Are you creating new eLearning courses to provide value to members and bring in revenue for your association’s learning business? If so, you’ve probably encountered the challenge of how to price those courses.
Pricing them too high may deter members from investing. But, pricing them too low will prevent your team from making meaningful revenue. Where is the middle ground?
At Web Courseworks, we provide professional services to help associations like yours position your learning business for success. We’ve found that many considerations go into pricing eLearning courses, from the cost of creating a course to its value. We’ve created this guide to help you understand the various ways you can price your eLearning courses and the pros and cons of each.
You’ll explore eLearning pricing models through the following points:
- How To Price Your Online Course: Key Considerations
- Pricing Strategy for Training Courses: Subscription vs. One-Time Fee
- 5 eLearning Pricing Models for Your Courses
Would your association be better served by a subscription-based model or a one-time fee model? Perhaps an entirely free model or a per-course model? Let’s dive in to find out.
How To Price Your Online Course: Key Considerations
Pricing eLearning courses is a pervasive challenge for modern associations. From pricing individual courses to how overall pricing is structured, there are a variety of directions to take this.
It’s especially important considering education is the short game; increasing membership through retention and recruitment is the end goal. eLearning draws members in and provides the value that allows you to grow your membership and retain those learners over time. If your pricing doesn’t align with the value these members get from your courses, your educational programming can hamper membership growth.
If you have existing eLearning programming, you can use price anchoring— the practice of comparing your new courses to existing courses and pricing them accordingly— to set a starting point for these considerations.
However, if you’re just starting, you’ll have to take a deeper dive into the costs and perceived value of your courses to set pricing. And, you’ll want to do this early in the game (as soon as you’ve developed the concept of your first course), to ensure the course you build and the price you set is in lockstep throughout the process.
With that in mind, let’s walk through three considerations to keep in mind when pricing your online courses.
Creation Costs: What is the cost of online course development?
Developing a new eLearning course isn’t as simple as one employee sitting at a computer, authoring a PowerPoint slide, and calling it a day. Courses can range from a live presentation with a subject matter expert to a virtual simulation or scenario-based learning experience, a comprehensive multi-module and multi-assessment course, or even a course that ends with the learner walking away with a coveted certification.
These high-value courses can come with high development costs as well, requiring a variety of team members such as:
- eLearning Consultants
- Subject Matter Experts
For example, a recorded live webinar that’s repackaged and sold as an on-demand course would have a lower development cost while a comprehensive virtual learning simulation would be more expensive. These experiences should then be priced accordingly.
Administrative Costs: How much does an LMS cost?
Creating courses isn’t the only cost associated with providing eLearning to your team— you’ll also need to pay your team to administer the programming and pay for your learning management system (LMS) to deliver the courses to members.
When pricing your eLearning courses, consider the cost of:
- Your LMS. This is especially important to consider if you invest in a comprehensive LMS. While more comprehensive solutions will decrease the administrative burden on your team and provide for a more impactful experience for learners, they can cost more than simple, straightforward solutions.
- Team time and resources. Who will be responsible for interacting with your LMS? Marketing the new course? Creating collateral about the course? Managing the process of creating the course? You’ll compensate those team members for their time and energy.
- Consultants or LMS administrators. If you choose to invest in professional learning business services, which could include subject matter expert (SME) management and LMS administration, you’ll need to consider the cost of hiring those eLearning professionals.
- Any other association software. Your eLearning programming doesn’t exist in a vacuum. For example, data from your courses will need to be logged in your AMS to provide a comprehensive picture of participation. Include these costs in your pricing considerations as well.
You’ll want to consider these costs when pricing your new (or upgraded) eLearning courses to ensure you’re able to cover the costs and bring in revenue.
Perceived Value: What is the anticipated demand for the course?
Last but not least, consider what the members of your association will be willing to pay for a course. This perceived value can be lower for courses that are:
- More generic or not comprehensive.
- Extremely limited or otherwise not applicable to many members.
- Not backed by subject matter expertise.
- Easily replaced with free or lower-cost alternatives.
