How much should I charge for my online course? (7 step pricing process)

pressing your online course is one of the most intimidating steps of the course launching process launching course is exciting but trying to choose a price for your course may have you feeling hesitant and uncertain in this video I'm going to take you through a seven step process that will help you price your online course with confidence so you can feel excited to share it with the world let's get into it [Music] hello creators I'm mental sin from podía where we empower creators like you to make a living doing what you love the seven step process I'm about to take you through is not an exact science but is meant to help you zero in on a price you can feel good about and while it's not absolutely necessary to use each of these steps the more you let them build on one another the more confident you'll feel when choosing a price for your online course in this video we're going to assume your goal is to find a price that maximizes your earning potential while still being competitive enough to attract lots of customers let's get started step number one gather course pricing data this step is going to take the median price of online courses and give you an average range to work with the more data you gather the more accurate this range will be there are a couple of ways you can do this first you can go to websites where online courses are sold like udemy or teachable and send a message asking for their course sales data most course platforms maintain this data for their own purposes and you might be surprised to find them willing to share that information with you second you can browse online course marketplaces like udemy and collect course prices on your own most of these sites allow you to filter and arrange information so you can collect a wide variety of data in many cases you can narrow results down by choosing a specific industry and using filters now this data won't be quite as accurate as actual course sales data but it's an okay place to start also keep in mind that marketplace courses are generally priced lower than self hosted courses or courses hosted on podía which will take into account once we've collected our data as an example for this step I've collected data from udemy site when we plug in the numbers we find that the median course price is $79 if we take thirty percent of the data points fifteen percent on either side of the median we get a range of $45 to $125 we're going to adjust number based on the percentage difference between marketplace courses and self-hosted courses and divide those numbers by 0.8 zero thats going to give us an adjusted range of $56 to $156 this gives you a rough idea of what most courses are going for and can serve as a starting point for where you might price your course step number two research courses in your industry this step is similar to the previous one except that you're going to try to narrow the field to courses that are most similar to your own you'll factor in things like the specific industry your topic the number of lessons or whether it's for beginners or more advanced students you don't want to narrow the field too much but enough that you can get a good sampling of data once you've done that you can apply the same calculation methods and take an average of the two so this essentially gives us two different ranges and we can take the average of those ranges and use that as a baseline for the following steps step number three determine your costs and net profit now that we've got an average range we're going to set those numbers aside for now and make some other calculations if you want your online course to make a profit it's important to determine your total cost for creating and maintaining your online course by calculating your total cost you can figure out the least amount you should charge in order to make a profit we're going to use a formula that combines the cost of creating and maintaining your course and the cost of marketing your course and then use that to determine how many sales you need and at what price in order for you to make a profit first let's determine the cost involved in creating and maintaining your course course creation did you purchase equipment software or pay a company or freelancer to help you create the course of course hosting what are the costs for the website or platform where your course is hosted time cost how much time did you take to create the course how much time will it take you to launch and market the course how much time will you spend on customer service after the course is launched the quick note here about the value of your time if you're not sure how much your time is worth try to at least come up with the amount you'd need to make per hour to cover your cost of living now let's determine the cost of marketing on average course creators will need to spend eighteen point five percent of their revenue on marketing in order to keep the course sales coming in this means the previous cost that we talked about will equal eighty one point five percent of the total you'll need to make in order to break even let's say your previous costs totaled two thousand thirty seven dollars and fifty cents if you divide that number by point eight one five that gives you the total cost of your course creation maintenance and marketing combined twenty five hundred dollars now that you've determined your total cost you can divide that number by various price points to see how many sales you'd need in order to break even at twenty five hundred dollars you need to sell twenty five courses at one hundred dollars each to break even or two hundred and fifty courses at ten dollars each to break-even now let's say you've got an email list of 1,000 people assuming an average conversion rate of two point three five you'd need to sell your course for about one hundred and ten dollars in order to break even let's look again at the average range we came up with in the first two steps it looks like we're right in the sweet spot and that's assuming our marketing efforts don't produce results or that our audience doesn't continue to grow step number four use the product demand matrix the product demand matrix is a framework that can help you understand how much your course might be worth on the market it's broken up into four quadrants representing four different types of products separated by cost and demand in the low demand low cost quadrant we've got labor of love products something you enjoy but is not necessarily profitable in the low demand high-cost quadrant we've got high-end products like luxury cars or watches in the high demand low cost quadrant we've got mass-market products like fast food hamburgers or department store items and finally in the high demand high-cost quadrant we've got golden goose products like smartphones and computers looking at this matrix you want to ask yourself the following questions does my course material appeal to a wide audience or a narrow audience what people typically pay a little money or a lot of money for a course like mine depending on how you answer these questions you can pinpoint where on the matrix your product might be the closer you