Pricing your course is a crucial decision. Take it too high, courses may not sell. Mark it too low, you won’t make enough money, neither would you have enough to run the business or spend on other crucial stuff such as ad spends! So then, should the price always be low and how low is too low? What can you do to make consumers pay more that really makes the effort worth it? If you’re thinking about these things, you’re at the right place! One of the most crucial things to be kept in mind for course pricing is the fact that you cannot ‘price’ based on your instincts. This is not a decision that you can make lightly.
A proper pricing strategy, decision making, discounting model has to be created while thinking about course pricing. There has to be significant research in place to build a roadmap. You must think of which strategies are to be implemented at what time that drive sales and push costs of customer acquisition the lowest. You can't get up on one day and decide that today it will be a 50% off discount day. You also need to keep past customers and future customers happy within the price range you offer your courses in.
Before talking about the pricing first, you need to finalize who is your target audience who will buy the courses from you. These are the people you would focus your marketing efforts on. And it is their buying capacity that will direct your pricing strategy
But first: what is your buyer persona?
A deep understanding of your buyers will support you in multiple aspects. You will be able to build a better course, your marketing efforts will be in the right channels, sales numbers will be better as a result and your business will thrive. Everything that you do in your business boils down to one key thing: Who is your target audience?
And to help with that, here's a deeper look at some of the main buyer personas. While this is indicative, this gives a brief outline of which one to focus on to achieve your goals.
The no buying type
This one is a no brainer. It's the typical window shopper type. One that does complete research about the topic one is interested in, will go through every free trial for a course, reach out to the creator, put in a whole lot of questions and when the time comes to click the “buy now” button, poof! He's gone! No purchase, no contact, nothing...
The buying decision has ended for this profile. He now will resort to the generic online information to get his curiosity satisfied. Such a person may come close in making the buying decision, but at the last minute, he will back out.
It's evident this is not the person who you will direct your marketing efforts at. If you are thinking of working with this kind of a buyer, it will be a long time before you could get a sales from this persona.
A buyer without strings
This is the type of customer who will complete their buying process, pay for the course and disappear. Nothing more. This persona won’t engage in the community, nor the lessons. At most, such a person won’t even complete an entire section let alone the course. These are the typical hoarders. Someone who buys the book and lets it get drenched in the dust. For the digital world, the course keeps on gathering the ‘digital dust’ and remains in their library forever. They do refer to it at times when they recall, for paying the money for the course and try completing or even beginning. But that just doesn’t happen.
With this kind of a persona, while the initial sale may come in, this person usually is not interested in learning. Whereas you are building a community of engaged learners who make a drastic improvement in their lives via learning from your courses. So while they are great of adding revenue to the business, ultimately you want long term loyal customers who love to learn from you.
Premium price takers
You get it this is the type we have been looking for. The enthusiastic ones, the learners who will take an interest in the entire buying decision making process. A learner from this category, will not only complete the course but will most likely be converted into a regular customer. This one will continue to support your endeavors if they find benefit from your offering. They will interact with you, join the community, share opinions, interact, engage and share information that will help you with the topic being discussed and most importantly, when you launch your next course, they will definitely consider a purchase.
You may face criticism through them but that will be constructive. Not only will they tell you what can be improved, but they will also take the pain in talking about the steps you can take to help you reach your goal of a successful course.
Ideally, you would want to focus your marketing, promotions and advertising efforts on the last two and more so on the last persona.
So now that you know the buyer personas out there, here's how you can strategize the course price.
When to price it low?
Lesser efforts input
Is your learner getting enough value out of the course? Are you required to support them with feedback, manual learning interventions etc. Depending on the amount of effort required from YOU beyond launching the online course, you need to price it accordingly. If it's a purely pre-recorded and completely automated online course where zero intervention is needed, these courses need the least amount of your time. Hence price them the lowest. As the amount of efforts, time and your involvement increase, so should your pricing. After all, each day has only 24 hours and you can only do so much.
Cost of acquisition of customers is low
Pricing your course low will definitely help in generating sales. You can sell a lot if you price a lot less. But you must proceed with caution. Leads have to be generated, promotional activities have to be completed, targeting has to be optimized, and there's so much more to it. While a platform like Knorish may help in automating a lot of things, sales and marketing and the related costs need to be monitored closely. Since profits may be less, you will be regularly in a situation where ploughing back the profits in the business will be difficult. And without the money to promote and save the falling ROI, you will end up losing money rather than gaining. This will create a cycle and will haunt the survivability for the business. Since the wiggle room is less due to a lower course price. Therefore it will be sensible to price the product appropriately where break-even is not the goal, profitability is the thing to target for.
When the competition research says so
This is one of the most regarded strategies when pricing decisions have to be taken. You already are aware of the competition for your online course. if you don't already, check course marketplaces, and other online businesses. How are they pricing the course? Sign up for a few and check the content quality. With a deeper knowledge of the actual course content comparison, you will get a better understanding of the price range where your course can fit right in. Not only will this give you a fair idea on how to price, but this will also enable you to understand the market where you are stepping in, in a better way.
Pro Tip: When launching your first course, price your course lower than the market leader of the segment. Learn from your students what additions they want in the course, keep improving your content and when you feel your course content is as good as any, mark it up to the price of your choice!
In case you have a strong following and you are a renowned expert in the niche, it is a must that you charge higher than the market to maintain that exclusivity and the brand value!
Hit and trial
Still figuring out the nuts and bolts of an online course business? Haven't figured out the right course price yet? Price it high, give discounts! Start low. Keep trying Hit and trial should be your go to Mantra! Then check how consumers respond and what are the differences in the number of courses sold with a particular price. This is a great starting point. This might not be the fastest method but can come out to be quite fruitful if the you hit the bulls eye with to changes here and there.
Consider your goals
Another reason why a course can be priced low is based on the your own goals. by talking stock of your goals, long term and short term, you will have a fair idea where you want your online academy to reach in the foreseeable period. With that in place, you can afford to price your course low, if your goals permit that is.
BONUS: NEVER price THE COURSE based on it length
In the list of the strategies, you can undertake this is the one which you should refrain from. Pricing according to the length of the course is not advisable. It's the end value a user gets from it that defines the price of a course!
When to price the course high?
Additional Resources on Offer
Are you bundling a few courses or content? Are there high value content pieces being given with your courses? By adding such value and learning adds, not only the learner will see the value, but they will also really get a lot of learning beyond the online academy.
Personal Time Investment
Having a personal connection with the learners is extremely important if you wish to precise your course well. If your courses include regular personal interventions, interaction on social media handles, one to one interaction, webinars, etc. you must definitely price your courses higher compared to other courses that do not offer this. You have to assign a greater value to your personal time being consumed. And learners will appreciate that.
The classic discount based pricing model. Price the course at 5X, sell it for 3X now and then X during special events. Almost all course creators use this technique and so should you. By pricing the course higher, you create enough wiggle room for your business. Allowing you to modify pricing and offer discounts based on the seasonality and demands from the customers. This also allows you to revenue share with affiliates,
The creator can provide upselling discounts to the learners who have completed the course and can benefit from a relatable course. By this, they can be retained therefore the cost of acquiring will come down, therefore saving money.
Pricing your course right is not a simple task. You must consider the various factors involved and then consider. With all of these strategies explained, find the right price which provides the best fit for your online courses and the business. Make it a regular activity to gather feedback from students, improve the course and then really there's no holding back.