In addition to the blood, sweat, and tears that you have invested in your custom elearning development; you’ve also spent years of classroom delivery to honing your curriculum that you are now converting to elearning. No doubt it would be prohibitively expensive if you priced it based on the hours you have invested. Nevertheless, all of these need be considered in order to remain both competitive and profitable.
With that in mind, deciding on pricing for your elearning content can be a tricky exercise.
Various market forces and laws of economics are at play:
- Supply and Demand
- Return On Investment (ROI)
- Price Elasticity
- Fulfillment Models
If you have followed elearning pricing over the past few years, you will have noticed it has steadily, though not dramatically, declined. There are two drivers at play:
- Increased competition as more learning professionals enter the market, and
- Technology-driven reductions in the cost of course storage and delivery
Important Questions To Ask
Fortunately, growing demand has and will continue to bolster pricing but it is critical that you have a sound pricing strategy to benefit from a vague market.
Here are 10 questions to ask yourself before pricing your courses.
- What are your competitors charging for elearning similar to yours in content, complexity, and duration? Are there a lot of competitors in your particular area of expertise?
- How much have you invested to produce the course? This includes your effort x your going rate plus the cost to have your course built. Add in any royalty costs incurred for reuse of proprietary material.
- What is your estimated market size? Is it niche or industry specific content or a generic corporate product such as selling skills or leadership training that applies across industries?
- Is your elearning course stand-alone or is it part of a blended training solution? If the latter, a combined price will be needed.
- Does your elearning course include supplemental materials such as workbooks, DVDs, or guidebooks? The cost of these items will need to be factored in along with fulfilment charges e.g. postage or courier charges.
- What is the cost of course delivery? LMS solutions have hosting and bandwidth charges in some form.
- Is your courseware frequently updated? Perhaps a subscription pricing model that includes automatic versioning upgrades is best for your clients.
- Will your content be offered in packages or bundles as well as individually? Be mindful of undercutting yourself.
- How is your brand recognition? Are you well-known for a quality product? Is your content known and trusted? If so, you can afford to charge a premium for your courseware.
- What are your sales projections? If you forecast high volume, profit margin per unit can be reduced.
One Last Important Point
Be sure to maintain administrative control of your online shopping cart. It gives you the ability to change your pricing in real time. You may want to adjust your pricing based on what you see happening in the marketplace or offer a limited time sell-off. Whatever the reason, responding quickly is always of benefit.
Ecommerce integration with your learning management system is an important feature to look for. There are many other features within an LMS that can also help you. Download our free ebook, What’s The Difference Between An LMS And An LCMS? to learn about the others.