The average cost of vocational school training in the US is around $33,000 that prepares you with practical skills for a specific profession.
Online courses are in no way inferior to regular courses in imparting education, value, and skills.
These are interactive filled with videos, assignments, downloadable material, giving the enriching experience to the student.
The online courses are transforming people from what they were before taking the course and what they are now after going through the course.
As a creator you should derive the right price of your online course to do justice with it.
Psychology of mind
You are a first-timer, and If I tell you,
"Create an online course of your interest and price it.”
Most of you will price it around $20, $30 or $50
This psychology of the mind is stopping you from growing and realizing the true value of the course.
How to get out of low price mind-block?
Let us recall the line:
“Create an online course of your INTEREST”
When you are creating something of your interest then how it could be possible that it will be of low quality, less valuable, and will not be liked by the people?
The same is the case with the Online course, you are creating it because you have an interest in that particular subject.
For example, you are a nutritionist and want to create an online course on:
“How to maintain a healthy lifestyle by eating the right food?”
I’m sure you know many techniques and tips that can give desired results.
It might be possible that being a first-timer, you don’t have the right equipment or gadgets for making the course but it no case it is of low value.
"The food cooked in an old pressure cooker in a small kitchen is no way inferior in taste to the same food prepared in in the kitchen of 5-start hotel."
It is your interest, passion, and knowledge that adds value and quality to the product or to be more precise to the online course.
How to ignite these feelings?
If I say, “create an online course of your interest and you’re going to sell it at $200, $300, $500 or $1,000 in the market”
What would be your reaction?
You would be surprised and excited.
It’s true that Passion, Interest, and Knowledge are indeed the inherent characteristics of an individual but adding a good monetary value can boost them to the next level.
"Premium pricing gives a boost to your interest, knowledge, and passion."
When you know that you’re going to get a good price of your online course, you will infuse more energy in making it and it’s worth is going to beyond comparison among all the courses, of the same category, available in the market.
Why people use airplanes and pay many times more when they can reach their destination with bicycles or bullock carts?
Both airplanes and bicycles will get you to the destination but it is the journey that matters most.
People buy speed, comfort and convenience.
The same holds with your online course.
When they see the value attached to the result-oriented online course, they are ready to pay the price that you have set.
Always keep this strong feeling in mind that you are creating something valuable which is going to make the lives of the people more comfortable.
Problems with low pricing
First, people will be excited to know that the course is available at such a low price.
But the next moment, the feeling of doubt about its quality will take-over.
They will question themselves:
They already have made up their minds that the quality is low and it is not going to add value in their lives even before purchasing your course.
And you know, it is very difficult to change the perception once it is made.
"The cheap pricing instead of generating sales, creates a barrier of doubt in the minds of the prospective buyers."
More non-serious candidates
With low pricing you are going to attract more non-serious candidates who will never actually complete the course.
This will impact the service time of the serious ones and eventually you will lose them too.
Let us understand with the help of an example:
You priced your online course at $30 with a 2-hours’ weekly session for queries.
Further, assume that 40 candidates bought the course and out of which 30 are non-serious and 10 candidates are serious about taking the course.
Your 2-hours’ time is going to be divided equally into 40 parts.
The non-serious candidates will hardly care about the query session while the serious candidates, who wanted to add value through your course, found time devoted to them wasn’t sufficient for addressing their queries.
With this less attention time, they will lose their taste for learning and your course’s actual motive of adding value to the buyers goes in vain.
Remember, when a serious customer is happy, he will give more referrals and this means more sales
In the long run, it will affect your brand value and you will not be able to scale your online business.
You cannot market your course with low pricing
Creating an online course is only half work done.
To sell it, you need to take some time daily and market it on various platforms.
Let us understand with the help of an example:
You have priced your precious online course at $30 and now you are spending 20 hours per month on marketing it.
Your efforts bore fruit and you sold 10 copies in the first month of launching, it means $30 x 10 = $ 300 of sales
Let us say that the average working rate per hour is $25.
You spent 20 hours in the first month of launching.
It means your expenditure is $ 25 x 20 = $ 500 in 1 month.
Now, you can compare yourself.
It is a loss of $300 - $500 = ($200)
You end up making losses that you don’t even know unless you rationally evaluate things like I did in front of you.
So, this is the problem with low pricing.
Instead, you priced your course $100 and sold even fewer copies say 6 in numbers, sale of 6 x $100 = $600. Keep the marketing efforts the same that is $500.
Are you still at loss?
Come on, you made a profit of $100 in the first month of launching.
You can see that even selling fewer copies you made a profit because you rightly priced the course.
Is selling at a lower price is always a bad idea?
The costing approach
In this technique, you price the course based on different costs incurred in making it and adding them all to get the price of the course.
Like you add:
Let me give you the excel sheet to calculate the price of the course using the costing method.
You can also monetize your knowledge and experience while calculating the price of the course.
The Market Approach
In this approach you look into the market to derive the price of your course.
Follow these steps:
The price of your course is:
Let us further assume that your experience in the industry is 2 years.
And the price of your course would be using Market Approach is =
The Value Approach
In this type of technique, you derive the price of the course based on value addition or the cost-saving to the candidates.
For example, Mr X has made an online solar course
“Design the complete Home Solar Power System and know its financial feasibility”
He priced it at $200.
How did he derive this price?
