May 16, 2021
A common problem for new creators is to price courses too low. Instead, rely on these simple steps to find the right price for your course, including:
- Pricing based on the value of your course rather than length;
- Assessing your competition; and
- Considering your customer’s alternatives.
In this article, we’ll walk you through the entire process, step by step. If you are not at the pricing step just yet and still need help creating online courses, click here.
Key Takeaways
- Pricing an online course under $50 is generally a bad idea.
- You probably won’t nail the perfect price from the start. You need to test.
- Trying to have the lowest price sets you up for failure.
- Adding value in the right ways is the secret to getting away with a premium price (find out how 👇)
- FAQs at the end are super helpful if it's your first time launching a course
Every Online Course Has Its Ideal Price (or Does It?)
Let’s get something clear from the start:
There is no perfect price that’s going to give you the best results forever. Prices aren’t static, and what works today may not work tomorrow.
Don’t get too hung up on finding a price you can set and forget. Instead, think of pricing courses as an ongoing process. You’ll go through a testing process to find the price that works right now and adjust it when needed.
That attitude takes a lot of the pressure off course pricing and helps you think of prices as adaptive rather than set in stone.
Pricing Your Course For The Right Audience
Before jumping into the ways to price a course and the things you should keep in mind, it’s worth thinking about who your course is for.
Online course consumers fall into three broad categories:
- Enthusiasts who sign up for free online courses and never end up completing them. Or, they’re happy to spend hours on end completing courses and stacking up certificates with no intention to ever pay for training.
- Bargain hunters are willing to pay for a course as long as it is heavily discounted.
- Value learners who understand the value of expert training and are ready to pay a fair price for a well-crafted course.
It should be obvious that your target audience is the third group.
If you appeal to this category, you will build a group of “superfans” who’ll want to purchase your lessons in the future. These superfans will also provide social proof, spreading the word to other “value learners”, hence bringing you new valuable students.
Keep them in mind when you’re deciding how to price your online course.
Now, let’s move on to one of the most common mistakes people make when choosing a price.
The Problem of Pricing Too Low
Far too often, creators undervalue their material, and that has the potential to derail your entire course. And it has to do with a harsh realization:
If you try hard enough, you can find anything you want for free online.
And while that’s true, what people pay for is a personalized experience and the convenience of not having to do all the legwork. When you’re thinking about how to determine a price point for your course, remember that basic value proposition.
Or maybe you’ve thought to yourself that your course isn’t all that valuable. After all, there are people out there with a lot more experience than you with cheap courses.
Aren’t there?
By the end of this article, you’ll realize the answer to that question doesn’t matter.
As you can see, pricing your course too low can be a recipe for disaster.
The Perceived Value of Your Course Drops
Have you ever heard the phrase “you get what you pay for?”
Sure you have, we all have. And it plays a major role in how we view a product’s quality. Research from Vanderbilt University (unsurprisingly) found that consumers link high price with high perceived value and vice versa.
Whether that’s the case isn’t important. What’s important is the message you’re sending with your online course pricing.
Generally, when we as consumers have incomplete information about a product, we use previous experience to fill in the gaps. Since people have to pay for the course before they find out what’s in it, a handy way to fill in the gap is by assuming the price matches the course’s value.
A Premium Price Calls for Premium Promotion
As a course creator, part of your job is to promote a course after launch.
Don’t know much about promotion? That shouldn’t stop you from doing your best anyway, and Optinmonster has a killer resource to get you started.
But, here’s a little quirk about putting effort into marketing a course:
The less you charge for it, the less you’ll want to promote it. It’s an almost universal trait, and you shouldn’t underestimate its effect on you.
Typically, people feel that a low price is incentive enough for people to buy a course. And beyond that, just think about how much effort you want to make to sell your course for (say) $10 to one person?
Probably not a lot.
And think about it this way:
It takes just as much effort to promote a free course successfully as it does to promote a paid one. It makes more sense to invest your time and effort in the paid one.
Competing Purely on Price is a Competition You Will Lose
The sad reality is that someone is always willing to undercut you on price. And that’s true in just about any business. If you price your course to be the cheapest, you might as well give it away.
But the good news is that people who only want to pay less aren’t the type of customers you want anyway. Your course price is not for them.
