As a course instructor, generating dependable and recurring revenue by creating and selling online courses is a lucrative business opportunity.
However, to monetize your online course, you need to first settle on the right pricing model. While some course instructors choose to sell their courses for a few dollars, others sell them for a few hundred (or even a few thousand!) dollars.
In this article, we’ll explain how you can find the right price point for your first online course. Before we begin, let’s take a look at the fundamental tiers of online course pricing.
3 Fundamental Tiers of Online Course Pricing
There are three basic tiers of online course pricing: free, baseline pricing, and premium pricing.
If you give away your online course for free, it’s important that you do it the right way. When most people think of free stuff, words like “cheap” or “low value” come to mind. By setting a price tag to your online course, you’re automatically presenting it as a valuable product.
Think of it this way: when people invest in a product or service (such as an online course or training program), they make more effort to follow through with it. They’re also more likely to be engaged with the course content and perform better in quizzes and assignments. This is why people who purchase a course are more likely to complete it as compared to those who sign up for free courses.
Once you attach a monetary value to your offering, your target customers will associate your course with how much value they can expect to get by completing it. Otherwise, a free course tells them that it’s probably not worth signing up for.
The right way to offer free content to your audience is by giving away sneak peeks to your course videos or by publishing articles about the topics you’ll cover in detail throughout the course.
You need to make sure that the majority of your target students (1) can afford your product and (2) see the value proposition.
A great way to position your online course in front of a wider audience is by setting your price level at an appropriate baseline (around $100). This is especially great for first-time course creators.
The goal is to settle on a price point that gets you a decent number of course registrations while preserving the perceived value of your online course. Depending on how long your course is and the topics you cover, your baseline price might be slightly lower or slightly higher.
If you think that your course content has the potential to bring in top dollar, you might consider setting a higher price point. As a result, you’ll be able to create a sense of value around your online course while boosting student engagement. This will also make it easier to achieve your revenue goals without requiring as many registrations.
That said, it’s worth noting that higher course prices will result in fewer subscriptions. Depending on how your course is structured and the added value you provide (such as one-on-one coaching sessions), this might work to your favor.
Once you’ve settled on a pricing tier, you can jump right into the pricing process.
Pricing Your First Online Course
Here are a few factors to consider when setting a price tag for your first online course:
#1: Decide How Much You Want to Earn
The first thing you need to do is think about your income objectives. Here are some questions to ask yourself:
- How much do you expect to make selling your online course?
- Are you looking to make this a primary source of your income?
- Or do you just want an additional revenue stream to support your finances?
For example, let’s say you want to make $6,000 from your online course business.
- If you decide to charge $100 for each course, you’ll need to sell to 60 people to reach your income goal.
- Similarly, if you charge $200 for your online course, you’ll have to sell to 30 people to make $6,000.
- And if you choose to price your course at $600, selling to only 10 people will get you to your target number.
Keeping this example in mind will help you understand how many sales you’ll have to make to achieve your target income goal and make it easier to set a price.
Alternatively, you can think of how many people would be willing to purchase your online course. For instance, if you think you can get a 2% conversion rate from your email list then that can also help you decide on a price for your course.
This way, if you send emails to 1,000 people, and 20 people express interest in purchasing your course, you’ll have to sell your online course at a minimum price of $300 to reach your income goal.
#2: Create Multiple Forms of Content
Once you’ve decided on the price tag for your online course, you need to make sure that you offer equal value to your customers. If you want to charge a higher price, you should also deliver more value through your offering.
You can increase the value of your courses either by offering bonus content or improving content quality. Here are a few suggestions worth considering:
- Create a content upgrade. You can use editable workbooks or other downloadable resources as a lead magnet that your students can use to track their progress throughout the course duration.
- Host live Q&As. If your online course is delivered to a live audience (which means everyone is attending at the same time), hosting live Q&As can help you increase your course value. You can schedule a few sessions throughout your classes and answer student questions. This way you’ll be able to increase the value of your course by several hundred dollars based on how many Q&A sessions you host.
- Create a community. You can create a community for your students where they can communicate with each other and share ideas. The easiest way to do this is by setting up a community on Slack or creating a Facebook group. You’ll be able to decide how you’ll be monitoring your community. Alternatively, some WordPress learning management systems come with community features built-in.
#3: Focus on the Benefits
Another important factor to consider is the value your customers will get by paying for your online course. People get PDFs, webinars, and downloadable resources from almost every course they purchase. Your goal is to help them understand how your product will solve their problem or improve their life.
This is where you need to look at your online course from the customer’s perspective. Identify the main reasons why someone would (or rather, should) take your course. For instance, it might be to change their career path or to learn new skills. Ask yourself: what is their motive behind the purchase and how can your online course help them achieve their goal?
If you present your course as an investment, it will tell your customers that they’ll be able to improve their lives or achieve professional goals. Similarly, positioning your product as a solution will help students understand how your course will help them solve their pain points. You need to assure your audience that your online course will enable them to turn their current situation into a more favorable one.
#4: Add Pricing Tiers
Creating pricing tiers is a great way to make your course affordable for a larger chunk of your target market. In addition to this, it also gives students the option to only pay for the content they want.
The first step in creating your pricing tiers is to decide which content will be offered as bonus content. Decide which will be of the most value to your customers and give you the highest ROI. Next, evaluate and select an appropriate price for each piece of bonus content. Once you’ve done this, you’re ready to create your pricing tiers.
Here’s an example to walk you through three different pricing tiers:
- The first tier should comprise of your basic online course and any additional PDF resources (a small version of bonus content). This tier will be offered at a lower price point e.g. $100.
- For the second tier, you can bundle up one or two more premium bonuses. These could include a group coaching session, making this tier worth $100 more. You’d sell this offer for $200.
- In the third tier, you can package the rest of the content you left out in the first two tiers such as a one-on-one coaching session. This will be your priciest tier, around $300.
To build a successful online course, you need to identify the right price point for your product offering that matches the value it delivers to your customers. Whether you decide to sell your first online course for a few hundred dollars or start out at a lower price point, you’ll be well on your way to generating recurring revenue.
Do you have any pricing tips of your own that you’d like to share with other course creators? Let us know by commenting below!