The average cost of 5 kW home solar power system is around $16000
Mr. X thinks that the candidates after going through the course are most likely to save 10-15% of the total cost of the home solar power system that is they can save somewhere between $1600 - $2400.
And people don’t mind paying 10% or less (for the course) of what they are going to save after going through the course.
This is the basis of his pricing using Value Approach.
You should see how your course is going to add value in a candidate’s life and career.
If after going through your course, the candidate acquires new skill that can likely to give a boost to his career to the next level say a 10% hike in his annual salary.
He won’t mind paying a fraction like (10% or 15%) of this hike.
In this approach, initially you keep the price low and increase it gradually by a small percentage say 10% month on month until you feel the resistance and your sales start dropping.
This resistance price is the right price for the course.
The size of the problem approach
This approach derives the price by quantifying the size of the problem solved by your course.
The problems can be broadly classified into 3 categories, namely:
In small problems, you provide solutions that have an effect limited to few persons and are short-lived.
For example, an online course on “How to get a haircut that suits your face?” has its effect limited to one person because others cannot derive any tangible benefits from a person who has got that haircut.
Moreover, the benefit is short-lived with the person, you need a second haircut after 2 or 3 months.
You can price it under $100 but it should be above $50.
In the solutions to the mid-sized problem, benefits are spread over more people and its effect remains for a longer time.
For example, an online course on “How to get your first job?” solves a mid-sized problem that involves a person, his career, and the dependents.
You can price it in between $200 to $500 depending on your knowledge and the practical experience in that industry.
Whereas courses dealing with big problems need to be pricing accordingly because their solutions have a wider impact.
For example, an online course on “How to revive your business and make it profitable?” is dealing with a big problem.
The solution is going to impact the lives of many employees and their families.
These courses are priced over $500 and can go up to $3000.
So, you can categorize your course according to this approach.
The price demarcation is general when you add a greater number of services with the course, the price can go up accordingly.
Monetary goal approach
Some people price the course that helps them in achieving their financial goals.
For example, you aim for earning $10,000 in a year from the sales of your course.
And you have 500 subscribers in your e-mail list.
How to price your course that you achieve your target in the given time?
Let us draw a table:
You can see that when you keep the price low, you need high conversion rates to meet your target.
When the price is $50 then you need to sell to 200 subscribers out of a total of 500 to achieve your target.
As you increase the price of the course, you achieve your target despite low conversion rates.
You can see that price options 3& 4 that are $200 and $500 with conversion rates 10% and 4% respectively are quite acceptable and achievable.
So, you can price your course between $200 to $500.
In this approach of pricing you choose that price in which the conversion rates are achievable.
Tips for premium pricing
Teach something very specific
The content of your online course should be very specific because general content and topics are washed very quickly.
For example, you are a housewife who knows cooking very well and is very motivated to create a course on it.
Don’t create a course like How to do the cooking? Or How to prepare great food?
These are very general terms.
Rather create like:
to make your course topic and it’s content more specific.
Because specific things look different and unique and people value unique things and are ready to pay high prices for that.
Create a result-oriented Course
Tell your viewers that you can achieve the goal in a given time when you go through the course.
Like "learn 10 Home-made South Indian Recipes in 7 days"
When you create a time-bound and result-oriented course, the people get excited to learn and get impulsive to buy the course at the premium price that you set.
Live calls 1 to 1
You can offer 1 to 1 live call to your buyers to solve their queries. This kind of personalized service creates confidence in the course and gives a kind of relief in the mind buyers that their query will be addressed suitably.
Offer different plans with different prices.
One is a basic plan in which you include all the essential features while the premium plan offers more customized services like giving extra time to solve the queries through video calling or access to some of your premium material etc.
Offering different bonus materials like E-books, PDF, Assignments, Quizzes, Excel sheet increases the overall value and hence the price of the course. This makes the course more engaging and gives enriching experience.
The material which is relevant today might not be the same in the next 1 or 2 years. The same is the case with the content of your course, some of it will get outdated.
Therefore, you need to keep updating the course content, making it fresh, latest, and relevant forever.
And the customer always pays for the fresh product.
Benefits of premium pricing
The direct benefit of premium pricing is that non-serious candidates are out.
The candidates who are serious about learning will buy your course.
This will not only increase the value of the course but also you can devote more time to each candidate in handling her/his queries.
In this way, you can make them learn better.
The candidates will be satisfied and happy.
You know happy customers bring more referrals and will bring more sales.
You can attract more business partners or affiliates through the premium pricing of your course.
Because you can offer more monetary value to them if they bring sales through their reference.
Let us understand with the help of an example:
Let us say you are offering a 30% commission to your affiliate for each sale done through her/his reference.
When you price the course at $50, he will get 30% of $50 = $15 as a commission for each sale done.
While on the other hand if your price your course $200, he will get $60 for the same efforts done.
In the latter case, the affiliate will be more excited and motivated to do the sale as he is going to get more value.
So, premium pricing creates an energetic team, accelerating your online business.
Another aspect is the credibility of your online course.
When you offer premium pricing, the visitors will look at your course offering something valuable.
While on the other hand low pricing creates doubts about the course quality in the minds of people.
Look and aim for the place where you can value and can derive the right price your online course.
This place is filled with customers who are ready to buy your course at that price.
Gradually, increase the price of the course and make it premium by offering exclusive services.
This way you further filter out the extremely loyal and serious candidates who are ready to buy the course at any price.
Finally, keep serving those selected candidates.