As a creator, you’ve probably figured out that one of the main streams of income you can create is through building online courses.
They’re your way to that sweet, sweet passive income we’ve all been dreaming about.
Once you’ve decided you’re ready to roll with your online course and found your audience’s main pain point, your next big hurdle to cross before sending your online course out into the arms of your potential students is pricing. But where do you even start?
The three tiers of online course pricing
A few years ago, the general price for an online course would have been between $200 to $250 – not anymore. Sure, there are still some that hover around this amount, but the trend is skewing into the thousands these days. So many of the courses I see today are priced around $2,000.
Big ups to those creators for making courses that people are interested in enough to lay down those dollars, but that price point is not necessarily for everyone. So with such a vast difference in pricing, how do you know where your course should land in the big picture? I think the first step is to weigh the pros and cons of each of the three tiers of pricing.
Free online course pricing
First things first, let’s talk about giving your course away for free, because free isn’t always great.
There’s a connotation to “free” that just feels cheap. I know if I see anything marked free, I’m automatically thinking that something has to be wrong with it or it’s not worth my time. Nothing really good can come for free, right?
Our friends at Teachable did a study to find out if this sentiment was true. They wanted to know if there was a difference in engagement between a free course vs. a paid course. And guess what? There was!
When you give a coupon for a free class, the completion rate can be in the low single digits. When you charge for the same course, the completion rate can be 30% or 40%. The more you charge for a course, the more people actually complete it.
– Ankur Nagpal, Teachable CEO and Founder
Basically, just by giving a course monetary value, the completion rate increased around 30%. That’s because people are more likely to finish something if they’ve paid for it. They know it has worth, they’ve sacrificed a little of their income for it, and want to make sure they get their money’s worth.
When you give your online course away, it’s like you’re telling your audience that it’s not worth their time or that there’s no value to it – and that’s just not true. By giving it a price tag, you’re automatically showing value.
All this isn’t to say that you shouldn’t give things away for free. I’m all about freebies as incentives and sneak peeks. So yes, please create your free email courses, but use them as promotion for a more in depth online course. If you’re wanting to create a sense of value around your course, please put some dollar signs in front of it.
So now that we’ve thrown free out the window, let’s talk about pricing low or high.
Baseline online course pricing
If you set your price point at the baseline according to Teachable, you will have a much wider audience. Making it affordable to the majority means more people can take your course and if you’re solely in this for the good of the people and don’t need the income, then this area on the spectrum might be for you.
But while you’re making it available to the masses, having a lower online course price point might also lower the expectation of value in your course. As we’ve seen with Teachable’s research, that means lower engagement rates, meaning you might have a decent number of people sign up for your course, but the number who actually complete would be low.
Premium online course pricing
First, to offer premium online course pricing, you need to make sure you can deliver a highly valuable course full of different types of content, customer support, community groups, and more. If you’ve got the content and potential to hit those higher price points that means you’ll immediately have a higher expectation of value and increased engagement rates. You’ll also have the possibility to meet your revenue goals quicker without needing as many subscribers.
Of course this seems like a no-brainer, but higher prices do mean a more limited customer base. Are you ready to cut out a large portion of potential students because they can’t afford your course?
With these three pricing tiers in mind, do you know where you want to be in the spectrum? Let’s dive deeper into this thought process to make sure you absolutely hit the sweet spot for you and your audience.
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How to price your online course
Here’s the thing: No one really knows the value of a course. There’s no hard and fast rule that a course of eight modules with four videos each should be X amount of dollars. And there’s no way to really compare prices of what you’ve created with what someone else has created. We all put different value on different aspects and just because your course is structured similarly doesn’t mean that it has the same content value.
So how do you do it? How can you accurately price out a course? I can’t tell you exactly how (remember: no one can), but here’s a couple things to think about so it doesn’t feel like a big guessing game.
What types of content do you have for your course?
The more material, the higher your price. Your audience will see more value if there is a list of activities they can be a part of and projects to cross off a list. So if you’re looking to create a higher price point for your course, add in Facebook community groups, downloadable workbooks, high-quality video, and anything else your creative mind can come up with as long as it fits in with your topic and skillset.
What do you want to make off your online course?
When I was a freelancer reconsidering my copywriting rates, I would frame it by thinking about what I would like to make in a yearly income and then broke that down to what I needed to make monthly. That easily translated into how much I would need to charge for my work.
Think of pricing your online courses in a similar way. Think about all the time you put in and all the added expenses that went into creating the course. Next think about how much you would like to make off it.
Is this a side project for a little added stream of income or is this how you plan to pay your mortgage every month? Thinking this way could help you decide on price points.
Think about the benefits over feature
Finally, the most important aspect – the way people are attracted to your online course and why they will pay a good amount of money for it is the outcome. More than workbooks, webinars, and checklists, people want to know how your course will change their life. How is completing your online course going to be a solution to their problem? There’s a couple of points to this one:
Figure out why they’re taking the online course.
What is their main pain point? Is it to quit their job or learn a new skill? What is their internal struggle and how can your course fix it?
Position your online course as an investment.
