One of the most difficult things to do is put a price on something you have created. When that creation is largely subjective, it gets more difficult. In this post, Jonathan breaks down the major factors and methodology that will help you find that magic number. He covers the cost of production, the value to the student, and other factors that can impact your perfect offer.
How much should you charge for your online course?
Pricing high-quality content is easier said than done. Ideally, it would help to find the right balance between what your content is worth and what your target audience is willing to pay.
The best way to do this is by creating a solid pricing framework that makes it easy for prospective customers to decide how much you should charge for each online course.
In this article, we’ll dive deeper into the factors that can impact the price of online courses and the four ways you can set prices for your online course.
Factors that impact the price of your online courses
When setting the price for your online course, consider the costs associated with creating one. For instance, this includes the time it takes for your team members to create content for your online course so you know how much it costs your business in labor costs.
The final price of your online course also depends on the experience of your team members or the impact your business has within an industry. For instance, if you’re offering detailed information about a topic, you can charge more as it correlates directly with the amount of experience your content writer has. Similarly, if your online course requires constant updates as the industry changes and new trends arise, you can expect to price it higher than evergreen online courses.
Considering the marketing and promotional costs of launching your online courses is also a good idea. If your business incurs costs promoting online courses, you need to set a price that offsets those costs for your business so it doesn’t hurt profit margins.
For instance, if you’ve spent a total of $2,000 on paid ads, SEO optimization, and posting guest posts on other blogs, you need to add a percentage of the costs incurred to the final price of your online course.
Also, check out our article on The Right Online Course Pricing Strategy for YOUR Business.
4 ways to price your online courses accurately
Here, we’ll show you some of the most effective ways you can start to price your online courses accurately.
#1: Cost based pricing
One of the first and most effective ways to price your online courses is by considering the costs of creating one and applying a reasonable profit margin.
Cost-based pricing of your online courses is simple and removes the need to predict profit numbers for your business. This is because you can consider the costs associated with creating an online course, like paying your team members or the time spent creating high-quality content for your online course. You can then decide on a profit margin according to the value your online course offers or your target audience. Keeping your profit margin ratio low is essential, especially if you’re starting or have competitors offering the same value for less.
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When pricing your online course using a cost-based pricing analysis, you also want to consider the tax fees and additional costs related to creating your online course (like software subscription fees). Ideally, you want your customers to pay for all the costs associated with creating and maintaining your online course while you keep a small profit margin for yourself. This simplifies the online course pricing process for your business and is a great way to encourage more sales for your online course site.
In addition, you want to consider how many sales you expect to get for your online course. If you desire around 200 sales, you can price your online course lower than if you were expecting only 50 sales.
#2: Pricing based on competitors
If pricing your online courses based on the costs incurred doesn’t work for your business, another way to do this is by considering the prices your competitors are charging for their online courses. You can conduct a detailed market analysis and study other brands offering the same online courses as you to understand pricing within your industry better.
For example, if you’re launching a new fitness course, you can look at other fitness online courses that offer the same value as your online course to determine an accurate price for your online course. Let’s say other brands are offering fitness courses for $50 but have fewer features or cover fewer topics. You can take advantage of this opportunity and price your online course a little higher as you’re offering more value to your customers.
You don’t want to price it lower than your competitors because it may give off the impression that your online course offers less value or isn’t as polished as other brands. In other words, it would affect your online course’s perceived value.
In addition, to gain a competitive edge against other competitors within your industry, you can also price your online course at the same price as theirs but offer more value. This encourages more sales for your business and helps build more brand authority.
#3: Value pricing
Value pricing is a way to price your online course based on its perceived value by your customers instead of basing it on production costs.
Let’s say you price an online course at $500 that teaches your target audience how to start generating revenue from creating YouTube content. Your students can go through your course and begin publishing videos within 3 weeks. This helps showcase the “actual” value of your online course and offsets the high price of your online course for your target audience as they gain much more.
