You may not realize it, but pricing your online course is one of the most important tasks that needs to be completed once you start teaching online. However, pricing your course can be very tricky: if you price it too low you may undervalue your work, while if you price it too high you may lose a target audience that cannot afford to purchase the course.
In order to avoid making mistakes while figuring out the price for your course, we suggest that you follow these strategic steps:
I. Estimate the real value that your course delivers
Think about how your course will change your students’ lives after completion. Will they be able to get a better job or start their own careers? Answering these questions will allow you to estimate the real value of your course. The value is also dependent on the content that you provide in the course. If your course is interactive, and has many multimedia elements, visuals, additional materials, and written content, then for sure it is worth more than just a text-based course.
II. Calculate your upfront costs
Sum up the total cost of creating and preparing your course. Estimate your time for creating the materials, your investment in the software, your advertising budget, blog domain, hosting, etc.
III. Take a look at your competition
We do not advise you to take a look at the competition and price your course somewhere in the middle. This is a bad strategy since, again, you do not know the real value of their courses or what expenses they incurred while creating them. You may want to research the competition in order to check the demand for courses in your field, but do not use it as a benchmark.
It is a good strategy to purchase a competitor’s course in order to check out what people are paying for and what they are getting in return. And remember, do not be scared to set the highest price in your industry for your course, because, as we said before, quality is what matters.
IV. Test different prices and promo codes
It is always a good idea to test the market and see how it reacts to price variations. You may start with a lower price (be careful not to start too low) and gradually increase it. Once you see that your sales start to fall, you will know that this is the optimum price that you can charge for your course. You can do the same with promo codes. You can start offering promo codes at a higher value and then decrease it while monitoring your sales. For example, if offering a 25% discount netted you the most sales for your $100 course, you may want to offer your e-learning course at $75. Alternatively, you can just keep offering the promo code so that people feel like they are getting a great deal!
V. Define your course objectives
It is also very important to clarify the goal of your course before you set its price. You have to know what you want to achieve with the course, why you are creating it, and the amount of revenue you want it to generate. Once you answer these questions, it will be easier for you to calculate the price. Let’s take a quick look at an example.
If you are setting the price for your first online course, you will want it to generate revenue for you so that you can invest the profit back into the business. If you want to reach $2,000 in revenue per month and your course is priced at $100, then you will need to have 20 students. If you would only like to have 10 students instead of 20, your price needs to go up to $200 so that you can still hit the same revenue. Of course, this will not be your only price measurement; you should always take into consideration other factors as well.
The Don’ts in Your Pricing Strategy
There are two things we advise you not to do when choosing a price:
1. Do not start with a low price
Yes, you are just starting and this may be your first course, but this does not mean that it is not good enough to cost $100. You may also think that there are tons of free resources and information out there and that people will not be willing to pay a high price for your course, but many people also value their time and this is something that your course will save them. It is also true that people who are looking for high quality courses may also think that a low-priced course is not good enough for them. Do you want to lose this target audience? If you charge a low price, you will also not have enough money to advertise and develop your teaching business. And last but not least, it takes just as much effort to sell a low-priced course is as it does to sell an expensive one.
There are some exceptions to this rule: if you want to do a prelaunch promotion, for example, or you have a deadline for a promotion.
2. Do not base your price on course length
You may initially take this approach when trying to price your course: if I spend 2 hours teaching, I should charge a higher price than if I am teaching for just 1 hour. Length is not the most important factor on which you should base your price. Let’s take a look at a simple movie example. When you go to the movies, are you willing to pay a higher price for a ticket just because the movie will be 3 hours long? No, you probably want to know how good the movie is, who the actors are, etc. The same rule applies to online teaching. People will not look at the length of your course when they are making a decision about whether or not to buy it. Rather, they will consider the value that it will bring to them, and your authority as a teacher.
How to Justify the Higher Price of Your Course?
As we mentioned several times, you should try to charge a higher price for your course, but you also need to justify it. Here are some basic tips on how to do that:
- Look for a niche topic – create a course on something very specific. There are tons of courses on programming basics for example, but why not create a course for programming software needed in medicine.
- Give something extra to your students – add something to your course value. You can offer 1-to-1 tutoring once a month, for example, so that each of your students feels special.
- Include additional resources – people just love to receive something extra, especially when they think that it is for free. Create downloadable resources for your students and present them as FREE exclusive materials that are just for them and that are not available anywhere else online.
- Offer a payment plan – you should allow your students to pay in separate installments.
- Form partnerships with other teachers – if you have the chance, you can form a partnership with other teachers and offer some of their materials as a bonus to your course for FREE, and the other teacher can do the same. This serves to add extra value to your course.
- Give a completion certificate – this one is obligatory. People like to have proof that they have achieved something.
Remember, your pricing strategy does not depend on the length of your course or on the competition’s prices. Pricing is mostly connected to the value that you give your students and the way that your course impacts their lives. Of course, you should not ignore other factors such as incurred costs, revenue targets, and the time you spend developing and teaching the course.