Launching a course is exciting but trying to choose a price for your course may have you feeling hesitant and uncertain. There are, however, research and strategies you can use to help you decide on how to price your course. Let’s first assume that your end goal is to find a price that maximizes your earning potential while still being competitive enough to attract lots of customers. The following steps are meant to help you zero in on a price you will feel comfortable selling your course at.
Gather Course Pricing Data
In this step, you take the median price of online courses which gives you an average price range to work with. The more data you gather, the more accurate the range will be. There are a few ways you can do this.
- First, you can go to websites where online courses are sold and send them a message asking for their course sales data. Most platforms maintain this data for their purposes and they will most likely agree to share this information with you.
- Second, you can browse an online course builder platform or online course marketplace and collect data on your own. You can repeat this process with multiple online course builder platforms and marketplaces to be able to get a somewhat accurate reading.
Most of these sites have the option to filter and arrange information which means that you can collect a wide variety of data.
Research courses in your industry
This step is similar to the previous one but you are trying to narrow down the field to courses that are most similar to your own. You can consider factors like the specific industry, your topic, the number of lessons, whether it’s for beginners or advanced students, and so on. You don’t want to narrow the field too much but you should narrow it enough that you can get a good sampling of data. Now, like in step 1, you want to find the average price range at which courses are selling. Once you have this, you can take the average of the course pricing data and the pricing data of the courses in your industry to find the baseline for course pricing.
Determine your costs and net profit
If you want to create online courses and make a reasonable amount of profit selling them, it is vital that you first determine the costs to create online courses and keep up their maintenance. By calculating your total costs, you can figure out the least amount you should charge your clients to make a profit. To create online courses, you require equipment, software, and sometimes a freelancer or a company to help you set up your course. There are also additional costs for course hosting on one or multiple courses hosting platforms. You also have to factor in the time it takes you to develop an idea and create online courses. It’s really important to factor in time costs because most people fail to see their time as money. After you create online courses and pay for a platform to host your course, you also have to spend time and money marketing your course on various platforms and marketplaces. Research shows that course creators have to spend about 18.5% of their total revenue on marketing to keep course sales coming in. Now that you know your total costs, you can divide that number by various price points to find the number of clients you would have to sell to break even.
Use price rankings and tiers
If you offer your normal course at a regular price and also offer enhanced versions of your courses with added value at higher prices, the normal course will be perceived as a better deal. The most popular version of this is the three-tier approach going from least expensive to most expensive versions of a course. The reason this approach works is that it uses price anchoring to change the perception of the price based on the other available tiers. If the first tier might have initially seemed expensive to the customer, it will feel like an acceptable and fair price with the addition of the other two tiers. Another reason this works is that people like having options but not too many options.
While it’s not necessary to use each of these steps, the more you let them build on one another, the more confident you’ll feel when choosing a price for your online course.