When you start a business centered around something you love to do, it can be relatively easy to lose sight of the financial aspects. In the case of online course creators, the entrepreneurial game can be quite challenging because teaching, coaching and sharing information can be so easy and to some, it may seem unfair to charge people for it. And ever so often, the opposite happens – some learning professionals value their know-how and delivery much above what it’s typically appraised on the market.
Pricing an online course is very important for several reasons. First, it will make or break your profitability. Second, it is the first indication of the value of your work and your expertise. If you set the price too high, it may discourage potential learners, yet if you set it too low, they may feel like they won’t get quality.
If you are in the position of not knowing exactly how to set a price for your courses without going in either extreme, here are some ideas.
Factors to consider when pricing your course
As with anything important, many variables come into play when deciding on the right value of an online course. Here are four factors that you should take into consideration:
The competition plays a very important role because when people are looking for courses on a specific topic, they will weigh in all the possibilities. You can definitely go higher up than your competitors if you feel confident that you have a unique feature that is worth a lot, and you can advertise appropriately. However, it is best to keep within the same range where the monetary aspect is concerned, and you can differentiate yourself by other means. Especially in uncertain times when people are careful with their pennies, it is important that what you are selling feels reasonably priced.
The length of the course is highly relevant as well. No matter how good you think the content is, you can’t possibly ask the same for a micro-learning module or for a four-hour course. If you have lengthier material and decide to break it up into episodes, you can choose if you want to ask for a certain price for all of it or different fees for individual pieces. Of course, the time and effort you put into building the course are important too, but ultimately, it’s about user perception, so it needs to come first.
Read more: 4 Ways to create meaningful microlearning in your online course
Your income goals should also weigh in on how much you decide to charge for your product. Keep in mind that you have to find balance in this as well – it’s all right to be ambitious and know your worth, but it’s equally relevant to be more or less in the parameters that are already set by the market. If you feel that your objectives are not achievable this way, you may have to rethink the content or the packaging to get closer to the mark.
Your authority in the field is highly relevant when setting a price for online learning. If you have already achieved the status of subject matter expert and have an audience who can vouch for that, it’s easier to set a higher price and feel justified to do so. However, if you are just starting out, even if you have the academic credentials, it’s best to start low and build your way up. Reputation is more important than academic achievement in the online environment.
Read more: 6 Personal branding tips for knowledge entrepreneurs
Setting a price strategy
When you decide what you will be asking for your online course, you have to think long-term. Granted that the start is highly important, but since you want to be a successful entrepreneur, you will need a strategy.
The two basic pricing models are one-time and recurring. The first lets learners make an upfront payment to access the material; the second is more profitable for sellers, as payments occur on a recurrent basis – most often monthly.
One strategy I highly recommend is to set pricing tiers for your online courses, starting with a complimentary one.
- Offering a free course has the benefit of allowing you to demonstrate your skill and expertise to a larger audience and gather precious leads for your pricier material. It can be a mini session rather than a full-length course since the goal is to give potential learners a taste and create relationships you can then cultivate for your mutual gain.
- Implementing one-time payments for various modules is the simplest way of allowing customers access to your materials. It’s a straightforward quid pro quo scheme and the parameters of the transaction are clear to both sides.
- Subscriptions are more lucrative in the long run and have the advantage of cultivating relationships with the learners. There is also more work involved for you as an entrepreneur, as in order to have a successful membership site, you’ll have to offer various types of content and continuously nurture the subscribers’ engagement.
- Taking a page from the insurance companies’ book, you can opt for offering your subscribers premiums. This way they pay more but in installments. The key to making this work is to provide high-quality content and maybe even certifications. You’ll have to be on the market for some time and have an excellent reputation to be successful at running your learning business this way.
Businesses are ultimately about money, and just because you chose to build yours around something you are passionate about it doesn’t mean profits need to be lower. You have to objectively evaluate what you are offering, compare to what else is on the market, and develop a pricing strategy tailored to your products and your aspirations.