Everyone has opinions about pricing your online course
When it comes to pricing your online course, you'll find few topics more discussed online. I get it, and I know it. So I'm not going to try to give you a definitive answer to what you should charge. Instead, I want to share a couple of frameworks that may help you.
Also, if you haven't read the other posts in this series, here they are:
- Who should build an online course
- How do come up with an idea for your online course
- How to structure your online course
- All the pre-requisites before you launch
And today we're looking at packages and pricing before we dig into the production details (video, lighting, etc.).
Let's skip the free & low priced discussion
If you're a longtime reader, you know I'm not a big fan of free or low-priced anything. If you're going to create something of value, you should charge for it. And the research on free or low priced courses has been done by others.
For example, ConvertKit highlighted a Teachable report that shows free courses have a much lower completion rate than those where customers paid – 9% compared to 36%!
- It makes you lazy with your marketing
- You can’t afford to advertise your course
- You degrade your course’s perceived value
- Competing on price is a race to the bottom
- It takes just as much effort to sell a low priced course
- Lower prices attract lower quality customers
Both articles, from ConvertKit and Thinkific, are great reads – so I think we can just agree to skip the free & low priced discussion.
How many plans should you offer?
When I talk with folks who are right where you are – thinking about their online course and thinking about pricing – they always start with a lower price than I think is a good call.
Reminder: your own insecurities are going to be your largest hurdle in this whole effort. It's ok to admit it and that's why talking with someone else, just about anyone else, will help you get some perspective.
As a result of this, I normally recommend that we take your initial number – let's say it's $99 – and we make that package one.
See what I did there?
I didn't debate you on your weak pricing. I didn't try to debate you. Instead I simply moved the goal posts.
My assumptive close was to re-focus us on having multiple plans, rather than fighting you to charge more.
But how many plans should you offer?
There's a great story about some folks who offered two plans for their course – $600 and $1200. Then they added a third plan, and made the starter plan $600, the standard plan $1200, and the complete plan $2400.
They moved some of the extras from the standard plan to the complete plan, and added some additional bonus material to the complete plan – their core course didn't change at all.
And the result? Here's what they reported,
“49% bought at the low price ($600), 27% bought at the 49 middle price ($1,200), and 24% bought at the high price ($2,400).”
How many plans should you offer? My answer is three.
Sure you could pick four, five or six. But I think you'll soon discover a different challenge – analysis paralysis. You don't want so many offers that people freeze.
How do you decide what goes into each plan?
As you work on pricing your online course, I think you notice the actual number isn't as hard as this other work. Creating plans or packages is the hard work.
Because in all three plans, you're still offering the same core course. The pricing plans should drive you to think more about your customer and their goals.
Here's where a quick framework can help you.
- Some people just want information – $
- Other people want instructions – $$
- A few folks want impact – $$$
Think about the things you've tried to learn online. Sometimes you want information (like a course on humor). Other times you want specific information to make you better (how to deliver a presentation that entertains audiences). And then there are the cases when you're looking for transformation (how to become a public speaker and charge for your presentations).
What this framework does is push you to think about what else you need to add to your course to deliver on the results people want. Your information will be valuable – and needed in all three of your plans. But you'll need more than just information for your second and third packages.
Some ideas to help with your extras:
- More than a single seat (allow a customer to bring a friend)
- Groups or cohorts that learn together and provide feedback
- Q&A sessions with the instructor or special guests
- Additional in-depth material / extras that handle edge cases
All of these and more ideas can be used to create your multiple packages.
Ok, but can we talk about the actual price?
I've written so much about pricing already that I'm guessing you've heard me talk about pricing speed bumps before, right?
When you're driving in a parking lot, they want you to slow down, so what do they do? They put speed bumps in the parking lot. And because you don't want to ruin your suspension, what do you do? You slow down.
When it comes to the psychology of pricing and decision making, we know that there are some numbers that cause us to slow down and consider our purchase.
This is the second framework I want to introduce you to, if you don't already have something like this. It's my online course pricing speed bumps.
When I think about pricing, I don't pick a lot of numbers under these prices, because I know I can move to this number and it won't dramatically change the conversion rate.
Think about it yourself.
You see something for $83. You see something for $87. You see something for $93.
Do you feel any pause for any of those numbers? Nope. But if I show you something at $115, you're likely going to pause, compared to those other prices, right?
There's a speed bump at $100. Another at $200. Another at $500. And again at $1000. Plus another at $2000.
So if I want to eliminate the pause, what price points do I suggest?
And since you only have to pick 3 for the plans we talked about, pick the one that you were most comfortable with (like that $97) and then use the next two above it.
Started at $197, then create package two at $497 and the third at $997.
Wait, are you freaking out about pricing your online course?
Maybe you just read that last part and freaked out. Especially if the third package is 5x the price of the first.
You're going to want to lower the price. Don't.
Instead, think about the extras I referenced above that can help people with the impact they want.
And my last word (for this article) is simply this – try it.
See if people buy it.
I'm positive you'll be shocked. You can thank me later.