are to the bottom left the closer you might want to price on the lower end of your pricing range the closer you are to the top the closer you'll want to price on the higher end of your range step number five determine your audience relationship factor your relationship with your audience is one of the most important factors when it comes to determining pricing if you haven't already started you need to build an audience around the topic of your course and engage with your audience regularly preferably on an email list assuming you have an audience there are three variables that taken together can give you an idea of how to price your course engagement on a scale from one to ten how would you rate your audience's engagement if you're communicating with your audience regularly what percentage of them are commenting or replying or taking action one to two percent is the industry average so if you have less than that you probably be about a two or three on this scale if it's more than five percent you could consider that a ten on this scale affinity on a scale from one to ten how would you rate your audience's affinity with you does your audience see you as a trustworthy source of information on your topic are you regularly providing value that brings your audience real results do you share content that allows your audience to get to know you and like you as a person relevance on a scale from one to ten how relevant is your course material to the needs of your audience a perfect score in this case would be thirty so how did you do this strategy is meant to help you think about pricing in the context of your relationship with your audience if you scored high but you priced too low you might get more sales but you could end up leaving money on the table if you scored low but price too high you might not end up selling enough to cover your costs knowing how you rank with these variables will help you have a better idea of how you should expect your audience to respond to your pricing again think about where your price might be in the average range based on how you scored in this step step number six imagine your perfect customers ROI for your customer your course is not an expense but an investment any time we gain new information or learn a new skill it becomes an asset that adds value to our lives that value can look like the ability to earn more money the ability to save time to feel healthier or to be happier imagine your perfect customer someone who really needs what you provide in your course and try to answer these questions what is it costing them right now not having the knowledge or skills you offer in your course what could they stand to gain or earn after completing your course let's use an example a developer currently makes 80 thousand dollars per year after taking an advanced JavaScript course they're able to get a promotion making twenty thousand dollars more per year that's a 25% increase in gear lis earnings how much would you be willing to invest in something you knew is going to give you a 25% return within a year now this doesn't necessarily mean you want to charge thousands of dollars for your course but if you think about your course as an investment you'll talk about it like it's an investment and if you talk about it as an investment you'll feel more confident charging a fair price if you determine your course would be a fantastic investment for the right customer don't be afraid to price near the higher end of the average range step number seven use price anchoring and tiers is $100 a lot of money it depends $100 probably doesn't go very far in your monthly budget but it would be a nice surprise to find a $100 bill sitting on the sidewalk the amount hasn't changed but your perception of its value has changed based on the context this is basically how price anchoring works if you offer your normal course at its regular price and also offer enhanced versions of your courses with added value at higher prices the normal course will be perceived as a better deal the most popular version of this is the 3 tier approach going from least expensive to most expensive the reason this approach works is because it uses price anchoring to change the perception of the price based on the other available tiers if the first tier might have normally seemed expensive it now seems like a fair price compared to the other more expensive tiers another reason this works is because people like having options but not too many options and 3 seems to be a sweet spot so let's break down the three tiers the first and least expensive option should include the full course it's important that you not lower the price of your course for this option we're not discounting the course but adding value in the other tiers the second and slightly more expensive option should include the full version of your course and some kind of added value the added you could be something like extra lessons additional documentation or some kind of tool that makes it easier for your customers to take action on what they've learned the third and most expensive option should include the full version of your course the added value from the second tier and even more added value the additional added value could be something like a monthly group call with other students a one-on-one mentorship call with you or access to an online group or community these are just some examples of things you might include but the most important thing to remember is not to discount or take away from your course but to charge the regular price for the full course and then add value as the price increases in your other tiers this will help you feel more confident when pricing your course because the price of your first tier will be perceived as lower compared to the other tiers bonus tip if you price your second tier correctly and highlight it as the most compelling option it can boost your course sales a good rule of thumb for pricing tiers is to follow the ten 25100 formula so if the full price of your course is $99 your tears would look like this tier 1 $99 tier 2 $249 tier 3 999 dollars as long as the value you're providing in each tier matches the price tier 1 will look like a no-brainer tier 2 will look like a great deal and people who can afford it may still purchased here 3 well that was our seven step process for pricing your online course my hope for you is that after you've implemented some or all of these steps you'll feel confident about your price and excited to share your course what are some strategies you've used to price your online course let me know below in the comments if you found this video helpful and you want more content like this be sure to subscribe and hit that notification bell so you'll be sure not to miss any future videos thank you for watching and I'll see you next time [Music]

Channel: Podia

Views: 7,694

Rating: 4.938838 out of 5

Keywords: how much should I charge for my online course, online courses, online course pricing, pricing strategies, online pricing, how much to charge, how much to charge for an online course, online course, pricing, how to price an online course

Id: hjB2y6hZ0rI

Length: 13min 13sec (793 seconds)

Published: Thu Mar 19 2020