The price of your online course can set the tone for everything that comes next.
Your target audience is going to have expectations about the level of skills they’ll be learning, your expertise, and the value they’re going to get out of it.
How much you ask people to pay will depend on what you can offer and how much it’s worth to someone.
Somehow sounds both super simple and pretty complicated at the same time, right?
Every online course is different, but how you reach your price point should follow the same path.
We’re going to take you down that path and get into:
- The pricing models you can use for your online course.
- Which elements should affect how you price your course.
- A step-by-step guide to find the right price for your course.
- And a calculator to help you price your course.
Then, we’ll introduce you to a really helpful calculator that will help you find the perfect number.
Let’s get started.
The Different Pricing Models for Your Course Business
The question is as old as Uscreen itself; “How do I choose the pricing model for my online course?!”
Before you can even think about how much to charge, you need to decide which pricing model you’re going to follow.
In the world of video-on-demand (VOD), there are 3 common ways to charge for your content; each being better suited to different use cases.
Here’s our breakdown of the 3 ways that you can charge for online training, coaching, and teaching.
Model #1: SVOD
SVOD, or subscription video-on-demand, is a pricing model where you charge a regular subscription for people to access your course content.
You can choose how often your learners pay, such as:
Businesses making money through subscriptions have boomed in the last decade.
It’s an appealing option because you build a relationship and create a “forever transaction” which can give you a high average customer lifetime value (CLV) for each student.
Subscriptions work well when your offering has uncapped value.
This basically means that your students can get value week after week – each time you upload new content, you add more value for them.
Here’s an example of how it can work for your course content.
Example: Art for Kids Hub
Art for Kids Hub teaches kids how to draw, paint, cut, and make origami – all with their library of online videos.
Image Source: Art for Kids Hub
There are hours and hours of content to keep children engaged and learning through creative processes – from preschool-level to more advanced classes.
Image Source: Art for Kids Hub
As you can see, they’ve chosen to offer both monthly or yearly pricing options.
Kids have a strong drive to make, do, and create that parents are keen to nurture, so it makes sense that they’ll pay a monthly fee to give their little ones near-endless activities that will help develop their artistic side.
Upselling your new students to a yearly membership has been one of the most powerful tools in helping our customers reach a combined annual turnover of $100 million
Nick Savrov, CTO @ Uscreen
Here’s another model for you to consider.
Model #2: Multi-tiered subscription
Now let’s discuss a more advanced form of SVOD, multi-tiered subscriptions.
This pricing model works well with something extra to offer.
By this we mean, you need to have a variety of content options or different levels of value to offer so that you can make a distinction between your pricing plans.
Some of the factors you can use to differentiate your prices include:
- Which classes or categories can be accessed.
- How many hours of classes can be watched.
- How many videos they can download each month.
- Whether the learner can access your live stream content.
Offering a lower price for less access can be a great way to make your learning material accessible to different people, but works best for businesses that have already established their value to users.
Here’s one way that you can break up your learning material into tiered pricing.
Example: Signature TV
Signature TV offer makeup tutorials from a range of international celebrity makeup artists.
Image Source: Signature TV
They offer 2 tiers on their monthly plans:
- Gold – gives access to the 4 most recent tutorials plus 2 new tutorials added each month.
- Platinum – gives a free trial, followed by unlimited access to all the videos.
While the annual plan gives complete access to all content for a full year.
Image Source: Signature TV
By offering different prices for different access levels, you can target your loyal students and community members by making them feel more valued with higher levels of access.
The third pricing option course creators can consider is…
Model #3: TVOD
Here at Uscreen, and other places where you can host your course, we call it transactional video-on-demand, or TVOD, but you’ll know it better as selling a complete course.
With this model, you can sell a limited amount of content – one or multiple videos that make up a full course – with time-restricted or unlimited access.
Using this pricing model is really common when creating and selling your online courses – it’s likely what a lot of other people in your industry are already doing.
This pricing model is perfect when you’re creating an end-to-end course where your learners walk away with a complete set of knowledge or a new skill.
When you started your market research, you’ll have seen that selling a package of videos and other materials for a one-off fee is how many online educators price their course.
