How To Create An Online Course: The Ultimate Guide

Pricing Your Online Course


CONTENTS


Pricing is an area that many new course creators find themselves agonising over.
Price your course too low and you may not make much money. And you risk attracting the wrong sort of customers and positioning your course as low value.
Price your course too high and you might price buyers out of the market and end up with very few sales. 
The good news is that the price of your course isn't set in stone. In particular, it's very common to price your course quite low for your initial pilot, raise it for your launch, and then keep raising it over time.
Partially, the price rises reflect the additional value you'll add to the course over time. Partially, they reflect the increased confidence buyers will have as you add more and more testimonials and reviews from happy customers. And often, it's simply a reflection of the increased confidence you have and your comfort level at charging a higher price.

Set a Tentative Price for Your Course Before Working on Your Pilot

It's important to look at how you're going to price your course before you start work on creating  and promoting your pilot.
Your pilot price will typically be a generous discount on the full price of your course. So naturally you need to have an idea of what that full price is going to be so you can talk about how big a discount it is.
That doesn't commit you to hitting that exact price when you launch. It may be the takeup of the pilot and feedback tells you the price could be much higher. Or it may tell you it needs to start a bit lower and work its way up. But either way, you need to have a ballpark figure for your full price before deciding on your pilot price.

Pricing is Both a Rational and Emotional Decision

There are many factors which influence the range of prices you can charge for a course. And there are also strategic factors which might make you want to price a certain way. We'll discuss all of these below.
But it's worth stating up front that pricing isn't purely a rational exercise designed to maximise your profitability.
The price you set for a course will also reflect how you feel about the course and about how you want the course (and you) to be perceived by your audience.
Do you want to be seen as a premium provider? Or do you want your courses to be seen as great value and affordable by a wider audience? 
There's no right or wrong answer to these questions and it's worth bearing in mind this emotional influence on your decision making. It's also worth noting that your feelings about pricing have no doubt been influenced by your own experiences as a buyer and by what you're been told about pricing before.
As long as you choose a sensible price for your course it's absolutely fine if your decision is influenced by what price level you feel good about. In fact if you don’t feel good about the price you've chosen it will be difficult for you to commit to fully marketing and promoting your course.

Key Factors that Influence the Price of Your Online Course

Start With Economics

Basic economics dictates that there are two potential ceilings on the price you can charge for a course:
  • The value of the course to the buyer. The more value the buyer gets and the clearer that value is to them, the more they'll be willing to pay. This is why I recommend focusing on outcome based courses that deliver a specific, tangible result in an important or urgent area for buyers. t simply makes it easier for them to see the value they'll be getting.
  • The ease with which they can get the equivalent value elsewhere. If there are plenty of comparable courses on the market (or other ways of getting the same result) then it'll be difficult for you to charge a premium price for your course. This is why it's so important to create a course that stands out and is substantively different to others.
As we'll discuss below, there are many additional factors which will impact the price you can or decide to charge. However these two big economic factors influence everything. 
If you want to increase the potential price you can charge, the first thing you should do is look at how to increase the value delivered by your course and how to make it stand out and be different to others on the market.

Psychological Influences on Price

The price you can charge for a course can move up or down depending on a number of psychological influences:
  • Perceived Scarcity. If there are only a few copies of something available, you can obviously charge more for it. In theory, there should be an infinite supply of places on an online course,. But in practice if your course has elements like live group calls, 1-1 calls or personal feedback and support then you can only provide that to a limited number of people at once - thus giving you natural scarcity. Similarly, if the course is only open for enrolment at limited times during the year that can create scarcity too.
  • Perceived authority and expertise. If you (or a course tutor if it's not you) are well known in your field or have  nurtured a relationship and built credibility directly with your potential buyers then they'll be prepared to pay more for a course from you. For professional development courses, the prestige of the organisation running the course or awarding a qualification makes it more attractive, as does the celebrity of a tutor on an entertainment based course.
  • Social Proof and Perceived Popularity. We're all more likely to want something and be willing to pay more for it if we think others want it too. Testimonials, revews, endorsements and other indicators of a course's popularity can all increase the price you can charge.
  • The Size of the Course. In theory, the size of the course shouldn't affect our perception of how much it's worth as long as it delivers the outcome it promises. in fact in many ways, the shorter the course the better as we get to our desired result faster. But the reality is that it's hard to charge a fortune for a very small course. Most people just tend to feel they haven't got value for money if there's very little to a course.
  • The Production Values of the Course. Similar to the size of the course, the format and production values shouldn't impact our perception of value as long as it delivers the result we're looking for. But it does. We expect that an expensive course will be video based and that the website and course materials will "feel the part".
  • The Amount of Personal Support. For a high priced course most people will expect some level of personal support to help them get through the course and get the results they're looking for. That sense of having a human being on hand when they need one increases their perception of value even if they could get the same results from a "do it yourself" type course.

