Are you wondering how to price your online course? The right online course pricing strategy might feel like impossible to find. But it’s not. Today, we are sharing the top tips & tricks for profitable online course pricing. We want to help you set the right price for your next online program, and do it with confidence.
As a course creator, you need to know how to pick the right price for your premium content. But, in your gut, are you charging for your courses what you’re worth? We would bet that this is the toughest part, especially if you are about to launch your first online course.
Ask yourself these questions:
- Do you feel you are charging too much?
- Do you feel your price point is too low?
- Are you afraid to ask your audience for what you’re really worth?
- Are you prepared to deliver 5x the value of the price your students are paying?
- Does your price tag attract the sort of students or clients that you want?
In this article, we wish to help you answer these course pricing questions. We also hope to help you hit the “sweet spot” of pricing perfection that will maximize your online course revenue.
Online course pricing – 5 tips to determine the right price
Most edupreneurs and course creators understand that the price point of your offerings is one of the most fundamental factors that determine your sales, revenue and business success.
Pricing has to do with market factors, such as:
- Supply and demand.
- What your competition is doing.
- What is the perceived value of your offering? – and you can directly influence this part.
Typically, the higher you can price the less you will sell. But, there is a point up to which you can increase your online course price without causing a significant drop in sales volume. If you find that “sweet spot”, that is the balance between price and demand, then you will maximize your total revenue.
Keep in mind that branding plays a major role in influencing the perceived value of your online course. You need to create a high perceived value because your client knows they are buying an intangible product, and sometimes, it’s more difficult to grasp the real value of an intangible good. It’s much easier to feel the value you’re getting from a new smart TV set than an online course. That is why branding (and providing quality training inside the program) will determine the perceived value.
It’s important for every online program creator to understand that, since courses are digital products, your marginal cost (the cost of selling one more product unit) is nearly zero. This means that every extra unit you sell – after you have matched your costs – is pure profit.
1. Think expansively
Your intuition might push you in the wrong direction. You might feel controlled by what your competitors do, and choose to price your online course low to “beat the competition”. However, thinking expansively will help you sell more programs and make more money.
What do we mean by expansive thinking in this case? Instead of finding ways to lower your online course price point, you should be thinking “What more can I add to my course bundle to increase the value that the student will get?”
A lot of course sellers think of creative ways to add value. Some examples are bonuses, online consultation, online coaching groups, Facebook groups, implementation support, live webinars and so on.
You are able to set a higher price for your online course when you deliver more value.
2. Valuate your online course “objectively”
Every one of us carries a different level of experience and skills. You need to think your course as a two-sided coin: One side is the value people get from it. The other side is what level of experience and expertise you pack in your training. So, you shouldn’t price your course only in terms of the value you bring but also the resources you have invested in acquiring the knowledge in it.
Never underestimate the time you spent studying, learning from mentors, making mistakes, serving clients, trying to find solutions, optimizing your processes etc. All these situations have a value assigned to them. And they all took time. Time is money. Calculate that money into the price of your online course.
The trick here is not to charge thousands of dollars for one course but instead price the course in a way that if you sell X number of units, you will feel that you are rewarded.
3. Create income goals
As in any business and before anything else, it is advised that you come up with revenue goals for your online course. But why do you need goals anyway? Well, with an income goal you simply know where you’re headed. If you don’t work in the right direction you will lose your way.
Different edupreneurs have different motivations. Is your goal to make enough money to quit your day job? Or perhaps you’ like to make enough to retire early? Or maybe you need more money to pay for your kid’s college?
Whatever you’re hoping to achieve you need to determine the right price to meet your pre-set income goal.
Pricing your online course the correct way is the simplest way to make cash and get your learners better results. By valuing yourself, your online program and the effort you put into creating your content the right way you’ll be able to decide on a fair price that your clients will be willing to pay.
Here’s a simple formula that will help you set an online course income goal:
Revenue goal = (total number of subscribers X conversion rate) X Price for your course
Teachable reports that the standard conversion rate of people who will buy (convert) from each sales email is 0.02.
So, if your list size is 5,000 and you multiply this number by 0.02 then you should expect about 100 people to buy your course. Now you can play with the other factors in the equation. If you set a price for $97 you should expect to earn about $9,700 from course sales. Or, the other way around, if you want to make nearly $10K you’ll need to sell your online program for at least $97 to meet your goal.
4. Offer a free course
Yes, you read right. Not all of your courses need to be paid. Giving away free training can have a lot of benefits.
Need help to optimize your existing funnels? Get free access to our webinar!
Look at free courses as a way to showcase your teaching style and your expertise. They will help create trust and rapport. Only few people will buy an expensive course without having heard of you before. If they are enrolled on a free course that you offer and receive your newsletter, they are more likely to be enticed to pay for a premium course or request coaching or other services.
5. Create a “blue ocean”
Think of it like this. When you create a new market space, i.e. a new course category, you are able to generate demand for something unique. And when you offer something unique, you are then able to price it uniquely, without even looking at the competition – because there is NO competition.
This completely new category of online courses is what we call “blue ocean” in this article.
Put time into finding what is unique about you and what you do and how you can differentiate. How could you repackage, rebrand, reframe, reconfigure or otherwise radically modify your strategy and approach to make competition irrelevant?
If you sell a never-seen-before way to absorb knowledge, then you’ll be able to price your online course with a premium, because no one will think that “online courses on this topic cost anywhere from X to Y”. They will not compare your training with anything else.
Conclusion – Resist the temptation to charge a low price for your online course
When you first start as an online course seller, it can be difficult to resist the temptation to offer your course for a low price. Maybe you think no one will buy because you have a small email list. Or, they won’t buy because they can find the same sort of information on YouTube. What’s more, maybe you don’t have the confidence to set a high price tag. Or, you might feel that you lack content to include in your program. Whatever the case is, all of these thoughts are within reason and we totally get your fears.
Thinking like that, you’re probably wondering why someone would gladly pay a high price for your online course when there are so many other inexpensive resources created by experienced trainers that the prospective students can use instead.
Yes, it’s true there are people out there who are freebie seekers. They don’t mind spending hours to find free information on the internet. But these people are not your target market since they rarely spend money to buy a digital product.
The good news is that there is an enormous group of people who will willingly take their credit card out of their pocket to enroll in your online course.
They need high-quality information, when they want it, that is organized and presented in a format that is suitable for them. These prospective buyers are captivated by having access to an expert and their unique knowledge. They want to invest in that privilege. These people will also be the best students. Not only will they pay the right price for your online course, and complete the lessons, but they will also implement what they learn. Does this group of people sound like your target market?
The online education market is booming. It is projected to witness a compound annual growth rate of 10.26% to reach a total market size of $286.62 billion by 2023, increasing from $159.52 billion in 2017.
Jump on the bandwagon right now with the right content for your online course and a high-conversion sales funnel, all done for you!