Low is not always better: raising your price could help you sell more courses.
And, unfortunately, it’s not an easy problem to resolve. Many educators eventually settle on a number that is little better than a best guess. If their course doesn’t sell, they assume they’ve asked too much. As they continue to lower the price of their course, they start down a never-ending spiral of high-effort and low returns.
There are, of course, many cases where charging a little (or nothing at all!) can be the right move. These include:
- You’re just starting, and you need to increase publicity.
- You’re about to retire the course in favor of an updated version, and this is your bargain sale.
- You want to offer it as bonus material for another, larger purchase.
- You’re using it to up-sell something else.
These are all good reasons to drop the price of your course, or even to offer it for free.
However, many online learners perceive low cost as low quality. Without trying both courses, they see price as a proxy for value. You may have a higher-quality course than your competition, but if you aren’t charging enough, your potential buyers may not realize the great deal they’re passing up.
As contrary as it may seem, raising the price of your course may land you more sales. The question is, how do you do that without alienating the buyers you already have, and how do you know when you’ve raised it too much?
These questions are far too complex for a single blog post, but if you’re stumped, here’s a few tips to get you started.
1. Look to your competition (but don’t try to undersell them).
You should know how your competition is pricing their courses, but as we said, don’t think you have to “beat” their price by offering your course for just a little less. You may gain a few price-conscious buyers, but you may also inadvertently brand your course as the “cheap” option, and that’s not a word most learners like to associate with their education.
Instead, look at what they’re offering for their price point. If they’re offering more than you are, it may give you an idea for how you can expand your course and increase its value. If they’re offering less, then that’s an indication you can charge more for your course than whatever they’re offering. If offering a course similar to yours in scope, but at a higher price point, that’s a strong indication you’re selling below the market rate.
2. Can you deliver the same value as more expensive alternatives?
Education is expensive. If your learners want to gain a skill, many of their alternatives are going to be priced in the hundreds of dollars. Community colleges, private consulting, and weekend seminars are all excellent ways to learn new skills, but they’re all considerable investments of time and money, especially once traveling expenses are taking into account.
The question is, are these events better at delivering value than your online course? If the value of the content you provide in your course is equal to what your learners would gain from a seminar, there’s no reason you should sell your course for less.
3. Are you charging for the value you add over cheaper alternatives?
Another sign that your course is underpriced is if it costs about the same as other DIY options. For instance, most textbooks and training materials already cost in the $50–100 range. If your course costs the same amount as a text book, some of your customers might wonder if you’ve added any value to the material.
What most adult learners really want is a course that can make the learning process more efficient, and they’re willing to pay a premium to get it. They would much rather spend $300 on a course that can teach them what they need to know in 5 hours than $50 on training materials that will take 15–20 hours to study.
If you start to break down the cost of alternatives for your learners, making the case for your own course will become a lot easier.
4. Increase the value of your course (but not necessarily the length).
Of course, if you’ve already sold your course at one price, some of your customers may wonder why they should start paying more. In this case, you will need to justify the increase in price, and the best way to do that is to demonstrate added value.
Updated material is the easiest way to do this, and it offers a built-in mechanism to slowly raise the price of your course with each passing year. (“Updated for 2016” = $315. “Updated for 2017” = $325. “Updated for 2018” = $335, etc.) With each update, you replace or phase out the old version, and for most learners the change is incremental enough not to worry about.
Or, you can start offering new features to justify the increased price, such as new video content or an ebook download. It only takes the addition one piece of high-value content to raise the price of your online course for all your future sales.
That said, added value does not need to mean added length. There’s no need to make a 5-hour course 15 hours long if you’re not adding anything of significance. After all, efficiency is probably what adult learners value most in online education.
5. Look for the tipping point.
How do you know you’re charging too much for your online course? When the raise in price doesn’t make up for the lost sales.
Let’s say you start out selling your course for $100. You sell 10 course and make $1000.
Next, you raise your course to $150. You sell 15 courses and make $2250. Smart move!
Next you raise your course to $200. Your sales drop back to 10. Now you’ve made $2000.
At this point, you can see that the price increase has turned against you. You can still play around with the numbers (can you sell 13 courses at $180?), but this should give you a good idea of how much your audience will spend on your course.
The bottom line is, you can (and should!) experiment with the price point. As long as you can keep landing sales, you should keep charging more. It’s unlikely your sales will take a nose dive in you increase the cost by $10, and it’s easy enough to back down if you encounter too much resistance.
Don’t forget to save room for marketing.
One of the biggest mistakes many businesses (and individuals) make when they succeed in bringing in extra revenue is that they don’t remember to earmark some of it for their marketing budget. I’ve had this experience a few times when working for non-profits: they pull of a big fundraising event, bring in more money than ever before, and then turn around and say “let’s do the same thing next year, only better and with a smaller budget.”
You’re never going to get ahead if you think that way.
Once you raise the price of your online course, you have even more to gain from better marketing. If you put a percentage of your new revenue toward ad spend, design materials, or better email marketing tools, you can enjoy the growth in sales along with better profit margins.