By narrowing down your target market, you can compete within a price range that makes financial sense for both you and your students.
Low Prices Disincentivize Engagement
One of the surprising revelations of the MOOC revolution is that people who don’t pay for training rarely finish a course. In fact, free course completion rates were ten times lower in some cases than for learners who paid for a certificate.
In short, when your learners have no skin in the game, their engagement drops. And that leads to a bunch of people who:
- won’t finish your course; and
- won’t have much of anything to say about it.
If you take your job as a course creator seriously, your priority should be to generate transformation in your learners. If they don’t finish your course, there’s very little chance of that happening.
From a purely practical perspective, you also aim to generate passive income from your course. Succeeding without a lot of happy customers willing to share their experience will be a challenge.
Discounts Become Meaningless
This one may seem trivial, but it’s a lot more pivotal than you expect at first. And it’s really simple:
If you’re giving your course away for peanuts, don’t expect to generate any buzz with discounts. It won’t happen.
Everyone loves a good deal deep down. So leave room for people to feel like they’re getting one when it’s appropriate.
How To Price Your Online Course Just Right
That was a lot of information about why you shouldn’t underprice your course. And if all you get from this article is that you should avoid lowballing, it was time well spent.
But now, let’s take a quick peek at what is the correct price. As you can imagine, there are also problems when you swing the pendulum too far the other way and price too highly.
Pricing Yourself Out of Business
By now, you’re probably thinking to yourself that it makes sense not to price a course too low. But you also think that if the price tag is too high, people just won’t buy it and you’ll be in an even bigger mess.
To an extent that’s true, but you’ll never let it get to that point.
Because you’re going to test prices.
Price testing is a tried and true method to find a price point that the market will tolerate without killing your chances at selling courses.
The demand for online courses is very flexible, so it reacts to price changes aggressively. So, your audience’s behavior will let you know if you’re pricing right very quickly.
Using Demand Curve in Online Course Pricing
Demand curves are a staple of economic models. And we’re going to teach you how to use one to find a price for your course that provides the best profit margin.
Here’s how it works:
In the example above, conversion rates peak at the $200 mark. You can estimate your conversion percentage pretty simply:
Conversion rate = Sales * 100 / total page visits
Or use this calculator.
When you’re testing prices, start low and increase it slowly to track the conversion rate at every price. If it’s your first online course ever, you may have to stay on a price for a while to get an accurate conversion rate.
Keep increasing your price until the conversion rate starts to drop. If it keeps dropping after pricing a little higher, you’ve found the price where your profits top out.
In the example above, that price is $200. And, because you’re a savvy salesperson, you know that 99-ending prices are better at converting; the golden price there will be $199.99.
We should stress that this is a highly simplified version of price-profit pricing. You also need to take into account your ad spend and other associated costs at every price. But most of the time, this simplified approach will work.
Pricing Strategy for Training Courses - Other Variables
The methodology is one thing. Applying it is another problem altogether.
Here are several other important considerations for online training prices:
Value Versus Length
Many newcomers to online training make the mistake of assuming people want a long course.
The reality is that most people look at the value more than anything else.
Having a fluff-filled course that’s 50 hours long doesn’t give you the right to demand a premium price.
Seth Godin’s altMBA is just a four-week training. Yet, it’s priced at $4,450.
Seth and his team know people will gladly pay the premium price tag because he knows the value of the training.
On the flip side, most people will feel cheated if you charge several hundreds of dollars for 15 minutes of content, no matter how great it is. Try to emphasize value pricing, but don’t be too stingy with your time.
You’re Never Pricing in a Void
For better or worse, you’re entering a competitive marketplace when you create an online course. You’ll have to respect pricing conventions and evaluate your competition to an extent.
Luckily, there are hundreds of online course websites where you can find courses similar to yours.
But, this is very important:
DO NOT choose an average price among competitors for your course. What you can learn from competitors is:
- how much people are willing to pay for a course like yours; and
- see what others aren’t offering to validate your pricing decisions by having a better value proposition.
Test a Lot of Prices
Don’t be afraid to spend a lot of time testing. Even if you think you’re happy with your price, there’s a chance you might reach a better audience with a higher or lower price point.
