Pricing your online course is one of the most intimidating parts of the course creation process. You’ll see courses available online for free and also courses that cost thousands of pounds. So, where do you fit?
The key is finding a balance between being affordable enough to attract customers while also maximising your earning potential. You don’t want to undervalue yourself, but uncertainty can hold you back from putting a higher price tag on your course.
There are many factors to consider when pricing your online course, and by combining these elements, you can determine a price that will be the most profitable.
1. Do your research
The first step in determining how to price your online course is doing some product research. Find out how much similar online courses cost and see if you can find any patterns in the pricing structure.
Your course topic should have a unique spin on it to make it more attractive, but you should still be able to find some courses that are in the same category or niche as yours. An important thing to note is the difference between self-hosted courses and those on online course hosting marketplaces. Self-hosted courses are often priced higher since they are much more labour intensive to create and market, and the price reflects that. So, make sure you’re researching courses that follow the same hosting model as yours.
Course marketplaces like Udemy are a great place to start as you can filter the courses by topic or category. Make sure that you are also looking at courses that are logistically similar to yours. This could include how many lessons/modules, beginner or advanced level, and if they include video lessons or just presentation slides?
2. Work out your costs and profits
To make a profit with your online course, you need to work out how much it will cost to create and maintain. You can use this information to help you correctly price your course to ensure that it will be profitable for you.
Some costs to consider include:
- Equipment (computer, microphone, camera, etc.)
- Software (graphics/presentation creator, video editor)
- Outsourced work
- Cost of hosting (how much of your profits go to your hosting platform?)
- Time cost (How much time did it take you to make? How much time will it take you to manage the course? This could include time spent on marketing, customer service, following up emails, etc.)
- Marketing cost
Most of these costs will be black and white, but your marketing cost is up to you. The U.S. Small Business Administrations suggests you allocate 7-8% of your gross revenue to your marketing budget. So, that means that all the costs we mentioned above should combine to be about 92% of the amount you’ll need to break even.
For example, if your costs total £2500, you divide that number by 0.92 (based on 92%) and you’ll get £2717. This is the total cost you can expect for all your expenses plus your marketing.
Once you know how much it’s going to cost to get your course up and running, you can determine how many sales you’ll need to break even based on varying price points. If your total cost is £2717, then you’d need to sell about 27 courses at £100 to break even or 270 courses at £10. Now, compare that to the average selling price of other courses in your niche to see where the sweet spot would be.
3. Product vs demand
There are four different places that your online course can rank on the product demand matrix. Determining where you fit will help you price your course effectively. Does your course topic appeal to a broad audience, or is it very niche? Your online course can be successful regardless of where you fall on the matrix, if you price accordingly.
The four areas on the matrix are:
- Labour of love – low price, low demand
- Mass market – low price, high demand
- High end – high price, low demand
- Golden goose – high price, high demand
You don’t need to have a university degree to create and sell an online course. But the more experience you have on your chosen topic, the more people will be willing to invest in your eLearning. If you’ve been teaching yoga for 15 years, your audience will be more likely to trust your expertise than someone who has only been in the industry for six months.
The more expertise, experience and social proof you have on your topic, the more you can typically charge.
5. Student ROI
The next factor to consider when pricing your course is what your students can expect to gain as a result. People are more willing to invest money into eLearning classes that will benefit them in the long run. A new skill becomes an asset they can use to better their lives. The more valuable that skill is, the more you can charge for your course. These skills could help them in their business, save time or live a healthier and happier lifestyle.
For example, you might build an eLearning class on vegan nutrition. If a general nutritionist takes your vegan nutrition course they can then add a specialised service, vegan nutrition coaching, as part of their business offering. This will allow them to expand their target audience and make more money as a result.
The more dramatic the ROI your student will have as a result of taking your course, the more you can charge.
Pricing your online course effectively
By considering all of these factors, you can determine the most effective and profitable way to price your online course. Regardless of your course topic, there is an audience out there ready to invest in the valuable information you have to offer. By pricing your course effectively, you’ll not only make it accessible to those who want to take it but profitable for yourself as well.