After putting passion, effort, time, and financial resources into creating your online course, you have to choose a price. This is where most knowledge entrepreneurs get stuck.
For many, pricing their online courses is a tough decision.
This is only natural. As a course creator, you’re good at teaching what you love. Yet, you might not have had a business before or the financial background to know how to price your work to make it worth it. Also, many course creators fear that high prices will turn their audience away instead of luring them in.
Well, this is far from true. Find out why higher course prices actually have a good impact on potential learners. Then, use our step-by-step guide on how to efficiently raise your online course price to generate more profits, keep your existing learners, and attract new ones.
Why a low online course price isn’t good news
It might seem counterintuitive, but often, low prices have adverse effects on potential learners. Instead of capturing their interest and attention, they may turn them away. The explanation lies in the psychological impact numbers have on us and our purchasing habits.
We perceive pricey items as top-tier products...
Even if we can’t afford them and have never tried them, we don’t even question their quality. If a bag costs 3,000 dollars because it’s produced by a top designer, then it must offer something good for its price point. The same principle applies to just about any other product or service.
...Low prices have the opposite effect
People believe they get exactly what they pay for. They associate low prices with low quality.
Therefore, applying a low-price strategy can be detrimental to your business. Charging significantly less than your competitors can diminish the perceived value of your courses and have an off-putting effect on your potential learners.
Moreover, constantly selling your courses at low prices can become frustrating. You might believe that investing all that time and effort is simply not worth it. Consequently, you risk giving up on what could be a successful online course business. Also, low prices won’t support your business’s marketing needs because you’ll have a limited budget. More so, customers who are looking for the lowest prices might not be the people that you want to attract anyway. They’ll be more likely to switch to a competitor who charges less. Plus, they will not stick with your courses if you increase the price.
Read more: 7 Cognitive biases to boost conversion rates in online courses
How to raise your online course price
Here are a few steps you can take to raise your course prices gradually. From analyzing and understanding your competitors’ prices to figuring out when and how to raise yours, here’s what you should consider.
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Study your competition
Choosing your online course price should result from thorough research. Before you put a price tag on your courses, you have to be aware of the price range in your niche. This means studying other course creators’ offerings. Try to understand what your competitors offer, don’t just check their prices. Here are a few aspects to help you figure out why your competitors charge a certain price:
- The online course’s length;
- How many different topics it covers;
- The complexity of the course (generic vs. in-depth course — the latter costs more);
- The practical skills taught (e.g., video tutorials in which the instructor puts their knowledge into practice?)
- The evaluation steps (courses that also have different quizzes and assignments can cost more because they require more effort to create, even with LMS automatic evaluation features);
- The type of course format and resources involved in producing it (video, audio, written content, it all matters as recording a video course costs more than selling e-books);
- Complimentary materials (e-books, podcasts, etc. — some knowledge entrepreneurs offer free access to these resources if you purchase their courses).
Read more: How to research your competition as a knowledge entrepreneur
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Assess your online course’s value
Make a list of what your major competitors offer for their price point to figure out what fair pricing means in your industry. Also, don’t try to beat your competition by slightly underselling them. Establish a fair price for what you offer, which might be different in terms of length, content, or format from your competitors’ courses.
Create another list of all the perks your course has. This will allow you to understand how much you can charge for it by comparing your offer to the existing ones. Also, it will help you avoid underestimating or overestimating your work.
If your competitors offer more than you currently do, there is no problem in starting from a lower price point. What matters is to price your courses correctly for the value they offer. Moreover, your competitors’ courses can be a reference point for further expanding and improving your work.
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Gradually increase your online course price
Suddenly raising your prices by 25% will be shocking for your customers. Such a shift can also lead to negative feedback, which you want to avoid, especially if you sell your courses on a marketplace where you compete with other course creators. Therefore, the best approach is to raise your prices gradually. Here are two ways to go about it:
- Increase the price bit by bit over a longer period without altering the course content. This is the easiest way to earn more as you’ll offer the same content but charge more. However, you should wait for some time (usually months) after each price increase. Study your learners’ feedback during this time. Outstanding reviews are a good sign that people will be willing to pay more for the same course.
- Raise the price after changing the course structure as this will justify the price increase. You can change the course by adding more modules, tutorials, assessments, or materials learners can download, such as e-books and other types of digital downloads. Make sure you advertise these improvements (via newsletters, social media, and directly on the platform where you sell courses). Thus, people will understand the reason behind the new price.
- If you haven’t started selling courses yet, a good strategy to apply fair prices that reflect your hard work is to start small. If the course is long, divide it into different smaller courses (which we will call modules here) and gradually release them to be able to increase the prices as you start gathering an audience. Here is an example: Overall course duration: 20 hours Course modules or chapters: 10 (two hours each) Price per course and release schedule:
This is how you can structure an online course of 20 hours, divided into 10 two-hour modules.
Establish your prices based on your learners’ feedback and sales. If the course is an instant success and there is high demand, people will more than likely be willing to pay a few bucks more to access all the modules.
