How To Price An Online Course
Content is done, promotions are ready, and the last item on your pre-launch checklist is how to price an online course so that people will sign up. Pricing can be one of the trickiest elements of launching a new course online because it is a balance of finding that sweet spot of providing value to your target audience at a price they’re willing to pay.
Appropriate online course building and pricing can help a content creator make the move from a side gig to full-time work. Well-developed online courses can drive revenue and even sponsorships for your website or brand.
Ready to get started? Here are some pricing considerations to think about before launching a new online course.
Pricing Online Courses Starts with Course Types
Online course expert Sarah Cordiner says that all content falls into one of five types of online courses. Of course, the type you plan to offer can correlate to value and pricing strategy. It’s important for content creators to keep this in mind as they develop online courses.
- Lead Magnet Mini-Course: Generally, this is a free and short online course that helps get people interested in greater content. The mini-course may be the first lesson of a more comprehensive paid course that serves as a marketing lead.
- Kickstarter Course: These courses are a gateway for content creators into course development. These online courses might mimic other content you are creating, such as a how-to blog post series, in a different format. These courses are often low-priced (less than $100), aren’t long in duration (can be completed in a few minutes to an hour), and are ideal for creators that already have credibility and followers.
- Authority Flagship Course: When you think of online courses, the Authority Flagship Model is probably what comes to mind first. These are courses with an established instructor that’s got plenty of credibility in their field, are moderately priced ($100 to $3,000), and include repeat logins or sessions (lasting about one hour each over several weeks). These courses include information that you can’t get elsewhere, such as a tutorial or in-depth explainer of a topic.
- Supportive Coach-Lead Course: The content may be similar to an Authority Flagship Course, but the delivery is different. These courses are designed for self-study and independent, rather than mass, learning with touchpoints with the instructor. These online courses are higher-priced ($500 and up), include multiple sessions and one-on-one meetings, and plenty of information to help you succeed individually.
- Membership or Online Academy Course: This group class is structured with multiple classes in a series that build on one another. Students might participate in different tracks to earn credentials or certifications. The pricing strategy is less about the cost of an individual course, but for the module as a whole using a subscription-based model ($10 to $100 per month).
No matter which online course strategy you choose, you need to do your homework to ensure that you are developing a course that people will want to take. It starts with research, audience understanding, marketing, and content development.
4 Pricing Models for Online Courses
Once you have developed a course and know what type of class you’ll offer, it’s time to really start thinking about pricing. There are four true tiers of online course pricing: free, baseline, and premium.
Free courses are a great tool to help drive business and get people interested in the course content you have to offer. A free course or sample lesson can also serve as a test strategy for something you plan to evolve or further develop as a paid course later.
Baseline courses reach a wide audience with content that appeals to a lot of people at an economical price point. These courses should be quick to create, not involve huge participant time commitments, and include topics or information that goes in-depth, but doesn’t get too technical. These courses may result in a lot of signups with low participation because of the low-risk price point.
“When you give a coupon for a free class, the completion rate can be in the low single digits. When you charge for the same course, the completion rate can be 30% or 40%. The more you charge for a course, the more people actually complete it,” said Ankur Nagpal, CEO and founder of Teachable.
Premium online courses are the goal for most content creators when they are thinking about pricing strategy. These courses have the highest price points but must deliver high-quality content at the same time. Course material must be unique, have a well-known instructor, or be something that you can’t get anywhere else to justify the price point.
Think of a premium online course as being on par with a university-level experience or led by a “celebrity” in a masterclass format. These courses won’t garner as many signups as baseline courses but often have high participation and engagement rates.
Subscription model courses offer membership payment options for your customers. This can be in the form of daily, weekly, monthly, or annual subscriptions. Once a member, your customer gets access to your gated content.
Online Course Pricing Strategy
One of the best formulas for pricing online courses comes from Online Course Igniter.
It starts with a little audience research so that you know how many people could potentially be interested in your online course. This audience could change for every new course, depending on the content.
From there, you’ll want to think about how much money you want or need to make from the course. Do you have costs that you need to cover to break even? Do you have a set goal for income from each online course?
Then you are going to take a deep dive into your audience analytics. At this point, you probably have an email list, social media following, landing page, or another method to collect and interact with people who are interested in your content. What you need to determine is how interested they are to come up with an average conversion rate for that audience.
Then you can plug all the data into the basic formula to determine pricing and revenue:
Revenue = Audience Size x Conversion Rate x Price
Don’t forget to subtract any costs from revenue to determine actual profit on the online courses you create.
The final element of pricing strategy is ensuring that course content aligns with the price. It’s unreasonable to ask someone to pay $1,000 for 10 minutes of information. Thinking about pricing models and perceived value will help you choose a pricing strategy that works for your customer base.
How Much Should You Charge for an Online Course?
So, it all comes back to the central question: How much should you charge for an online course?
Thinking about course type, pricing models, and then a full pricing strategy the answer may be more clear than you think. (You should at least narrow it to a range quickly.)
Then you are ready to launch your online course. LearnDash will help you convert your course content into a great user experience that people will want to take part in. The online course platform was created by e-learning experts and has all the tools you need to create a course that will be in demand.
LearnDash gives you control over the whole process, including pricing models and the ability to offer upsells.