And you can also try using pricing tiers. Not everyone is interested in all the content you offer.
Many students might be willing to pay a lower price for less content if they don’t need some of the extra value you offer.
Consider Your Credentials
Every year, Warren Buffet auctions a one-on-one lunch or dinner with him for charity purposes.
The record price paid for one such auction so far is $4.6 million. That’s how much Buffet’s time is worth to someone.
The takeaway is this:
If you have something worth teaching, people will pay much more than you think to learn it.
This is the part where you have to be honest with yourself. If you don’t have much of a following or real-world experience to show, you can’t expect to price your online course very high.
Bonus: Read Parker Walbeck’s creator story on our blog to see how building authority before launching a course can up its value 5-6x.
When it Makes Sense To Price Low
Don’t worry; we’re not about to throw everything we just said out the window. However, you should know when a low price is a good idea, so here goes.
During The Testing Period
This one should be obvious. Don’t worry too much about the price tag while you’re in the testing phase.
After all, the whole point is to find a price that works for your course. The testing period before you officially launch your course is the time to gather data, even if you have to operate at a loss.
It’s also a good idea to label the prices as “pre-launch” or “beta” or anything you choose to make sure your audience understands it will likely go up. Otherwise, people may feel like you pulled the rug out from under them when you reach a final price.
Lower Course Price As A Last-Ditch Effort
If you have stragglers in your funnel that just won’t budge, give them one last chance before you give up.
It’s not a surefire way to land a sale, and you should definitely be smart about when it makes sense to do it. For instance, people can take many months to decide to take a sailing course.
Unless there’s something else to incentivize them to buy other than the price drop, don’t bother with it. Even if you do, those leads were probably never going to convert anyway, so don’t go too low. If a 30% discount doesn’t get them to buy, it’s not about the price.
Limited-Time Price
If you plan to increase the price for your course in the near future, that’s an opportunity to generate sales.
Presenting the current price as a limited-time offer creates urgency. That urgency is enough to get a few people who are still on the fence to jump on it.
Alternatively, you can reduce the price for a limited time specifically to create some buzz. It’s a simple strategy but always effective in increasing sales at least fractionally.
When You’re Giving Away Your Course
That’s right; we said giving away your course—as in for free.
Why would you do that? Several reasons:
1. Onboarding
Free onboarding courses aren’t applicable to everyone. But, if your course is meant to teach someone how to use your product, it’s a good idea to include it when someone buys the product.
That’s not to say you should make it available to someone under the condition of buying your product. You should still charge full price for the course if it’s bought separately.
2. As a bonus
Are you selling any other services, courses, or products? Bundling them with your course could help you boost sales.
And that’s true even if the product is not strictly related to your course.
3. Lead generation
Hyax.com can help you set up an entirely digital business all in one place. Offering free courses can be an excellent lead generation engine for your business.
The courses don’t need to be too in-depth or comprehensive. But they should offer some genuine value.
People who sign up for your course will probably be a good audience to target with the rest of your business.
How To Price Your Online Course — Adding Value
We hope at this point one thing is abundantly clear:
A low price for your course is very rarely a good idea.
But if you’re going to charge a premium price, you’d better be ready to deliver a premium product. Below are some pointers to help you justify a higher price for your course.
Create Private Student Groups
People love being a part of something bigger. And if you help them connect through your course, it will increase value in several ways.
- Folks who take your course will create a community of like-minded people who can all learn from each other.
- You can share exclusive material with the people in course groups.
- You build a tight relationship with your audience and grow your brand.
Hyax is a game-changer in this respect. Hyax allows you to make courses, membership websites, and sell digital or physical products. In other words, you have all the tools to create your online business from the ground up.
You can create courses bundled with group memberships or vice versa—give the membership group access to people who buy your course.
Get as Specific As You Can
Broadly speaking, people are willing to pay more for highly specific expert instruction than sweeping topics. It’s much easier for students to:
- justify a course purchase that will deliver specific results; and
- wrap their minds around a specific topic and come away with value.
Specific courses get fewer clicks but much higher conversion rates. If you measure return on investment, a specific course will almost always blow a general one out of the water.
One-on-One Coaching
If you can manage it, one-on-one coaching is an excellent way to increase the value of your course.