Furthermore, an effective way to boost customer engagement is to offer discounts when releasing your final modules. These don’t necessarily have to apply to all your learners. You can send a newsletter, which is an evergreen online marketing strategy, and announce that you will offer a 10% discount to the first 50 people who purchase the final course modules. Besides, this will also help you increase your customer lifetime value.
This is easy to do with LMS automation. For example, after someone finishes the first module, they can automatically get a discount coupon to buy the second module and so on.
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Monitor your sales after each online course price increase
Regardless of the strategy you apply to increase your courses’ prices, you need to monitor your sales after making these changes. Thus, you will understand if you’ve made a good decision money-wise.
If you market and sell courses through modern platforms such as a learning management system (LMS), tracking sales is easy. LMSs have different e-commerce features that automatically monitor your sales. So, you don’t have to waste time crunching numbers. You'll get accurate real-time sales reports when you log into your account.
If you sell courses on a marketplace or use your own website and integrate different e-commerce tools, you still have access to sales and profit information. Make sure you constantly check it, at least once per week for the following weeks after the price change. If possible, configure notifications to automatically get updates by email with each new purchase. This will help you quickly figure out if your sales stagnate or grow with the price change.
Read more: 6 E-commerce hacks for getting higher sales on your online courses
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Stick with the best price based on your profit and loss
When you raise your course’s price, you’ll have to do some accounting work to figure out if the change has positive results. Basically, you have to understand whether the price increase brings you more profits or, on the contrary, leads to loss.
Calculate your profits as the difference between your revenue and your course-related expenses. Thus, you’ll have a clear idea of how much you’re earning after increasing your online courses’ price. For example, you earn 2,500 dollars per month by selling ten courses for 250 dollars. But maybe you’ve invested 250 dollars in Facebook or Google ads or you needed to record new videos. Your profit is actually 2,250 dollars after deducting your expenses. So, if you aim for a monthly profit of 2,500 or above, calculate how much you should charge per course based on your average expenses.
To determine if you’ve incurred losses following the price increase, you have to figure out the impact of lost sales. See if the learners you’re losing due to the higher prices are not more valuable than the ones you gain. Here is an example.
- You initially sold 50 courses at 50 dollars each over 30 days, which meant 2,500 dollars per month.
- You increased the price by 10 dollars and still managed to sell 50 courses over the following 30 days, earning 3,000 dollars.
- You increased the course’s price again to 70 dollars but only managed to sell 35 courses that month and earn 2,450 dollars, which is a loss.
Read more: How to set a price for your online course
Based on this calculation, your ideal price point is 60 dollars/course. This is the maximum amount you can charge to have a steady number of customers and gain more profits. Charging more actually means losing customers. Although the course is higher-priced, you earn less.
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Reinvest in your skills and your online course business
The best way to make the most out of the new profits generated by increasing your course price is to reinvest in your business. One way to do this is by upgrading your courses. This means adding new, more elaborate materials or more complex assignments to evaluate your learners. You can also expand your courses by providing more video content. Video courses have different advantages and represent one of the most engaging course formats nowadays.
Finally, another way to reinvest in your courses is by upskilling yourself. No matter how good you are at what you’re teaching, there must be something new for you to learn in your field. Take courses yourself, get certificates or simply explore new areas in your niche. All these will give you the knowledge and inspiration to create more engaging courses in the future.
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Don’t underestimate the importance of marketing your online courses
Learning how to price an online course to generate more profit in the short term is great. But thinking in the long-term and constantly gaining more from your online courses is even better. You don’t have to be a visionary or experienced businessperson to do this. You simply have to create a plan and stick to it. And one of its basic steps is to focus on marketing your online business.
Investing days in creating high-quality courses won’t help you yield profits unless you also promote them. To learn how to do this, you can get back to Step 1 – study your competitors. You don’t have to copy their marketing strategy. On the contrary, try to come up with something original. What will help you, however, is knowing what channels they use to promote their courses. This is essential because that’s where you’ll also find your audience.
So, take some time to see what your competitors do to reach out to their learners. Do they use Facebook, Linkedin, or Google ads? Do they have a popular blog where they constantly post new articles or an Instagram account with thousands of followers where they create contests and offer giveaways? All these are strategies you could use for your online courses too. But again, remember not to copy everything your competitors do. Try to offer something similar with a personal twist.
How high is too high a price for my learners?
Unfortunately, this is the part where you’ll have to find an answer on your own. The highest and lowest prices in each industry are different. Just take a look at a few different examples and it’ll be very obvious to you.
People are willing to pay a different price to learn how to speak a foreign language compared to learning how to use Adobe or Java. You need to study the price range in your niche only. You can try using an online course price calculator to learn how to price an online course in your industry and make sure you’re not charging too much or too little.
Conclusion
Raising your online course price is not easy, but you shouldn’t feel like you’re selling out because of it. In reality, low prices give your courses a bad reputation and could actually turn potential learners away. At the same time, you need to do this in a sustainable way. The process starts by studying competitors to realize how much they charge for similar content. Then, you can gradually increase your online course’s price. After each price increase, it’s important to track sales to determine whether the new value makes or breaks your profits. Finally, once your business becomes more profitable, reinvest in it by upgrading your courses and focusing on your marketing strategy.