So for example, a more casual webinar or live chat that’s recorded and available on-demand might be seen as having a lower value. More than likely, however, the high-quality eLearning courses your team creates will fall outside of these low-value categories. This makes the conversation more nuanced and requires additional research from your team to determine how high you can price courses successfully.
You can research this in a variety of ways, whether through surveying members, running a focus group, or even seeing how other associations price courses with a similar level of complexity and comprehensiveness. The key is to consider what your members value— what do they care about? How do your courses address that?
Pricing Strategy for Training Courses: Subscription vs. One-Time-Fee
While we’re going to cover five specific eLearning pricing models shortly, let’s first discuss the two overarching categories that these models fall into subscription models and one-time fee models.
Subscription models, also called membership-based models, describe those in which members receive access to your entire eLearning library in exchange for a monthly, quarterly, or even annual fee. On the other hand, one-time fee models describe those in which members purchase courses a-la-carte, as needed.
This Web Courseworks guide breaks down the differences in detail, but let’s walk through a high-level overview here to set a strong foundation for the five models we’re about to cover:
- The subscription model allows you to better predict what the monthly or annual revenue from your eLearning programming will be. It allows members to access a wide breadth of eLearning courses at a lower cost. Because of that, it’s also better suited for simpler content, such as webinars, rather than comprehensive, complex courses.
- The one-time fee model provides your team will instant, however less predictable, revenue. It allows you to see which courses are in the highest demand to replicate them down the line, and members can purchase only those that interest them most. This is ideal for high-value courses as you can increase the price of courses as the demand increases. However, the downside to this model is that it can be a time-consuming and complex process to determine the pricing of individual courses.
Each of the five pricing models we’re about to discuss falls into one of these two categories. So, while exploring the models, keep in mind whether the subscription or one-time fee variation would best fit your learning business strategy.
5 eLearning Pricing Models for Your Courses
There are five main eLearning pricing models that you can incorporate into your association’s learning business. We’re going to cover what each model entails, how they compare, and instances in which each would apply to your association.
The graphic below provides a summary of each model:
Free Pricing Model
Under the free pricing model, courses are either entirely free for all to access or otherwise included as part of your members’ annual dues. When a member joins your association, they’re able to access your LMS and all of the courses within it at no additional cost. Here’s how the free pricing model compares to other pricing models:
- Pros: Free courses act as a great lead capture tool for professional associations. When you provide continuing education for free, you increase membership, member satisfaction, and revenue as professionals will be drawn to the built-in opportunity.
- Cons: It’s not sustainable to run a learning business that doesn’t generate any revenue. If you’re unable to monetize eLearning through another avenue, the free pricing model can turn your programming into a cost center.
Because the individual courses you provide through the free pricing model yield no revenue for your team, it’s especially crucial to invest in an LMS solution that can generate non-dues revenue for your association in other ways. This could mean hosting virtual events, selling tickets to subject matter expert-led discussions, facilitating complex certifications, or including introductory courses for free and charging for more advanced continuing education (CE) opportunities.
Membership Pricing Model
The membership pricing model is a subscription-based model in which members pay a recurring subscription fee to access all courses. Members who want to invest in their continuing education can opt in to pay for courses, while those that had other motivations for joining your association (such as networking) can opt out.
Here’s how the membership pricing model compares:
- Pros: This model provides a regular, recurring revenue stream for your associations. You can make plans around this regular revenue stream, trusting that it will only have slight fluctuations month-to-month (such as members subscribing or canceling their subscriptions).
- Cons: If you plan to release an especially high-value course, such as complex training leading up to a certification exam, the subscription model could undervalue those courses. This could result in less revenue for that high-value course when compared to a per-course pricing model.
The membership pricing model is the most straightforward way to price your eLearning courses and still bring in much-needed revenue.
Members-Only Pricing Model
Through the members-only pricing model, both members of your association and external professionals can access your eLearning courses. However, members are provided with discounts and value-add opportunities such as first-look registration, while non-members pay a higher price point. This higher price point subsidizes the lower price point that members pay, so you don’t lose revenue through the model.
