While there are numerous pricing models used in the world of eLearning and online courses today, two of the most common are subscription and one-time-fee models. By considering the advantages (and potential drawbacks) of each and taking your association’s unique needs into account, you can ultimately make the best decision. And remember: it’s important to get this right the first time around, as changing up your pricing model down-the-road can pose its own major challenges.
[icon name=”money” class=”” unprefixed_class=””] Subscription Models
With a subscription or membership-based pricing model, you provide all paying members with unlimited access to all of your eLearning materials in exchange for a monthly, annual, or other ongoing fee. One of the main advantages to implementing this type of pricing model is that once subscriptions start rolling in, you’ll be able to better predict what your monthly or annual revenue on the materials will be. Additionally, this pricing model offers members with a low-cost way to gain access to the eLearning materials they want—especially if you offer a monthly subscription.
Subscription models work best at the bottom end of the product quality continuum. For example, selling recorded webinars is ideal for subscription pricing because the entire package of webinars has more perceived value than individually priced webinars. In any case, the recorded webinar should be enhanced with pre and post-tests, learning objectives, and a “level one” evaluation. Consider upping the quality with the use of authoring software like Camtasia or H5P to allow for a quick edit of the webinar and inclusion of embedded questions and games. This might also lead to repackaging webinars into ten-minute micro-learning segments.
Subscription models work best at the bottom end of the product quality continuum.
One of the potential challenges of a subscription-based model is that, depending on your industry, it can be difficult to convince people to make the commitment to paying for your service for months or even a full year at a time. Furthermore, if you have members who are only interested in some of your materials, they may be less likely to buy into a subscription model that requires them to pay for access to everything. Consider offering a “free access” trial period and take credit card with the policy that the subscription can be cancelled with 30-day notice.
[icon name=”money” class=”” unprefixed_class=””] One-Time-Fee Models
With a one-time-fee model, your set-up is a little more à la carte, allowing members to pay a single fee to access each set of materials (or individual courses) in which they’re interested. One of the biggest advantages to this set-up for your organization is that it provides you with instant revenue when a member makes a purchase. Furthermore, this type of model allows you to gain better insight into which materials are the most in-demand and which could use some improvement. Members also get to enjoy the freedom that comes with being able to pick and choose which materials they wish to pay for and not having to make a long-term commitment, as they would with a subscription service.
On the other hand, with one-time-fee models, determining the specific pricing for each individual course or eLearning material can be challenging and time-consuming. And of course, overpricing anything can lead to a complete lack of interest or could even tarnish your association’s reputation with members/potential members.
One-Time-Fee should be the first pricing option for higher quality courses. Individual pricing should be reserved for courses that feature “in demand” topics or speakers. Examples of high quality courses include:
- Virtual simulations—see ASA’s virtual anesthesia experience
- Scenario-based learning exercises that require the learner make a choice based on a real world situation
- Comprehensive on-demand experiences that contain multiple modules and assessments
- Blended learning where the kick-off and end workshop are held live at industry conferences but where most of the content is delivered asynchronous
- The speaker is in high demand or has recently written a book
One-Time-Fee should be the first pricing option for higher quality courses.
Now that you have a better understanding of the main differences between these two popular pricing models, how can you determine which is best for your organization?
Quality & Creation Costs
You might consider starting with the creation costs involved in preparing and maintaining your eLearning materials. This will help you get a better idea of how much you’ll need to sell in order to avoid losing money. This, in turn, can help guide you towards a pricing model that best suits your needs. For example, if you need more immediate revenue to make up for creation costs, then a one-time-fee model may make more sense for your organization. At the very least, this gives you a one-page revenue analysis of income vs. cost. Use it to control management and board expectations.
On the other hand, many businesses take a short-term loss for expected long term gain. The long-term gain should be supported be member and market surveys. Giving away product has been a successful strategy of Internet companies.
To reduce risk consider sharing authoring and development costs and a small percentage of income with a subject matter expert of notoriety. Don’t forget you are in the publishing business.
Knowing your audience and their anticipated demand for your eLearning materials will also go a long way in deciding on a pricing strategy. Think about the types of people who would be most likely to find your eLearning materials useful. Based on your research, will they be more likely to commit to a subscription service or would they prefer one-time payments? If it’s possible with your budget, running a small focus group could be a great way to get to the bottom of this question.
When you first started creating your eLearning materials, you probably didn’t anticipate that deciding on a pricing model would be such an important decision for your organization. However, this decision can ultimately have a huge impact on the success of your eLearning materials, so be sure to put as much research and consideration into it as possible.