Similarly, if you create an online course that helps your students land a blue-collar job that pays at least $100,000 per year, you can price your online course at $1,000 as the perceived value is very high. It’s worth it for your target audience to invest much of their money to grow their career or land a job that pays them well. Compared to the outcome they’ll get or the perceived value your online course offers, your target audience will not have a problem paying a high price for your online course.
#4: Use a subscription pricing model
Another way to price your online course is through a subscription pricing model. A subscription pricing model is a way to charge learners a recurring fee to access your online course content.
Let’s say your students pay a $55 recurring fee each month to access course lessons instead of a one-time payment of $250. This way, more people can get access to your online course.
However, businesses must offer continuous value to their subscribers when offering subscription-based pricing for online courses. This is because if you’re offering limited content, there’s a high chance most users will not renew their subscription plan the next month. Ideally, you want to offer new monthly content to encourage existing subscribers to continue their membership plan.
A subscription-based pricing model suits brands with a vast library of online courses and high-quality content. This is because they can incentivize their target audience with access to high-quality content by subscription rather than purchasing multiple online courses at once.
Frequently Asked Questions
Q: How do I determine the price for my online course?
A: When determining the price for your online course, consider factors such as the value of your course, the type of course, the course material, and the perceived value of your course to the students. Additionally, you can use online course pricing calculators or test different price points to find the optimal price.
Q: Should I choose a higher price for my online course?
A: Choosing a higher price for your online course depends on the perceived value of your course, the target audience, and the competitive landscape. It’s essential to strike a balance between pricing your course competitively and reflecting the value it provides.
Q: What pricing strategies can I use for selling my online course?
A: You can consider various pricing strategies, such as offering different price points for other course packages, providing a free online course as a teaser for a premium course, or launching your course at a lower introductory price before raising it to its regular price.
Q: How can I determine the right price point for my online course?
A: To determine the right price point for your online course, research the market, understand the pricing strategies used by competitors, and assess the value proposition of your course. Test different price points to gauge the response from your target audience and make adjustments accordingly.
Q: Is it advisable to charge a lower price for my online course?
A: Charging a lower price for your online course can be beneficial for attracting a wider audience and encouraging more sales, especially if it’s your first online course. However, it’s crucial to ensure that the price reflects the value of the course and doesn’t devalue the content or the effort put into creating it.
Q: What factors should I consider when pricing my course for the course business?
A: When pricing your course for the course business, consider the content’s quality, the expertise it offers, the market demand, the length of the course, and the value it provides to the target audience. It’s essential to strike a balance between competitiveness and the perceived value of the course.
Q: How can I increase the sales of my online course?
A: You can increase the sales of your online course by adopting various marketing strategies, offering promotional discounts, leveraging social proof, creating compelling course content, and continuously assessing and adjusting the course price based on market responses.
Setting an accurate price for your online courses doesn’t have to be complicated. With a pricing framework that works with your brand’s unique content style and target audience, you can price your online course in a few simple steps.
To recap, you can price your online courses according to the costs incurred, your competitors, your online courses’ value, or a subscription-based pricing model.
However, there are a few tips to keep in mind when pricing your online courses:
- You don’t want to overcharge and discourage your customers from purchasing your online courses. For instance, If other competitors are pricing an online course at $50, you also want to stay in the same ballpark, especially if your online course offers your target audience the same benefits and features.
- While charging a set price for your online courses is always better, setting up flexible pricing effectively boosts sales. You can offer multiple subscription plans or let customers pay in installments for your online courses to maximize sales.
- You don’t want to get ahead of yourself and charge a price that doesn’t offset the costs your business incurs when creating the online course. This is why it’s essential to keep your expenses in check when determining the final price for your online course.
- Don’t undercharge for your online courses, as it may give off the impression that your content is low-quality.
What kind of pricing model are you thinking of using for your online course? Let us know in the comments box below.