The adoption of online learning has grown significantly over the past decade, making it one of the most profitable sectors in 2022 and beyond. As stated in a recent market report, the revenue in the global online learning platform market is set to reach US $9.79 billion by 2027 while growing at a CAGR of 20.48% during the forecast period of 2022 to 2027.
Not only that, the number of online learning platform users is expected to reach 244 million by 2027 creating unlimited growth scope for the players in this field. Not only the leading online learning platforms like Coursera, Udacity, edX, and Skillshare, to name a few, are capturing a significant market share, but the new entrants are also gaining traction with their strategic approaches.
One of the key factors that determine the growth and competitive advantages for your online learning platform is how you set the pricing for your online courses. With the availability of a myriad of online courses, it is important to choose a strategic pricing structure for your online courses/materials to optimize your business’s profitability. In this blog, we will provide you with a guide to pricing online courses like a pro.
Steps to Set Up Pricing for Your Online Courses
Pricing online courses needs a well-defined plan and strategic approach. Below are the steps that you can follow to price your online courses strategically.
1. Analyze Your Target Audience
The first step to pricing online courses is to do a thorough analysis of your target audience to ensure that your pricing structure is suitable for them. For instance, the pricing structure of the online courses for school students may not be similar to the pricing structure of the online courses for professionals or industry leaders.
But that’s not it, there are several other factors that you need to take into account while pricing online courses. Below are some of the top pointers you need to focus on while analyzing your target audience –
- What are the age groups/profession of your target audience?
- What are their key requirements like, skills training, taking assessment tests, or others?
- How is their spending capacity?
- What is their behavioral pattern for purchasing similar courses/solutions?
- Whether they are already taking online courses from any other online platform
You can conduct polls, voting, or run online surveys to gather the audience inputs and segment your audience on the basis of their key requirements, spending capacity and other factors. This will help you come up with the most suitable pricing structures for your audience.
2. Do Market Research
Market research is pivotal to have a complete knowledge of the present market, the global and regional market values, revenue, your target market share/ revenue, as well as standard market pricing structures.
For instance, no matter how good the quality of your courses is, if your pricing is too high compared to the standard market pricing, then it will not be suitable to gain or retain customers in the long run.
While doing the market research, you need to collect the following information –
- Average standard market pricing for similar online courses
- Pricing structures for the most sought-after online courses and materials
- The pricing graphs for the similar online courses for the past 5 to 10 years
- The shifts in the pricing structure with the market growth
- The market forecast and the predicted pricing graphs
- Pricing structures for the leading market players
- Pricing structures for your competitors and fast-growing new entrants
Having a clear knowledge of all these pointers will help you in setting up a market-driven pricing for your online courses.
3. Calculate Your Budget and Investment
While executing the above steps are important for pricing online courses, they are not enough as every business has its own budget and investment. To ensure the best possible pricing for your online courses you need to calculate the budget, available resources and the investment you need to make in your online learning business.
Remember, you need to cover the expenses you do in your business – both recurring and one time. So, it is important to calculate your budget as well as investment to come up with the most suitable online courses pricing.
4. Determine the Purpose of Your Courses
Once you are done with executing the above stages, you need to determine the purposes of your online courses and materials. It is recommended to segment your online courses and materials on the basis of the purposes they serve and then decide their respective pricing. Below is an example of setting up pricing based on the purpose of your online courses and materials.
|Online Course/Material Type
|Online Trial Courses
|Giving the audience a glimpse of the main course
|Introductory courses on various topics
|$25 – $120
Small courses dedicated to specific subject areas
|$30 – $320
|Advanced Training Courses
|Advanced training with online materials
|$1800 – $4000
|Strategically developed research & development courses
|$200 – $2000
|Training based on personal requirements
|$300 – $1800
The above chart is for reference only and it may vary based on the other factors like the cost to create and upgrade courses, marketing cost, and others.
As you can see, based on the type and purpose of your online courses, you need to set up pricing. For instance, the pricing for introductory courses should be lower than the dedicated mini courses, while personalized training courses pricing should be higher. You need to have a transparent idea about what goals the audience can achieve with the help of the online courses such as skills enhancement, career advancement, better income potential, learning assessment, professional growth scope and others.
5. Choose Your Monetization Models
Based on your online courses types, you need to choose proper monetization models. Below are some of the recommended monetization models that you can opt for your online courses –
Subscription Based Monetization Model – Customers can take a monthly/bi-annual/annual subscription.
Bundle Monetization Model – Customers can avail bundles of online courses of their choice at a reasonable price.
Ads-Based Monetization Model – In this type of monetization model, ads are inserted to your online courses.
Pay Per Course Monetization Model – This type of monetization model allows your customers to pay for every course separately. It is most suitable for the ones who are looking for a specific course.
Tiered Monetization Model – This is a type of subscription based monetization model where a customer needs to pay based on the tier he/she chooses and with increasing tiers, the pricing also increases. For instance, there can be one course in tier 1, two courses in tier 2, 3 or more courses in tier 3, and so on.
You can offer a range of monetization models to your customers so that they can opt for the one as per their requirements.
Pricing your online courses may sound easier than it actually is and the above guide will help you set up the proper pricing for your online courses. However, you need to regularly revise your online courses pricing structure based on your changing budget, investments, market trends, and other factors.
To get started with, you need to opt for a proper eLearning platform provider that lets you easily implement your pricing strategies or lets you set up various monetization models. Muvi, an all-in-one OTT platform provider, offers a dedicated eLearning solution that not only lets you set up pricing for your online courses easily, but offers a lot of competitive advantages such as own branded app and website launching, easy LMS integrations, content partners portal, and courses live streaming, to name a few. Take a 14-day free trial today to learn more (no credit card needed).