Tools like Kajabi help you run your online business and sell your online courses. But how do you decide on a price for your course?
Set your price too high and you could lose sales. Set it too low and you could leave money on the table.
In this article we’ll examine the biggest factors that affect pricing and offer 6 tips for coming up with the best price for your online course.
Factors affecting pricing
Let’s look at a few of the most important factors you need to consider when deciding on the right price for your online course.
Your time and experience
Your time and expertise are more important than hard costs when it comes to determining the price of your online course.
How much time did it take to develop the course? How many hours did you spend recording lessons, making worksheets, and creating resources for the course?
Now ask yourself two questions.
- What would you charge a client for that much of your time?
- What did it cost you to learn this?
Did you have to pay for special training or get a degree? How many years did it take you to develop the knowledge or skill you’re now sharing in your course?
Remember, you're not trading dollars for hours. You’re sharing information that’s unique to you and your experience.
The cost to market the course
Don’t forget to account for marketing costs when pricing your course. Marketing a low-priced course may cost you as much as marketing a higher-priced course.
Let’s say you spend $1,000 on ads and get 200 leads for a $50 course. You’ll need a 10 percent conversion rate, or 20 sales, just to break even.
If you price that same course at $200, your break even point is only 5 sales, and your conversion rate only has to be 2.5 percent.
The expected impact on your audience’s lives
When marketing your course, you’re selling an outcome, not a product.
Ask yourself, “How will my audience benefit from this course?”
We’ll discuss this in more detail further on in this article, but remember, your audience is looking for relief from some pain point. That’s where the value is.
How much time will it save them?
One of the factors affecting the value of your course is how much time your students will save by learning from you.
Learning the hard way is inefficient and leads to a lot of mistakes, false starts, and lost resources.
When pricing your course, think about the time your students will save by not having to figure things out on their own.
The type of content in the course
Including multiple assets in your course also increases the value, allowing you to price your course higher.
Videos, workbooks, physical products, and templates are often included to make sure students with different learning styles can learn effectively. But multiple formats and resources can also make people believe you’re giving them more than they paid for.
In his book, Overdeliver, Brain Kurtz states that overdelivering increases perceived value and cuts down on dissatisfaction or complaints.
Understanding course pricing strategy
We’ve covered five factors that influence pricing. Now, to apply those factors to your pricing strategy, you need to evaluate two things:
- The quality of your course
- The purpose of your course
Evaluate the quality of your course
Quality is important, but not for the reasons you might think.
You don’t need professional cameras, graphics or slick advertising for your course to be regarded as high-quality. And you don’t need dozens of hours of instruction.
You only need to deliver the outcome you promised.
A thirty-hour course isn’t automatically more valuable than a ten-hour course.
If the ten-hour course delivers on the promised outcome, the shorter course might actually be more valuable because you saved your students 20 hours.
Determine the purpose of your course
How do you intend to use this course? Will it be an entry-level course, your flagship course, or an advanced-level upsell?
Here are some general suggestions for pricing digital courses depending on how you plan to use them:
- Lead magnets – free
- Introductory or “get to know us” products – $5 to $50
- Mini-courses – $29 to $300
- Flagship courses – $150 to $3,000+
- Advanced training – $2,000 to $5,000+
- Training plus coaching – $3,000 to $10k+
6 tips on how to price your online course
Here are six tips for pricing your online course.
1. Know your market and the pain they want solved
Do enough research to be sure you’re solving a pain point your audience cares about.
Don’t get caught up in what others may be charging for similar courses. That can give you a reference point, but as we discussed above, your course’s value comes from:
- Your unique experience and perspective
- The transformation you deliver
- The quality and purpose of your course
2. Focus on the of the transformation you’ll provide
If your course delivers a measurable transformation, you may be able to charge more for it. Here are some outcomes that people are often willing to pay more for:
- Career advancement
- Higher income potential
- Personal fulfillment
- Improved quality of life
- Better relationships
- Mastery of a new skill or hobby (especially if it makes them look impressive)
3. Calculate your bottom line
How much revenue do you need? Do the math to figure out how many sales you’ll need at different price points.
If your goal is to make $4000 per month and you’re only charging $20 for your course, you’ll need to make 200 sales per month.
If that’s not a realistic conversion rate, set your price higher.
4. Calculate your perceived value
Don’t automatically assume a lower price will mean more sales. A lower price can actually devalue your course, leading to fewer sales.
Evaluate the quality of your course and the improved life quality that you’re offering your students. The higher the quality and the higher the value of your transformation, the higher your price should be.
Tip: Don’t fall into the trap of competing on price. Someone will always be able to undersell you. Instead, focus on the value of your outcome or solution.
5. Budget for marketing
No matter how good a course is, it’s hard to drive sales with organic promotions alone. You’ll likely need to spend $1,000 or more on advertising and other paid promotions.
To cover those expenses, set a price that’s a little higher than your first impulse. Your goal is to absorb those costs, so your profits stay high.
6. Offer payment options
If you’re worried that people won’t be able to afford your course, instead of lowering the price, get creative with your payment options.
Installments – Offering 3 monthly payments of $547 may be more attractive than a one-time payment of $1500. With this strategy, you can offer a discount to students who opt to pay in full.
The ability to pay in installments will tip the scales for some students. The discount will motivate others.
Tiered pricing – Tiered pricing is another alternative to lowering your price. Your basic price may include the course alone, but with each pricing tier you add bonus content or additional resources.
How to know if your price is set correctly?
It’s important to remember that there’s no formula or set standard for pricing an online course. Understand the value you bring to the table and be prepared to test.
If you’re getting traffic but not converting, you know something is off. But don’t immediately assume your price is the problem.
Price should be one of the last things you “fix.” Start by testing:
- Targeting – Do you have the right audience?
- Messaging – Does your messaging address the pain point adequately?
- CTA – Is your call to action strong enough or is it too aggressive?
- Your Offer – Does your offer clearly communicate the outcome you deliver?
Once these elements are dialed in, Kajabi makes it easy to test different pricing.
Kajabi handles payments and lets you offer coupons for specific segments. And with its email marketing segmentation, you can test your offers, your pricing, and more.