How to Price your Online Course or Group Coaching Program7 minute read
How many students do you want to train at once? What level of personal support is needed? Will content be continually updated? What is the value of the result you are providing your students?
Many businesses struggle because they make mistakes pricing their product.
While we can’t tell you exactly what is the right price for your online course or program, we can give you a few recommendations that will hopefully set you on the right path towards the sweet spot of being a no brainer for your potential students, and being an amount that can help you grow a thriving and sustainable business.
While it might sense to price your course lower at the beginning and raise your fee as you fine tune to provide better results for students and add content, it is important to not underprice yourself. Compete with the high quality of your program, not with the lowest price. Don’t give into fear and doubt that stops you from charging what your course is worth.
If you have built your online education program using Heights Platform, then already the potential value you are providing your students is miles above someone simply sending students a PDF or video and giving them access to a facebook group. For most types of mentors, pricing your program at a low amount dollar value like $49, or even anything under $100 is probably a bad idea for three reasons:
- If you put so much effort into building a program that is providing potential life changing results, surely it has more value than $100. Especially given that your program likely includes your personal guidance and review, and an avenue for your students to discuss and learn from each other.
- People don’t buy things because they are cheap, they buy things that they find valuable, or more clearly, people buy things that make them feel better. If your pricing model is to create a course that is so cheap that anyone will buy it on a whim, then in a way, you are doing a disservice to your students because someone that spends $49 on something is not likely to come back to it every day and put the effort into it that is required to reach the result they are looking for.
- If your price is so low that it makes it difficult for you to have money left over to acquire new students and potentially expand and update your course, then you don’t have a sustainable business model. Eventually you will run out of money and not make the impact you could have if you had profit left over to reinvest in expanding your program and acquiring new students.
Now it’s clear why pricing your online course too low can be dangerous, but that still doesn’t quite answer the question of how much you should charge. Below we will run through some numbers that can help provide you a framework to calculate pricing that is much better than pulling numbers from a hat.
One guideline we have to help mentors find if their price is something they can sustain for their business, is to consider — if you were to gain 1000 students over your program’s lifetime, would the price of your course times 1000 be enough for you to make the kind of living you want to make? (See Kevin Kelly’s popular essay on 1000 true fans https://kk.org/thetechnium/1000-true-fans/)
It is best to build your pricing model in a way that doesn’t require your course to be wildly successful to sustain you. Acquiring customers is hard work, and chances are, if you are not already an exceptional veteran digital marketer or course creator, getting 1000 students will not happen in your first year.
What Happens When you Underprice your Course - an Extreme Example
That considered, let’s go back to a price that would be too low and say you charged $49 per student to enroll in your online education program. Let us also assume that even though you don’t have much experience with marketing, that you get a whopping 500 students in your first year. Remember that if you didn’t already have a large audience, then you probably had to spend a decent amount of money to acquire those 500 students. Let’s say that you bought Facebook ads to acquire students and you had a 1% conversion rate, meaning that out of everyone that signed up to your newsletter, your webinar, or your landing page, 1% of those people end up purchasing your courses. Let’s say that those signups cost you about $3.50 each in ad spending. Now if we go by our 1% conversion rate, that means it cost you $350 to get someone to buy your program (You can probably see where this is going). So at the end of the year you sold 500 students your $49 program and made $24,500 before credit card processing fees. However, your cost to acquire those 500 students throughout the year was $350 x 500 or $175,000. Now you end up over $150,000 in the hole, and you are struggling to continue providing value to your students because you can’t sustain yourself. If you are working on your courses part time and an extra $25,000/year is exactly what you are hoping for, then using these same numbers, the price you’d actually have to charge for your course would be $400 ($400x500 sales)-($350x500 ad spend).
If it is your first time selling an online course, make a goal to start off by getting 10 students. For these first 10 students, make sure to personally interact with them more deeply, and ask them questions about where they are still struggling through your content, and what might confuse them. These first 10 students will help you to fine tune your course and to ensure it provides a better result when you start attracting more students. They will show you problems that they have where to you the solution is obvious, but it will help you realize that your content should be adjusted to provide answers to these roadblocks.
After you go through this process, and as you gain more students, your online education program will become a finely tuned machine providing students with great results.
If you are going to take the time to turn your knowledge into a series of courses and optimize them to help your students grow, then it makes sense to create a program that you charge decent money for. Your goal should be to create a program that provides a life changing result to students who go through it, and one that students would pay 10 times over for the value they gained from it, while at the same time, providing you with the ability to be massively successful in your business to continue empowering more students because as your courses evolve, they are able to provide results better and faster than before.
Pricing that Allows you to Thrive and Provide More to your Students
Now let’s go back to the numbers from before. Let’s say that we charge $1000 for our new course. Let’s also say that we’ve gotten better at marketing and used some retargeting ads, grew our newsletter and blog and brought our average cost per student acquisition down to $275. Now if we sell 500 students our program we make ($1000x500 sales)-(275x500 ad spend) or $362,500! Fortunately with a business model like this, the sky is the limit. While numbers like this might not be realistic for everyone, there will be a few that make 10x these numbers! Even if you only sold 150 students in a year, you’ll end up with $108,750 which is a great living in most of the world.
Everyone has a different situation, type of customer and type of content that they are teaching. In general though, the average price range for online courses is between $200 and $3000. What works best for you might take some experimentation, but if their is one point we’d like you to take away from this article, it is to not underprice yourself.
If you’d like to read more about pricing, here is one of my favorite articles about pricing digital products (though it is more focused on software, the same concepts apply to courses) - Joel Spolsky on pricing digital products: https://www.joelonsoftware.com/2004/12/15/camels-and-rubber-duckies/
DISCLAIMER: This article is meant to help mentors gain insight and ideas on how they might price their program. Heights Platform are not making any kind of guarantee that by using our product you will make a certain amount of money. In fact, most people won’t take action to put in the work required to build a successful online program and won’t end up making anything at all. We want to see you and your students succeed, but ultimately, your success is up to you, the effort you put into your business, your skills and other factors.Create Your Online Course Today