What Everybody Needs to Know About Pricing Online Courses

Turning ideas into money by pricing online courses correctly

Pricing your online courses isn’t easy. If you go too low, people won’t believe your course offers value. But if you’re too expensive, people won’t want to part with their money. So what do you do?

To help you figure this out, we took a look at how legal education startup LawCPD  –  CourseGenius’ sister company –worked out how to price their online courses when they first launched in 2008.

Case Study: LawCPD

LawCPD started out just like you. The co-founders were new to online training, and wanted to launch a new business selling online courses (in this case, continuing professional development – or CPD – courses for lawyers).  They were the first in their field to take this type of training online which meant they had to figure out everything from scratch – including how to price their courses. 

CEO Sarah Mateljan started off by conducting extensive competitor research. Because there were no other companies selling online CPD courses to lawyers at the time, she researched companies delivering CPD training face-to-face and found they charged around $100 for one hour of training.  Next she conducted some research into pricing psychology and found that having a price that ended in a “9” gave consumers the impression the course was cheaper. Finally, Mateljan took a close look at LawCPD’s target market to work out how lawyers viewed online training and how the company should position itself to indicate it offered value.

LawCPD was a new offering, like your course may be, so it was up to Mateljan to set the standard. She wanted to position LawCPD’s course offerings as being equal in value to the traditional face-to-face training on offer so she priced it accordingly, taking her research into pricing psychology into account, at $99 per hour. LawCPD launched with this pricing in 2008, and has since grown to become the leading provider of online CPD for lawyers in Australia.

Four lessons for pricing your online courses

1. Research your competitors

If you’re trailblazing and no one actually does what you do yet, congratulations! To gain a competitive advantage, you'll need to find the services or courses similar to yours, either in an adjacent industry or in your field, and research what they charge. This will give you an idea of where to start. 

If someone else is already creating online courses in the same field, never fear – this just means you have a more definitive benchmark. Think about how you compare to your direct competitors and how you want to position yourself compared to them.    

2. Learn the psychology of pricing

You may not have a degree in psychology, but you can develop an understanding of how your customers might view your pricing. A little bit of research will help you on your way. You’ll find out things like:

  • The power of 9. People perceive a $99 course to be better value than $100, even though there is only $1 in the difference.
  • The price perception. Positioning your course as valuable relevant education will put you ahead of someone who just sells a PowerPoint or gives a lack-lustre presentation, even if the information is essentially the same.

3. The cheapest course doesn’t always sell more

We’ve said it before, but undercutting your competitors may not actually make it easier for you to sell your online courses. It may actually deter prospective customers from purchasing your courses, as they may view them as less valuable than your competitors’ offerings. This is definitely not a position you want to be in, which leads us to the next point...

4. Know your value and keep up with competitors

Knowing your value to your customers and communicating that through your pricing will put you in the strongest position. After your launch, you’ll need to keep up to date with what your competitors are offering, and sometimes this might mean adjusting your pricing to maintain your value position. In LawCPD’s case, this actually meant the company needed to increase the prices of their online courses after launch to maintain its competitive position!

Pricing is only one part of the puzzle – you also need to let your customers know what value you offer over and above your competitors. There are some great questions you can ask yourself to identify your value proposition, and great tools you can use to communicate this to customers like your blog, your social media channels or emails.

If you can show how and why your online course is better than your competitors and position yourself as the leader in your field, you’ll find learners will be excited to see what you have to offer.  

To get started and sell your first online course, sign up for a free trial of CourseGenius today!

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