How to price an online course

Setting the right price for an online course is one of the most crucial decisions for any digital content creator. This decision can significantly impact your revenue and market positioning. Let's explore the most effective strategies for determining the optimal price for your course.

1. Fundamental Principles of Course Pricing

1.1 The Binary Purchase Decision

Unlike purchasing a physical product, buying an online course involves a binary decision: either the potential buyer believes the course will solve their problem or transform their life, or they don't. There's rarely a middle ground.

In this context, price is often not the determining factor. If someone is convinced your course will help them achieve their goals, they'll be willing to invest whether it's $99 or $297, as the perceived value far exceeds the financial investment.‍

1.2 The Importance of Perceived Value

The key element isn't so much the price itself but the perceived value of your course. This value is determined by several factors:

• The expert's credibility
• Promised results
• Quality of existing free content
• Brand experience and reputation
• Teaching style

2. Psychological Price Points

2.1 Major Price Ranges

Online course prices typically organize around well-defined psychological price points:

• $10: Entry-level products
• $100: Basic courses
• $1,000: Comprehensive courses
• $10,000: Premium programs with coaching

These tiers correspond to distinct value perceptions in potential customers' minds.

2.2 The Impact of Prices Ending in 9

Contrary to a widespread belief in digital marketing about prices ending in 7, psychological studies have demonstrated the effectiveness of prices ending in 9. This practice is used by major companies like Apple.

3. The Bundle Technique

3.1 The Entry-Level Bundle

This bundle should be about 20-30% cheaper than your core bundle but with significantly less content and features. Its main role is to serve as an anchor to enhance the value of the core bundle.

3.2 The Core Bundle

This is your reference bundle, the one you want the majority of your customers to choose. It should present the best value for money and include the essential elements of your course.

3.3 The Premium Bundle

This bundle, typically 2 to 3 times more expensive than the core bundle, should include premium elements like personal coaching. It serves two purposes:

• Creating a high anchor point
• Capturing high-budget customers

The problem with the “Bundle Technique” is that most online course platforms are not flexible enough. If you want to offer different bundles with additional courses or coaching sessions, it can be complicated.‍

SchoolMaker avoids this problem. You can create several bundles that include access to:

• Courses
• Community
• Coaching
• Lives
• Videos Q&A.

Your bundles are fully customizable. A duration of access can be defined for each content (lifetime, limited-time, subscription).

4. Optimizing Your Pricing

4.1 Analyzing the Sales Curve

The ideal sales distribution should form an inverted U curve:

• Few sales on the entry-level bundle
• Maximum sales on the core bundle
• Some sales (less than 20%) on the premium bundle.

If you don't see this curve, you haven't calibrated your prices correctly.

If you see a curve like the following, your core bundle is probably overpriced. Reduce the price of your core bundle.

Finally, if you see a curve like the following, your core bundle is probably priced too low. Increase the prices of your core and premium bundles.

4.2 Gradually Adjusting Prices

Price optimization is an ongoing process. It's recommended to:

• Start with a single price aligned with psychological price points
• Progressively add premium packs
• Adjust prices based on sales data

5. Common Mistakes to Avoid

5.1 Undervaluing Your Course

A common mistake is setting too low a price out of fear of not selling. This strategy can be counterproductive because it:

• Decreases perceived value
• Reduces margins for marketing investment
• Attracts less committed customers

5.2 Multiplying Pricing Options

Avoid creating too many different price options as this can:

• Create confusion
• Encourage comparison on inadequate criteria
• Slow down decision-making

Conclusion

Choosing the price for an online course is a balancing act between perceived value, psychological price points, and positioning strategy. Success lies in a structured approach with well-differentiated offers and continuous analysis of sales results.

FAQ

Q1: Do I need to offer three tiers from the start?

A: No, it's better to start with one well-constructed offer and gradually add other options once you've validated the market.

Q2: How do I know if my price is too low?

A: If more than 20% of your customers choose your premium bundle, it's a sign that your prices can be increased.

Q3: What's the ideal price difference between bundles?

A: The entry-level bundle should be 20-30% cheaper than the core bundle, and the premium bundle should be 2 to 3 times more expensive.

Q4: When should I consider raising my prices?

A: Consider raising prices when you have consistent sales and strong testimonials, and if your premium tier is selling more than expected.