Here’s how the members-only pricing model stacks up compared to others:
- Pros: Because all learners need to purchase or pay to register for courses, you bring in revenue through this model. Further, by allowing non-members to participate, you can both increase participation in courses and attract new members to your association itself.
- Cons: As non-members experience some of the benefits associated with membership— the eLearning courses— you may deter would-be members from joining your association. Plus, providing courses to both members and non-members at different price points is a more complicated administrative ask for your team.
The members-only pricing model is good for organizations that are looking to increase participation in their eLearning programming, even if it means including learners outside of their membership. That said, it’s important to take caution when discounting membership courses. According to our interview with Dr. Michael Tatonetti on the Managing eLearning Podcast, discounting courses can cut into your profit margins more than you’d think.
If you’re apprehensive at the thought of cutting into your profit margins with steep discounts, a good alternative is thinking of areas where you can provide additional value. For example, members and non-members pay the same price, but members receive additional value through an included workbook, on-demand playback, or extended sessions.
Pay-Per-Course Pricing Model
Under the pay-per-course model, individual members purchase courses as they choose. This type of a-la-carte pricing is perfect for higher-value, complex courses, such as virtual simulations, scenario-based learning, comprehensive multi-module learning, and blended learning experiences where the speaker is in high demand.
Here’s how the pay-per-course pricing model compares:
- Pros: This model provides immediate revenue for your organization when a member makes a purchase. You can see which courses are purchased and use that information to forecast demand, enhance popular courses, or create similar experiences to provide proven value.
- Cons: This model is less predictable than subscription-based models. Plus, determining the pricing for each course can be a time-consuming and challenging process.
Of the eLearning pricing models, the pay-per-course model gives your team a lot of flexibility when it comes to pricing courses. For example, you can include add-ons, such as setting one price for the live course and an additional, discounted price to add on the ability to stream the course on-demand for 30-days after the live experience.
Pay-Per-User Pricing Model
The pay-per-user pricing model is applicable for trade associations that are selling courses via an extended enterprise LMS. In this case, the member organization can purchase courses and pay for them according to the number of members that register.
Here’s how the pay-per-user pricing model compares:
- Pros: Member organizations may be more tempted to register for the course when they’re able to pay by usage, rather than pay a set price regardless of how many users will participate. This is one instance where bundling and group discounts may be applied, as you can offer member organizations a slight discount depending on the number of user seats they purchase. This can increase registrations as well.
- Cons: This is a more complicated pricing model and results in a scenario where various member organizations pay different amounts.
A pay-per-user model relies on the ability of your extended enterprise LMS to facilitate bulk seat registration. This allows member organizations to register multiple users for a course at once and purchase seats as needed.
Choosing the Right eLearning Pricing Model For Your Courses
The eLearning pricing model you choose depends on a variety of factors, from the preparation required to bring a course to life, the information included within that course, and even the administrative lift on your team’s shoulders to provide that course to members. You may choose a singular pricing model or a combination of a few. For example, a membership-based model for the majority of your courses mixed with a per-course model to price extremely high-value courses accordingly.
We recommend working with learning business professionals, such as the team at Web Courseworks, to ensure you’re pricing courses in a way that’s both reasonable for members and profitable for your organization. To learn more about Web Courseworks’ professional services and how we can help elevate your learning business, contact us today.
To further position your learning business for success, explore the following additional resources:
- Pricing Strategies for Associations with Dr. Michael Tatonetti. In this episode of the Managing eLearning Podcast, listen to Web Courseworks CEO Dr. Jon Aleckson and Dr. Michael Tatonetti discuss eLearning pricing strategies.
- Software for Associations | 15 Platforms to Consider. Association eLearning is powered by software. Explore the tech tools that your organization needs as well as the top providers of each.
- Virtual Events for Associations: Your Guide to Going Digital. Many organizations took events to the digital sphere in 2020, and that trend isn’t changing anytime soon. Explore this guide for top tips for your next virtual or hybrid event.