Strategies for pricing online courses for maximum profit
You've done the hard work of creating stellar content and crafting a captivating description for your online course, but now it's time for the ultimate moment of truth - deciding on a price tag for your course to seal the deal. As with any other product, pricing can make or break a deal. It's the one thing that can make your audience hit "Buy" or say "Bye" to your course.
There are no set rules for pricing your online course. But by observing certain guidelines, you can keep things in perspective and arrive at a balanced outcome. In the next few sections, we will discuss course pricing in detail — factors to consider, strategies, and steps in pricing your next online course.
What factors should affect your pricing?
The best prices are not given arbitrarily. These are the result of several considerations, such as these:
1. The average price of other courses within the niche
One of the first factors to consider is the current average market pricing. It would be best to take a cue from other course creators within the niche.
This survey should be done according to your estimated market segment. For example, if your course is targeted at the rich, there will be the maximum price your audience can afford.
To figure out your industry averages, identify your competitors at different price points and calculate the mean. This should help you find the perfect price range.
2. Costs incurred in the development
Creating and developing a course from start to finish is an expensive venture. It costs a lot of time, energy, equipment, and money. It would be best to have a figure that absorbs all fixed, variable, and intangible costs so you know how much exactly is needed to break even.
Fixed costs may be staff payments, machine purchases, and software costs. Other intangible costs include time and mental energy spent building the course — recording lessons, creating practice tests, worksheets and presentations, editing videos, etc. The knowledge, experience, and qualifications you share were obtained at a cost. All these must be considered when pricing your course.
3. The nature of your market
You should consider the scope of your target audience and how much they are willing to pay for a course like yours. This should help you decide how much you should charge.
If your desired market is the upper class, and you offer a highly valuable learning experience, you need a higher price point. Setting it lower might make your market lose interest in the course altogether. But the segment is bigger if your audience is youths, most of whom want to learn yoga, music, or some digital skills. However, many of them may be unable or unwilling to pay such a high price. You may have to bring it to a price within reach of your audience.
4. Marketing expenses
The overall price of a course should comfortably cover the marketing expenses. Having your course on hosting platforms, you might need to spend money on ads to break even. It would be best if you estimated the conversion you need.
Even if your content is great, people will not buy it if they do not see it. Getting the sales rate you desire only by organic traffic is difficult. You will have to do some paid advertisements. Typically, your price should be adjusted to absorb all costs incurred in development and marketing.
5. Content type
A course with videos will likely be priced higher than text. Some courses even include workbooks, ebooks, documents, slides, physical products, templates, etc. The purpose is to accommodate students with different learning styles. What if your course features all of the above? It should cost significantly higher than others that do not offer as much.
Apart from content, some courses provide forums for membership and mentorship with leading professionals. Others offer support application of knowledge gained. These extra features should reflect in the price.
7. Learning outcomes
Courses are not made for their own sake — but to impart certain specific knowledge. Your perspective is unique, and your pricing should reflect that. Your students are not only paying for knowledge gained but also saving time by standing on your shoulders and learning from you.
Evaluate the quality of your course and the improved life quality you're offering your students. You should factor in the potential benefits your students will gain from the course — how it helps solve their knowledge problem, absolving them from costly mistakes, false starts, and wasted resources.
How to choose a course pricing strategy
There are strategies for pricing your online course according to the way your course is offered. Let's talk about three of them:
Transactional pricing: Generally, courses are priced according to the transactional strategy. This means that your course is sold in "units." Therefore, the more people sign up, the more money you earn.
This is most commonly used because it is independent of the course creator. Payment gives the student unlimited access to content. It is perfect for defined courses that teach end-to-end knowledge of a new skill.
Subscription pricing: The second pricing strategy is a subscription, which is more stable and long-term. It is like a "relationship" with the client, where the latter pays a subscription fee and gains access to course materials for that period.
The transactional pricing strategy works perfectly for compact, complete courses. But a subscription strategy is preferred when the training is long-term or continuous. Subscriptions can be monthly, quarterly, biannual, or annual.
Tiered pricing: The third pricing method modifies the other two strategies. It is known as multi-tiered pricing, in which customers are grouped according to how much they are willing to pay. In other words, there are different content options for different pricing levels.
Tiered pricing is a great strategy for buyers to cope with a high price. Your basic price may include the course alone, but one can access additional content and resources with each pricing tier.
How to price your online course effectively
Following the tips in the first section, let's discuss potential approaches to pricing online courses.
Conduct market research
You must identify the available and potential market for your course, that is, those needing the information your course provides.
Simply put, we must estimate how many people will likely subscribe to our online course. On average, course conversion rates from organic social media hover around 2%. So, we can calculate 2% of our followers on social media or email lists, whatever the number turns out to be.
If there is no existing audience, market research can be done by asking questions on Reddit or Quora to determine how many people are interested in buying courses within that niche and how much they are generally willing to pay.
Define your revenue goals
You are selling your course because you want to make a profit.
Your expected revenue should comfortably cover your expenses and provide an incentive for more work and a living. To ensure this, your total cost must be calculated against our income to ensure that you are making a profit.
What is the minimum amount the course should yield in a month? Divide the figure by the number of units you expect to convert. Choose a modest number that can be comfortably attained. This helps you set a reasonable price point that does not leave you at a loss.
Analyze your competitors' rates
Market average refers to the mean price of other similar courses, especially those within our chosen market segment. After collating as many figures as possible, calculate the average price of courses similar in topic and value to yours.
Checking out the pricing of similar courses can give you a reference on how to price yours.
This does not peg your price but helps gauge the market because the distinctive factor is your unique value, such as increased productivity at work, improved international relationships, or a whole new skill.
Find out the cost of developing the course
Coming up with the development cost might be hard because it is not limited to monetary expenses. However, a good business person can make informed estimates of other nonfinancial costs incurred in developing a product for sale. These expenses are factored into the cost of that product.
Your price should be the monetary equivalent of all investments made in creating the course, considering your minimum revenue goal already set. These steps should simplify attaching a price tag to your course.
Sell your online courses on Workee
Many creators are concerned about where and how to sell their online courses. While many hosting platforms are expensive and overcrowded, Workee offers a free platform for advertising and selling your services.
Workee is a digital workspace with all the features that make freelancing less tedious and more enjoyable. Workee offers the following services:
1. You can create a professional website that fits your preferences and can be done quickly. This website will help potential clients interact with you and check out information related to your services.
2. Workee offers smart booking and scheduling features to simplify managing multiple appointments with students across different time zones. The platform sends reminders and ensures that no meetings are missed.
3. With Workee, you can take advantage of payment and automated invoicing features and keep track of payments received and taxes managed without any commission fees. The platform supports multi-currency transactions.
4. Workee provides an all-in-one integrated workspace that lets you conveniently manage meetings, contacts, and payments in one place.
5. Hold video calls with your students on any device and take notes during these sessions effortlessly.
6. The clients' management tool within Workee allows you to easily organize your interactions with clients, including keeping all client information in one place, managing sessions, taking notes, and receiving payments.
Pricing courses is a delicate science. Contrary to popular belief, setting ridiculously low prices does not always result in a flood of customers. People may instead dismiss the course as being of little value. On the other hand, an impractically high price point may deter customers. Remember that while pricing is potential customers' ultimate magnet or repellent, it is not a competition. You will always find prices that are higher or lower than yours. What is important is the worth of your product. Workee allows you to connect with your students in ways that go beyond simply selling courses. Please feel free to return to this article as often as necessary.
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