Online Course Pricing Models: How to price your online course

In our digital age, one industry that has soared to unprecedented heights is the world of online courses. With global eLearning revenue predicted to reach $325 billion by 2025, the allure of creating and selling an online course has never been greater.

As Webflow experts, we have the power to build unique and engaging online courses with relative ease. But the process doesn't end at content creation - one of the most critical aspects of launching an online course is determining the right pricing model. Your choice of pricing model not only influences your revenue but also shapes the perceived value of your course and the engagement of your learners.

Overview of different online course pricing models

As the online-learning landscape evolves, so do the pricing models that educators use for their courses. Here are a few common online course pricing models and a brief explanation of each:

Pay-Per-Course

This is a simple, one-time payment model where students pay a flat fee to gain lifetime access to a course. This model provides immediate revenue and is easy for students to understand. However, it may require a significant marketing push for each new course.

Furthermore, a pay-per-course plan would be great if your online course is cohort-based. This is where you open the course for a set period of time until you reach a capacity. These courses tend to run for about 2 - 3 months. Usually, cohort-based courses are more expensive and you’ll need to run your marketing campaigns intermittently.

Udemy is a great example of this pricing model. Each course on the platform has a set price, which students pay to gain lifetime access to the content. The platform hosts a diverse range of courses on topics ranging from coding to photography.

Subscription Model

Under this model, students pay a recurring fee (monthly or annually) for access to multiple courses. This model provides steady, predictable income and can increase student retention as they have continuous access to the course content. However, it demands regular content updates to keep subscribers engaged. This can be a bit problematic if you’re a solopreneur and don’t have a team to update content and engage in the student forums.

MasterClass uses this model. For a single annual subscription, learners gain access to their entire library of courses led by industry professionals and celebrities, allowing users to explore multiple courses under one fee. This model works well if you online courses are not niche to one industry. For instance, if you have courses on Design, Photography and other fields. In this case, why not check out this sleek, free cloneable by Memberstack here.

Freemium Model

In the freemium model, a portion of the course content is offered for free to students. They can then upgrade to a paid version to access the full course or additional features. This model can attract a large user base, but conversion rates from free to paid users can be a challenge.

Codecademy operates with a freemium model. Basic courses are free, offering users a solid grounding in programming languages. However, if users wish to access more advanced content, quizzes, and projects, they need to upgrade to the Pro version.

Bundle Pricing

Here, courses are grouped together and sold for a lower price than if purchased individually. This can encourage students to buy more courses upfront, potentially increasing your revenue. However, the perceived value of individual courses may decrease.

Coursera often uses this model with its Specializations. These are a series of related courses that learners can subscribe to as a bundle. For example, you might find a four-course Specialization on data science where the courses build on each other to develop in-depth knowledge.

Tiered Pricing

With this model, different versions of the same course are sold at different prices. The basic tier might include just the course, while higher-priced tiers could offer additional features like one-on-one consultations, access to a private community, or bonus materials. This gives students flexibility in choosing a price that matches the value they expect to receive.

Teachable, an online course creation platform, allows its users to implement tiered pricing. For example, a course creator could offer a basic course for a set price, an intermediate package that includes additional resources for a higher price, and a premium package that includes one-on-one consultations at the highest price.

Each model has its strengths and weaknesses, and the choice depends on various factors such as the target audience, course content, and the goals of the course creator. Understanding these models is key to finding the one that fits best for your online course offering.

Freemium include pros and cons

Freemium Pricing Model for Online Courses

The freemium pricing model is a popular choice for many eLearning platforms and online courses. In this model, a substantial part of the course content is offered for free, while advanced features, additional resources, or complete access are gated behind a paywall. Here are the pros and cons:

Pros

Accessibility

A freemium model provides a low barrier to entry, making the course accessible to a larger audience. Learners can explore the course content without any financial commitment, which can be particularly attractive to those who are budget-conscious or unsure about the value of the course.

Brand Awareness

Offering a part of the course for free helps in spreading the word about your course and increasing brand awareness. A satisfied learner is likely to recommend the course to others, expanding your reach organically.

Flexibility

A freemium model often allows learners to progress at their own pace. Without the pressure of "getting their money's worth" in a limited time frame, learners can take their time to understand and absorb the content, leading to a better learning experience.

Cons

Conversion Challenges

The biggest challenge in a freemium model is converting free users to paying customers. Only a fraction of free users typically upgrade to the premium version, so you need a large user base to ensure sufficient conversions.

Undervaluation Risk

If too much content is given away for free, it can risk undervaluing the course. Users may come to expect high-quality content for free, making it harder to convince them of the value of the premium offering.

