the value they will get with promotion price.
4. Blended Learning
Blended learning is a combination of online and offline learning. You can add value to your online course by offering offline activities, such as in-person workshops or meetups. These activities can provide students with hands-on experience and networking opportunities.
5. Mobile Learning
More and more people are accessing online courses on their mobile devices. Offering a mobile-friendly course platform can add value to your online course by making it more accessible and convenient for students. Many nextgen training platforms like Ucademy, TalentLMS, offer mobile apps alongside with web based platform in order to add more value to their users.
In conclusion, pricing your online course correctly is essential to attract customers and ensure profitability. Consider factors such as your course content, course type, audience, competition, course format, and production cost when determining the price. You can also add value to your online course by offering one-on-one coaching, survey tools, combo promos, blended learning, and mobile learning. These strategies can help differentiate yourself from the competition and provide a better learning experience for your students. Create a branded online school with no code skills with Ucademy. Start your free trial today!