You get the payment for your work upfront and can move on to your next project, whether that’s creating your next course or developing other areas of your business.
Here’s an example of a business selling a training package on a pay-per-view basis.
Example: Lisset Perrier Education
Lisset Perrier is an award-winning portrait photographer who’s created online courses to share her knowledge.
Image Source: Lisset Perrier Education
Lisset uses a hybrid pricing model that includes an option to buy a bundle.
Image Source: Lisset Perrier Education
As well as offering quarterly, semi-annual, or annual access to all of her classes, she also has a single course for students to learn “The Art of Photoshop” through a workshop.
Being able to use Photoshop is a high-value skill that’s in demand – so selling it as a single package of lessons can attract learners who are specifically interested in it.
By having the monthly membership option as well, she can later upsell to anyone who does buy the course as they will trust her expertise and the value of her teaching.
Now that we’ve looked at your pricing options, let’s see what else you need to consider when pricing your course.
6 Factors That Affect the Price of Your Online Course
There are lots of considerations when you start to look at pricing the online course you’re creating for the first time.
For some factors that we’re sharing with you, you’ll need to make calculations based on information about your business or industry.
Other factors are going to need an educated guess.
It’ll be better than a wild stab in the dark – you already know your niche and your potential students as you’re building a course for them!
Still, you’re going to have to make estimates based on industry and competition averages, which we’ll do our best to share based on what we know about our successful customers.
We’re going to delve into each of the factors in detail for you.
Factor #1: Niche industry averages
Whether you intend to charge a higher price than your competitors or plan on offering a course below the market rate, you still need to know your averages.
Before you started creating your course, you’ll already have identified your niche and even checked out who else was doing something similar.
Now is a good time to go back to your competition and check out their online course pricing.
More than that, you should try to determine who is targeting the customers with a lot of money to invest in training and can pay a premium price, and who is going for a wider or broader market segment.
Even when your course is going to be the ultimate expert advice on your course topic, there’s going to be a maximum price that your audience can afford.
To figure out your industry averages:
- Identify your competitors, i.e. people selling online courses in the same field, no matter the price tag.
- Note the prices the courses are sold at, as well as the range of pricing.
- Calculate the mean average of the prices.
Say you find 5 courses offering a similar course to yours with the following prices:
This means that the average price across the market is $76 and the range of prices runs from $50 up to $120.
These steps should help you understand what your audience is prepared to pay for a course like yours, and where the absolute limit of your pricing might be.
The next factor to look at is coming right up.
Factor #2: Your monetization strategy
How you plan to offer value to your students will have an impact on your price.
As a basic example, if you have an 8-week course teaching how to use video editing tools, you’ll have a different pricing model than if you were creating weekly videos about different video editing techniques.
The first one, the TVOD model, means you need to regularly find new learners to take your course or create new courses to sell to them – so you’ll probably charge a higher price to earn back your costs quicker.
The second option, the SVOD model, is more likely to give you a long-term stable income and can let you set a lower price based on a “forever transaction” that we looked at earlier.
Choosing between these models comes down to 2 factors:
- When you intend to create your content.
- How you want to realize the value of your content.
If you plan to create a standalone course that’s ready to go before you start selling it – a brief history of the Roman Empire or the basics of knitting, for example – then sales on a transactional basis makes sense.
When you want to offer longer-term knowledge and skills development – a class a week about a Roman emperor or how to knit a different item each month, for example – which can often require a regular time commitment, then a subscription strategy works better.
Your business model may require you to bring in money quickly, maybe your course is a springboard to scaling your business or you need cash to move to your next course, so selling one-off courses is logical.
When creating video classes is the long-term plan and you want to create a regular, recurring income, subscriptions is the direction to go in.
We’re doing some more maths, next.
Factor #3: The cost of development for your course
Flexing your course creation skills and bringing your learning material to life takes time… and money.
At the end of the day, you’re creating your course to share your skills and make a profit – so you need to understand your costs to know where that break-even point is.
You still need to know all your costs, both tangible and intangible, so you have a baseline figure that you can aim for.
Some of the things you need to take into account when looking at your development costs are:
- How many hours of work you put in and what each hour of your time is worth.
- Staff costs if you have an assistant, editor, or other team members working on content.