But, be realistic. Only offer this type of coaching if you know for a fact that you’ll have the time and energy to deliver. Be specific about the times and dates it will be available and how you plan to deliver it.
Coaching is an extremely powerful value add and a way to keep your students accountable for finishing the course. Used right, it can easily increase the price of your course.
Include Portable Resources
When someone pays for online instruction, there’s almost an expectation that they’ll come away with something to show for it.
Here are some ideas for portable material to offer your students:
- Presentation slides
- PDFs
- Audio from lessons
- Worksheets, checklists, templates, guides
Try to be creative and think about what you’d want from the course as a student and what material students will want to look back on when they need a refresher. With the help of an AI PowerPoint generator you can also create dynamic, interactive presentations that students will find more engaging and informative.
Find Venture Partners For Your Online Course
If you build a course around a specific tool, product, or service, reach out to the creators of that tool. They may be interested in a partnership.
People who sign up for a course in Adobe Illustrator would probably love a discounter Adobe Creative Cloud subscription.
It’s a simple and effective way for your partner to reach interested customers and to increase the value of your course.
Include Certificates of Completion
If you do a quick search on how much online classes cost, you’ll find that those with certificates cost much more on average.
Simply put, a certificate is something that your students can hang up on their digital “wall.” It’s a small value add with a big psychological impact.
So, in summation:
Conclusion
If you’ve made it this far, you’re well and truly ready to price your course for maximum profits. It’s not as simple as thinking about the price you’d pay for your course and calling it a day.
However, it’s not that complicated either. You just need to start somewhere and feel out the market. As long as you provide enough value, people will be happy to pay for premium content.
And, yeah… if it were up to us, you’d use Hyax to build your course. It’s got all the tools you need not only to create a course but also leverage that course to build an entire online business.
FAQs
How much should I charge for an online workshop?
You can think of $50 as the bottom price to charge for an online course or workshop. Anything below that is probably not worth the effort to put together.
People will pay what your workshop is worth, and that comes down mostly to credibility. If you have enough work to show and enough experience in your field, don’t settle for rock bottom prices. Price your course in proportion to the value you provide.
How much should I charge for online fitness classes?
Online fitness classes should cost about 75% of what you would charge for the same in-person training. So if your going rate is $100 per hour, a good starting point would be around $75 for your online classes.
What's the average price for an online course?
Research suggests that online course makers on independent platforms charge $185.99–199.99 for a course on average. However, most courses fall in the $70–$100 range.
How do I test different course pricing?
You will want to use a tool that allows you to A/B split test your sales and landing pages. This allows you to set different prices for different people. After you have collected enough data, you choose the winning price point.
Hyax allows you to do this and test many different checkout pages for pricing, product, copy, creative etc.
How do I get more online course sales?
One of the best ways to generate more course sales is to use affiliate or referral programs. This allows you to reward existing students for referring their friends and coworkers.
A platform like Hyax has this automatically built in so you can start generating referral sales right away and not have to use an additional referral program.
Should I put all my courses into one bundle package? or split it up and sell separately?
It's best to sell your courses separately or in small bundles on the same topic. Bundling is also a great way to create special one-off sales and offers to increase your average order value.
However, you do not want to always be on sale and bundling your courses as it does decrease the perceiveded value over time.
How do I know if I've priced my course too high? or too low?
It's a good idea to look at your conversion rate and listen to your customers. If you have a low conversion rate and a lot of people complaining about the price or asking for refunds, you might want to test a few other prices or try and make the offer more compelling.
For example, you could add more value by including weekly/monthly group calls, 1on1 consultation sessions, access to a private group or template downloads.
What kind of discount should I apply to my course to attract bargain hunters?
This type of course taker usually only sees the value in taking a course if it has been discount. It's a good idea to use remarketing in this situation to only give the discount once they have been qualified as a bargain hunter.
This means that you keep your course at full price to the public but offer the 1st lesson on a section of the course for free to capture an email. Once you have their email you can start sending the emails to purchase the course.
If they have not purchased the course after 3-5 emails and 1-2 weeks, you can start applying discounts. This can be 20-30% or a dollar amount like $100 off for the next 48 hours.