Once you know what their struggle is, you can tell them how your course will help them overcome that struggle and reach their goals in their career or personal life. Nathan did a great job with this on his sales page for Authority.
Present your online course as a solution, not an offer.
I think this is actually one of the most important things you as a creator are doing for your audience. Creating an online course that propels them into a new phase of life they’ve been struggling to get to is such an amazing gift to give.
Yes, your course has great content. Yes, you’re offering to teach them a skill. But your audience is looking for some warm-fuzzies. Tell them exactly how your course is going to make their life better. How do you do it? Take a look at how the ladies at Think Creative Collective sell:
With each online course, they make sure to let their audience know that what they’re teaching is not just about the immediate business results. When you have the course’s skill down-pat, that means more freedom and more peace of mind.
When it all comes down to it, your audience is looking for transformation – that one thing that will help them get out of their current situation and into the life they dream of. How can your course get them there? How is it going to change their life? It’s so much more than learning Adobe Acrobat or how to make money on Instagram. People are looking for a lifestyle and your course can help them create it.
Can you justify the price of your online course?
If you want people to take action, you need to have them invest something. I would argue that something should be more than $0, $50 or even $100. But the big question is – “Should you go up to $2,000 or more?” I’ve even seen $5,000 to $10,000. Is that really what’s best for your customer?
If you’re going to charge a high price for your online course, you need to ensure success. You need to invest the quality into your online course that warrants that pricing. Is your material tested? Do you have case studies? Is your course actually working for people?
And what are you doing to help those people who purchased the online course? If the answer is nothing – if you’re handing them the material and walking away – you shouldn’t charge those high-end prices. You need to be in contact with your students to make sure they’re getting the real benefits of the course.
On the flip side, I should say that I don’t think $2,000 is ridiculous for great training that will impact someone’s life. If you think about it, a $2,000 course is about the same price as a single class at most universities – that’s not bad. You can teach so much more value in a concentrated amount of time in an online course than you can in a three credit university course. So if you compare it in those terms, then you could charge a lot.
When it comes down to it, make sure you’re taking responsibility for the success of your students.
- Follow up.
- Track their progress.
- Do the work to make sure they get a great ROI from what you’re doing.
If you can do all that, then I believe you can feel really good about hitting a higher price point for your online course.
Extras to make your product more enticing
To correctly price your course, you have to show the benefits of your course. That means you want to think about how your course is going to change your audience’s life, help them reach the next level for their business, or make them a smarter, stronger, more able to person.
The benefits are SUPER important, but lets focus on some more tangible ways to make your course more enticing- extras!
Creators are making online courses based on 1×1 work (ideally), but 1×1 work often carries a different weight than a DIY course. While a course might feel more complete to you, it’s all about perceived value for your customers. So, to increase the perceived value for a course that’s already chock full of your best stuff it’s time to add in some extras.
Extras, bonuses, content upgrades- whatever you call them, they help you add some hype or give what Help Scout calls GLUE (giving little unexpected extras) to your course. They say GLUE is one of the few surefire ways to achieve sticky loyalty that so many businesses yearn for. While there are so many different kinds of extras, today we’re going to focus on some of our favorites…
While some people are visual learners, others need to write things down and re-read to remember. Workbooks are the perfect accompaniment to a course for note-taking, references, and filling out as they go. It’s basically a handy tool to keep everything about your course in place.
You can even send them as a pre-course bonus if you think your audience needs some prepping to be fully prepared for the course or after the course is over for follow-up work.
Membership groups where you participate on a regular basis seem to have a bit of that 1×1 element going for them too. Your customers get direct access to you AND they get to interact with each other.
If you’re tight on time, but still want hands-on access to the 1×1 calls, maybe think about adding a few group calls to your course. You won’t be able to as in-depth with each course member, but you are still opening yourself up to answer their questions in real-time and get to know them a little bit better. Just make sure to set strong time limits and guidelines and make sure everyone has a chance to speak so they feel they’re getting value.
Ever done a webinar or workshop? If so, you already have existing material to use as a bonus. These are great because they are a recording of your teaching so it brings in the personality element to your course and builds even more trust and authority on your subject. As long as the content is applicable to the topic, it’s a ready-made option you can add on.
If you aren’t the expert, bring in someone who is! Hearing from industry professionals is always a major bonus for your audience. Not only are they getting valuable content from you, but they’re also hearing advice and real-life experience from people they admire. If you have access to some of the top people in your industry, I highly suggest asking them if they have time to sit down for an interview with you.
How will you price your course?
Assuming your course is top-shelf, full of interesting and new content, and 100% from your experience, I believe you’ve got it in you to find the right price point. Take yourself, your content, and your audience into consideration and give it try.
And if you’re still unsure of your price, here’s one last quick tip: start lower and raise it later. Increase prices as you set out new launches. Take an extra week or so and rework the content based on student feedback and changing trends. Your audience is going to see that they should buy your online course now because the price goes up as it gets better. They’ll also see that you have a long-term commitment to producing the best content that’s going to have the biggest impact on their lives and everyone is going to be better for it.
The post How to set the right online course price for you and your audience appeared first on ConvertKit.