- Upfront costs such as buying new cameras, microphones, computers, etc.
- The cost of tools you’ve invested in, like video editing software.
The price of your course should reflect the work you’ve put into it, but that doesn’t mean you should put in fewer hours to drive down costs and keep course fees low.
When you put a lot of time, effort, and knowledge into your online course, it’s clear for your students to see and they will appreciate the value when the price is right.
Time for another factor you need to consider.
Factor #4: Your audience
Whether your potential audience is in the tens of thousands globally or just a few hundred will have an effect on what you can charge.
First, you need to consider how much your target audience can afford.
Say you’re targeting high-net-worth individuals and offering a highly valuable learning experience; while you may not have a lot of people to sell to, they have money to spend on the right course at a high price point.
Now let’s say your audience is people who want to do yoga or teenagers wanting to learn drums; while you have a lot of potential customers – they may not have as much spare cash for a big course price.
A good starting point is to look at who your existing audience is.
Do you run a Facebook group or host a YouTube channel already?
If you already have an audience, you still need to consider how you can reach out to them and make the conversion from viewer to paying member.
From our experience here at Uscreen, we’d say that a conversion rate of around 1-2% is a reasonable guide – that is, for every 100 people in your audience, you can expect 1 or 2 of them to buy your course.
Aside from your current audience, there are plenty of new customers looking to tap into your know-how; you can target them with paid ads and other marketing techniques.
Along with income levels, you also need to consider the time your audience can commit to your coaching or teaching – the more time people have, the more they’ll see the value of your course.
Moving on to another consideration when pricing your next or first online course.
Factor #5: Launch
The way you plan to launch your online course will have a big impact on how you plan your course pricing.
If you already have an email marketing list or an established audience, you may want to offer an exclusive discount.
This can be time-limited, e.g. for the first month you offer half off, or you can limit it to numbers, such as the first 100 students can access your course at a lower price point.
When you’re launching your course, done is better than perfect.
Getting your course launched and available to your audience as soon as it’s presentable will allow you to get money flowing quickly to start to cover some of your fixed costs.
It’s a good idea to charge a lower price at this point and be sure to gather feedback from your new students so you can make improvements and fine-tune your pricing.
Let your early learners know that you’re charging less and looking for feedback – it’s a great way to engage with people and let them feel like a valued member of your community as well.
If you haven’t yet found or engaged with your audience, you may also want to consider special launch pricing to get course sales moving, such as “early bird discounts” or a larger discount for long-term sign-ups.
Have your launch marketing strategy in place and your pricing structure ready, and be ready to adapt and change as you grow.
We’re going to look at how growth will affect your pricing, next.
Factor #6: Growth
What’s your long-term plan after launching your paid course?
The way you intend to grow your business should have a direct effect on the price you set.
There are lots of ways you can grow your online teaching business, such as:
- Adding more high-quality content and pricing tiers.
- Adding new stand-alone courses to sell as bundles.
- Including extra features such as live stream classes and webinars for a higher-tiered subscription.
- Moving from pay-per-view to membership pricing when you feel you have enough content and long-term value to offer.
- Offering a free course or bonus content to show how useful your lessons are and moving to a higher price point.
- Selling different content types like podcasts and ebooks as you move to a premium pricing model.
There are loads of ways you can grow and develop from the first coaching sessions or training courses you upload.
How you intend to grow should help you understand the price you settle on for your course launch.
Now we’re looking at how to use these considerations to determine your pricing calculations.
How to Price Your Online Course In 5 Simple Steps (Based on a Hypothetical Scenario)
Now that you know what you need to consider when it comes to setting your price, we’re going to walk you through the steps you need to set your optimal price.
To guide you through the process, we’re going to be using the hypothetical example of an industry expert launching an eLearning course about search engine optimization (SEO).
Let’s look at what we need to do.
Step #1: Conduct audience research
To understand our potential learners for our online business selling courses, we need to conduct audience research.
The main goal at this point is to understand how many students we think are going to sign up for our SEO course.
Like we said before, a reasonable conversion rate from organic social media is roughly 2%, so we need to look at our audience on platforms like…
…and calculate 2% of that number.