Strategic Influences on Price

In addition to the optimum price you could charge based on economic and psychological factors, you may choose a different price due to strategic factors.
  • Pricing Low to Build a List of Buyers. A low priced course can be a good way of building up a list of buyers who you can then promote higher priced products and services to. If your main products are consulting or coaching rather than training courses themselves then it may be better for you to get as many buyers as possible who then experience the quality of your course and build a relationship with you - making them much more likely to buy your higher priced service.
  • Pricing Low to Impact More People. If one of your goals is to help as many people as possible through your courses then pricing low is one way to achieve that.
  • Pricing Low to Make Your Marketing Easier. A low price means it's less of a big decision for buyers to commit to, so less persuasion needed to bring them on board.  There are some caveats to this - low prices make it more difficult to afford advertising for example. But using a "no brainer" price to pilot a new course to an existing contact base can allow you to spend less time on marketing and more time setting up and running the pilot.
  • Pricing High to Create the Perception of Quality and Exclusivity. In the absence of other signals, price is often taken as a guide to quality. Conversely, if your course is priced very low it may give the impression that it's not such a great product. In practice, other factors such as testimonials, your reputation, the look and feel of your course and the marketing you do can take the emphasis off price. But ultimately, price does have an impact on perception.
  • Pricing High to Make Advertising and Partners/Affiliates Viable. If you're using paid advertising to promote your course then typically you'll be paying "per click". So if, for example, you're paying $1 for every click from an advertising network and you convert 1% of all visitors into buyers then it's effectively costing you $100 per customer in advertising. If you're selling a low priced course you simply can't afford that level of spend. Similarly, affiliate partners will be difficult to sign up if they only make a small amount for every lead they send you because of the low price of your course. A premium price makes advertising and affiliate models viable.
  • Pricing High to Attract Better Customers. A number of online course trainers claim that customers willing to pay higher prices are easier to deal with and because they've paid a lot of money, they're more committed to completing the course and getting results. The evidence for this is anecdotal rather than scientific, but there is some logic to it. If you've paid a lot of money to buy a course you may well be more determined to get your money's worth by fully utilising it. Conversely, if you didn't pay much then it's easier to write off that cost if you hit challenges when taking the course.
Once you've looked at all these factors, make an initial assessment of what you think a fair price for your course would be. One that's a great price to buyers because of the value they get from it, but also one that offers you a good profit and meets your strategic objectives.

Benchmarking Alternative Courses

You shouldn't let the price of your course be dictated by what others are charging for similar courses - that's why we started off looking at what you believe is a good price for your course.
Nonetheless, the reality is that your customers will be looking at alternatives and they'll know what the prices of those courses are. If your price is significantly out of line you'll need to be confident that it's justified - and more importantly, that your customers will feel it's justified.
To do that, you need to know what the price of alternative courses is.
You probably already know some of the major competitive courses from your research so far. But make sure you do a search on the web so you haven't missed any.
Then make a table of the results showing the main outcome of the course and topics covered, anything you can on the size and format of the course and obviously the price.
This will give you a good idea of whether your initial idea of pricing is roughly in line with what others are charging.
If it's significantly less you may want to consider raising the price.
If it's significantly more, make sure you're confident that your course is adding more value and has more of the psychological factors that enable you to charge a higher price. But don't feel constrained by what others are charging if you feel the value of your course justifies a higher price.

Typical Prices for Different Types of Courses

In the absence of direct benchmarking information you can also look at the typical price of courses of a similar type to yours.
It’s perfectly possible to charge thousands of dollars/pounds for a big professional development course or an outcome based course that delivers significant ROI..
Usually though, if your buyers are small business owners then the price will often be in the range of $100/£100 to $500/£500 range for a pure online course or $500/£500-$3,000/£3,000 if there's a significant coaching element with direct support from you.
For entertainment based courses the pricing is more likely to be sub $100/£100. You're essentially competing with movies, TV shows or a night out at the theatre.
For professional development courses the price is typically thousands - but these courses are very big and not usually suitable for your first course.

Pricing Your Pilot

Based on your assessment of the full price you'd like to charge for your course you  can set a price for your pilot.
Typically your pilot will be priced at a generous discount on the full price:
  • Partially, this is because your course is as yet an unknown quantity. Without testimonials and review for the course your plot members are taking more of a risk that it won't give them what they're looking for and that's reflected in the price.
  • Partially it's a "quid pro quo" for pilot members in return for committing to giving you feedback to improve the course and if they find it valuable, to giving you a testimonial for when you launch,
  • And partially it's to make marketing the course easier. You'll have enough going on actually creating the course without needing to invest a lot of time into a persuasive sales page, multiple emails and a webinar to promote the course. A big discount on the pilot can bring the price to the level where it's an easy decision for buyers to make to sign up.
A typical pilot discount is to price the pilot at 50% of your final target price.
This is big enough to make it highly attractive to interested buyers, especially since this discount will be a "once in a lifetime" offer. But the price should still be high enough that sales give you a good indication whether there is real demand for the course.
And obviously you'll want to make at least a little profit on the pilot to make it worthwhile even if your main financial prize is likely to come from the full launch and additional products.

Adjusting Your Course Price After Your Pilot

In theory, when your pilot is complete and you launch the course fully, you'll switch to your original target price.
But in practice you should use your experience on the pilot to reassess what price to use when you launch.
If the pilot sells out really quickly, it’s an indication that you could adjust your full price upwards to take into account unexpectedly high demand.
On the other hand, if the pilot sells slowly it can be an indication that you may have started your pricing too high and it may be worth launching at a lower price than originally planned. Or even to do a second pilot with updated content at a mid-point price.
You may also get feedback from the pilot that causes you to add additional content or refocus the course to add more value. You may also get such great testimonials from the pilot that a more significant price increase feels justified.
Most of the time, you'll be proceeding according to your original plan. But you should still review your pricing in the light of your pilot experience to make sure you're not missing an opportunity to price better.

Piloting Your Online Course

Piloting Your Online Course

Learn how to run a pre-sold paid pilot for your online course to ensure its success:

  • Naming your Course
  • Pre-selling your Pilot
  • Your Pilot Timeline
  • Running Your Pilot
Tweet
Share
Share