One of the common questions I often get asked when people are building online courses is –What price do I sell my course for? Unfortunately, there is no magic formula or simple one size fits all solution. There are a number of factors to consider when pricing your course.
These factors outlined in our PRICE model look at:
- Course Length
The first factor to consider is profit. This is about starting with the end in mind. Starting with an idea of the profit that you want to achieve and working backward from there.
So, step one is to understand your profit target. The period for your profit target could be anything – a day, a month, a quarter, or a year. The period doesn’t matter as the calculations we do remain the same.
For example, if you have a profit target of $12,000 and a proposed price of $1,000 for your program, then 12 sales are required to reach the profit target.
It is at this point it’s important to define your metrics. Now 12 sales might not sound too daunting (and it might not be), but you need to understand two key metrics. They are the:
- Sales to leads conversion ratio – this is the number of leads that you need to put your offer in front of to get the desired sales.
- Leads to reach conversion ratio – the number of people you need to reach to generate the required volume of leads.
For example, if your sales to leads ratio are one percent and your leads to reach conversion ratio is ten percent then you would need to generate 1200 leads to hit the 12 sales required, which would mean you need to reach 12,000 people.
So now you can consider the realities of this price, the number of enrolments, and, subsequently, the leads you need to generate. This is the point where you can then revise the course price, based on the ease or difficulty of the leads and the reach required.
The second factor to consider is the results. What are the results that your learning program is going to deliver for the participants? What is the value of those results?
If it’s just a simple set and forget information delivery course, then it probably doesn’t provide a huge amount of value. But if you have a course and people are implementing what you are telling them to do, consider the impact of that knowledge that you are sharing. Consider if you are providing ten times return value on the cost price.
For example, is your $1,000 course going to help people generate $10,000 in sales or savings?
With the value, consider everything that you are bundling into the package. The course, coaching, virtual events, tools, and templates. A bigger course package can provide more value and can command a higher price.
The third factor to consider is your involvement. If you are just building a simple set and forget course, where people enroll, go through the course at their own pace, and have little involvement in it, then you are probably going to sell at a lower price. Alternatively, if your course is going to require a large amount of your time (for example weekly coaching sessions, individual coaching sessions, being engaged in discussions, being available for questioning and commenting) then you would factor in the cost of your time into the course as part of that value.
The fourth factor in the price model is to consider the length of the course. A short course length equates to low dollars, while a long course length equals higher dollars. You are also going to find that a larger course length, something that’s spaced out over time, is going to give more people opportunities to implement or integrate, which will provide more value and is probably going to have you more involved.
The fifth factor to consider is your expertise and the perception around you as the expert. If we look at the branding of cars, such as BMW against Kia. BMW is perceived as being a higher-quality car. Therefore, they are charging more for the price. The same with people. Are you perceived as a person of influence, someone who is an expert in your industry? If you are, then you could charge more based on your reputation.
This article is an extract from our soon-to-be-released book Leverage Your Expertise, so keep an eye out for details of the launch.