5 Simple Ways to Price your Online Course
How to price your online course is one of the most commonly misunderstood things about building online courses. Here in this article we will help you gain a general understanding of how to price your online course for success, including what to charge for. This includes marketing costs and the time you spend building your contact list — meaning that you can probably charge more than you anticipated and still expect people to see the value in what you are selling.
Let’s dive in!
Your branding is a big part of your pricing
Just like your reputation is a big part of your business. A big factor in pricing your online course is what we’ll call ‘perceived value.’
Think of this like shopping at a clothing store. Typically, there are several options of a piece of clothing that are produced by different companies, with prices ranging from expensive to affordable. A customer expects to receive a certain return on their investment, even before it is calculated — that is the perceived value.
The more expensive product is perceived to be better, whether or not it actually is, and as such, to provide more value. This could be a longer useful life, it could be containing an added pocket that other similar items of clothing don’t have. Sometimes it’s just a label, like a recognized brand name or the fact that something is built domestically rather than shipped from abroad.
The same goes for online courses. There are likely others on the internet who have a similar business as you (especially if you adopted the popular “adopt and pivot” method that so many entrepreneurs use.) The more expensive ones immediately come off as better, whether or not they actually are, while the cheaper ones are perceived as less valuable — even though the creator could simply be monetizing further through affiliate links or ads placed within the course.
To charge a higher price, it ain’t always about the image
The student needs to learn your material. This is valuable to them, and they are willing to pay for it. When pricing, consider how much of a value add you are providing — will the buyer make more money in their career field because they took your course? Will they be able to add a new skill to their resume?
Let’s look at what I mean here. For example, if the established language learning site Live Lingua launched a language learning course, it would immediately have more perceived value than a course launched by a random blogger who no one has ever heard of. Therefore, Live Lingua can price their product higher, and still command a higher market share.
The same goes for the site Podcast Hawk, which connects podcasters to interview subjects. Because they are an authority in their field, the company could price a podcasting course at a higher rate than a company in the general digital marketing space.
You have every right to charge a significant fraction of what the student could expect to earn within the first year of knowing the skill you are teaching. The more specified the skill, the more you can charge — $500 to become an expert copywriter is nothing, if the student can take that skill and develop a long-term career around it.
Remember to note this when you are working on your marketing materials. Highlight such facts as the average salary of a copywriter, how much copywriters tend to charge per hour in a few different fields, and whether or not the student will gain a certificate by taking your course.
If you are providing networking opportunities through group chats, social media pages, or other forums, include that as well. Networking is among the most valuable offerings you can provide.
In your marketing efforts, clearly demonstrate what you are providing and why it is worth much more to the student — bullet-point lists and graphs are encouraged!
Simple Formula to Price Your Online Course
Think of the course as a per-hour platform. How long will a student finish it altogether? Know the right rate per hour for using that material in teaching – maybe that’s through web research or looking back at your own teaching experience. Apply that hourly rate to the course.
Consider everything that a student will benefit from your course such as additional resources, connections, information, etc.,. Determine a fair market value for these and then put your hourly rate — $50 — on top of that.
You can also consider your hourly rate when making the course. Lets say you have a five hour course. Take that five hours, times five hours of your highest rate of labor plus the average advertising cost per student, materials per student, and any other costs (CRM software use, graphic design and layout costs, etc.) all can be calculated in that total.
For example: 5 hours x $75 per hour, plus $65 average PPC advertising cost per student, plus $50 in material cost, plus $150 in networking value = $630.
That’s a fair price for a five-hour course that teaches a valuable skillset, and when scaled, you’ll make that ad infinitum.
Hopefully, you’ll get hundreds or even thousands of people paying for that rate, and you will have only done the hourly work one time.
This all holds up, even when there are people on platforms like Udemy and Fiverr who may charge a lower rate. You are providing more value by having better material and by offering networking opportunities. And don’t forget about these factors:
- Your $65 Facebook ad spends to land each person you sell. An email blast to your list of 2,000 email addresses, which you’ve spent a year building, that lands two students. That’s $1300 in income, for $130 and a lot of effort growing your contact list. You deserve to be paid for that!
- The person charging $50 for their course must do those same things, but is grossing far less, making their business model much less sustainable. Time equals money!
Why you shouldn’t underprice your course
Many people fail to properly calculate the value of their course.They are hoping that selling their service will be easier. (we’ve already uncovered why this is a bad formula).The thing is that they are not confident with the material they are using or their experience either.
You must know the value you are providing, and as lame as this sounds, you must “value” that value appropriately. If your student is serious about obtaining this skill and using it to further their career, they will see the value in paying a reasonable amount of money to obtain it.