Next, we can use our email list to contact our current subscribers to figure out who would be interested in our course.
We could use this email to ask some other quick questions to help, such as the price they’d be willing to pay, but we’re still focused on getting a number for our potential students.
If we didn’t have an existing audience, doing market research on platforms like Reddit or Quora could also help us understand how many people buy SEO courses.
Once we’ve got an estimated number of students, we need to look at our finances.
Step #2: Define your revenue goals
Now that we know what our baseline costs are, we also need to figure out how much revenue we want to generate.
We need to generate enough money to make the work we’ve done worth it, whether we’re looking to make a passive income from an evergreen course or offer uncapped value and invest time in our regular online course creation.
Our revenue goal should cover our costs and make an income we can live off.
This means calculating our personal costs, in the same way, that we’d compare a salary offer for a job against our rent and bills.
Once we’re done calculating all our expenses, we’ll come up with a target revenue for the next 12 months.
Time to check out the competition in the next step.
Step #3: Conduct competitive research
Next, we need to take a look at the people already selling SEO courses and how much they charge.
We’re not going to copy them, but we need to see what’s already going on in the market.
We need to look at the cheaper, mid-market, and higher-priced course offerings.
By doing this, we can see which audience segment they speak to and how much each segment tends to pay for an SEO course.
Exploring free courses and looking at a low-priced course or 2 will show us what’s available to everyone – and validates that our course has the potential to make money.
Here are some popular SEO courses on Udemy that we can use for reference:
Image Source: Udemy
Then, we look at the different prices for both complete courses and the subscription-style memberships.
Here, we’ve got the prices for some other SEO courses we’ve found on a blog – you will usually find this type of aggregated information put together by bloggers in your industry.
Image Source: Reliablesoft
Gathering a bunch of information, we then can do a quick calculation of the average price for the same level of information we’re offering.
Next, it’s time to assess our own costs.
Step #3: Come up with a cost of development for your online course
Knowing the amount of money we’ve sunk into our course development is an important factor to come up with the price.
To do this, we need to consider:
- The amount of time we’ve spent working on writing and filming the course.
- What we’ve paid our team to design graphics, quizzes, workbooks, and worksheets.
- How much we spent on a new camera and microphone.
What we get from this is the dollar amount we’ve invested into the course and what our minimum income goal needs to be.
There’s one more step to complete.
Step #5: Use our course pricing calculator to get started
We’ve gathered a lot of data for our SEO course, now we need to plug that information in somewhere.
One option is to create a complicated equation or spreadsheet that balances all these factors.
Alternatively, we can use the Uscreen Course Price Calculator to input our data and come up with a suggested price for our SEO course.
Try the online calculator for your own course.
Use Our Course Pricing Calculator to Price Your Online Course With Ease
Now that we’ve gone through the information you need to figure out how to price training services or coaching classes, you can plug that into our calculator.
This isn’t a hard and fast number, but more of a solid guide to help you figure out where you should be landing on your price point.
Here’s how you can calculate your online course’s selling pricing:
- Audience size
This number comes from your audience research.
It’s based on some data, such as your expected conversions from a free audience to paying students.
- Revenue goal for the course
We’re looking at the number you want to see on your bottom line.
You can play with your expectations and see how the income you want will affect the price of your online course.
- Average price of competitive online courses
You’ve looked at your competitors, whether they’re targeting the same people as you in terms of income level, and information they’re sharing.
Now, add in the average for comparable courses to have our calculator take it into account.
- Estimated cost of course development
You want to at least break even, no matter if you’re a new course creator or an experienced video entrepreneur.
Knowing your development costs will make sure that, at minimum, you don’t take a loss.
That’s all you need to know about pricing a course, so let’s finish this up.
Now Over to You
That’s everything you need to know about pricing your online course.
We can’t give you an exact answer, but now you know everything you need to be thinking about in order to put a dollar amount on your work.
You’ve got the tools to come up with the numbers you need to make sure you get a decent return on investment – and our handy Course Pricing Calculator to plug it all into.
Are you ready to turn your online course idea into a website with paying students?
Sell Your Online Course With Uscreen
The post How to Price Your Online Course: Complete Guide (& Calculator) appeared first on Uscreen.