How to price your online course is one of the most common questions we hear. While there are a number of factors that can play into this, we’ve developed a basic formula (see below). Here are our thoughts on pricing, and its generally good news for instructors. You deserve to get paid for your knowledge!
Image is a big part of pricing
Just like image is a big part of everything. A big factor in pricing your online course is something called ‘perceived value.’
This is similar to shopping at an electronics store. Typically, there are several different versions of a product produced by multiple companies, with prices ranging from expensive to affordable. Perceived value conveys what the consumer expects from each product.
Generally, the more expensive product is perceived to be better, and to provide more value. Maybe that value comes from the product lasting longer than the cheaper versions. Maybe it comes from having an extra feature that others don’t. Whatever the reason for the higher price, customers generally feel they will have a better experience with a higher priced product.
The same goes for online courses. Do a quick Google search and you’ll likely discover courses similar to yours across a variety of price points. What do you expect to get from the cheapest one? Probably not much.
An advantage you have with online learning is that students are investing their dollar in bettering themselves, and should be willing to spend a reasonable amount of money to do so.
But image isn’t the only reason to charge a higher rate.
Value must go both ways. The student needs to learn your material. As the teacher, you need to present that material; in a creative and engaging manner. But, you also need to make enough money that the work is worth your time, and that scaling the course can provide a generous income for you.
By pricing the course at a level that provides a comfortable return, you are allowing yourself time to improve and re-develop the material over time. You’re giving yourself a marketing budget to attract new students. And, you’re showing students that you are confident in your abilities and material.
Put yourself among good company
By charging a premium rate, you’re automatically putting your course among the best courses available in your niche. There are always going to be frugal students that will sift through the amalgam of free and cheap courses trying to find the information they need. Targeting that group of people isn’t going to help you or them.
A ‘premium rate’ doesn’t mean we’re telling you to rip off your students. Of course, there is a limit to what is reasonable to charge based on what you are providing. But it is important for marketing purposes to have your course classified as top-notch, offering must-have info. As we all know, must-have anything doesn’t come cheap in most circumstances.
In any marketing effort, it is important to emphasize the value a student will get out of the course. Anything that can get this message across is important – testimonials, an introductory video from you explaining how this knowledge changed your life, a free sample document or piece of info sent to newsletter subscribers.
Give them practical examples of what the course will do for them. See our Online Course Marketing 101 article for more on this.
How to price your online course: A basic formula
Think of the course as a per-hour platform. How many hours will it take a student to get from start to finish? Identify an appropriate hourly rate for teaching that material – maybe that’s through web research or looking back at your own teaching experience. Apply that hourly rate to the course.
Then, consider any additional resources, documents, connections, and information a student is getting from your course. Determine a fair market value for each, and at that on top of your hourly rate.
For example: An online course which takes four hours from start to finish, at an hourly rate of $30. Along the way, the student obtains a few downloadble PDFs with hints and graphics. You determine that, based on how long it took you to compile them and how long it takes the student to implement them, each is priced at $20. Upon completion, the student receives a certificate, letter of completion/recommendation, or other resume stamp.
Total value? $200.
While someone else on the internet may offer a course with the same title for $50, consider what it takes to get a student through the course:
- A $100 Facebook ad spend that lands one student. A newsletter blast to your list of 850 email addresses, which you’ve spent a year building, that lands two students. That’s $600 in income, for $100 and a good chunk of your time. This can be replicated and scaled.
- The person charging $50 for their course must do those same things, but is only grossing $150, meaning their net loss is $50 plus all of the time they’ve put into getting to that point.
There are two main reasons online instructors underprice their course:
- They hope to make it easier to market or sell (we’ve already uncovered why this is a bad formula)
- They aren’t confident enough in their material and/or experience
Confidence is a big factor for all of us teaching online. The bottom line is that anything worth signing up for is worth at least $100. Even if your course is shorter, pricing it under $100 is not advised. If you aren’t confident in the material being worth that much, the students you hope to attract will be.
They want to know what you have to teach. You have enough knowledge to put together a course on the topic. That alone is enough value to price it at a rate that is as fair to you as it is to the student.