Resource Intensive

Maintaining a freemium model can be resource-intensive. You're providing services to a large number of free users, which can strain your resources, including server capacity, customer support, and content update efforts.

Subscription pricing model

The subscription pricing model, where students pay a recurring fee for continued access to a course or a catalogue of courses, is widely used in the eLearning industry. Here are its pros and cons:

Pros

Recurring Revenue

Perhaps the most significant advantage of the subscription model is that it provides a steady stream of recurring revenue. Unlike one-time purchases, subscriptions guarantee a fixed income every month, making it easier to predict cash flow and plan for growth.

Customer Retention

This model also encourages customer retention. Once students have subscribed, they're more likely to stay engaged with your content to get the most value from their subscription. Additionally, the recurring payment can create a sense of commitment, making users more likely to return regularly to consume the content.

Cons

Demand for Fresh Content

One potential drawback is the expectation of continuous content updates. To justify the recurring payments, you need to consistently provide new, high-quality content to keep the subscribers engaged. This demand can strain your resources and may be challenging for small or solo course creators.

Pricing Perception

Pricing can be a tricky aspect. If the subscription price is perceived as high, potential students might be deterred from subscribing, fearing they won't get their money's worth. On the flip side, if the price is too low, it may undervalue your content.

Churn Rate

While subscriptions can help with customer retention, they also introduce the risk of churn – subscribers canceling their subscriptions. It's crucial to continuously demonstrate value and engage with your students to minimize churn.

In conclusion, the subscription pricing model can be an excellent option for online courses, particularly for those with a broad content offering that's regularly updated. However, course creators must be aware of the inherent challenges and strategically plan to mitigate them.

Memberstack plays a pivotal role in helping content creators adopt a subscription-based model. It's a platform designed to integrate seamlessly with Webflow, enabling developers to add user accounts, membership gateways, and payment systems to their websites, all without writing a single line of code.

For instance, you can create different membership tiers, each with its own subscription price and access level. This makes it possible to gate content, providing different access to different user groups based on their subscription level.

Important factors to consider:

Target audiences

Recognizing your target audience is a crucial aspect of developing and marketing an online course. Understanding who will be most interested in your course will enable you to tailor your content to their needs, communicate effectively with them, and ultimately, drive more enrollments. Here are a few audiences that might be relevant for a Webflow-based online course

Web Designers

Both professional and aspiring web designers can benefit greatly from an online course centred around Webflow. As Webflow offers a unique blend of visual design control and semantic HTML/CSS/JavaScript generation, it's an attractive tool for designers who want to expand their skill set. By learning to use Webflow, designers can improve their productivity, create more responsive designs, and cater to a wider array of client needs.

Freelancers

Freelancers, especially those in the web development or design field, are always on the lookout for new tools to add to their arsenal. Offering Webflow as a service to clients can be a significant advantage for freelancers. It allows them to deliver highly customizable web solutions without having to delve deep into code, making their workflow more efficient. A course teaching them the ins and outs of Webflow could be invaluable.

Content Creators

Content creators today strive for unique, appealing websites or portfolios that resonate with their personal brand. Webflow enables this, allowing for detailed design without mastering traditional coding. However, creators often seek ways to offer premium, gated content for their audiences - this is where Memberstack shines. For instance, you could funnel your audience to a landing page where they could sign up to your online course platform. Feel free to use this free cloneable to build your own, scalable learning platform here.

Memberstack, integrating seamlessly with Webflow, allows creators to effortlessly incorporate membership functionalities and content gating. It empowers creators to devise various membership levels, offering a range of access and benefits - from exclusive site sections to premium resources or advanced course modules. This versatility makes it a robust tool for content creators aiming to monetize their work or offer structured learning experiences

Revenue goals

One if the biggest considerations when starting an online course venture, is revenue targets. Thankfully, online courses are usually quite profitable since there isn’t many overheads.

After achieving initial profitability, the focus for an online course creator shifts towards escalating revenue growth and fostering recurring revenue. Revenue growth can be fueled by various strategies, such as broadening the student base, adjusting course prices, or unveiling new courses.

In addition to this, one way to grow your student base is to introduce a Buy Now, Pay Later service at checkout. Offering customers the ability to spread payments over several months is a customer-centric approach that can significantly boost sales. It reduces the upfront cost burden, making courses more affordable and accessible to a broader audience. Integrating payment solutions like Klarna can be very effective.

For those adopting a subscription-based model, the emphasis is on generating a steady, predictable income stream through regular subscription fees. This recurring revenue not only ensures financial stability but also facilitates effective long-term planning and business sustainability.

Pay per course

Recognizing your target audience is a crucial aspect of developing and marketing an online course. Understanding who will be most interested in your course will enable you to tailor your content to their needs, communicate effectively with them, and ultimately, drive more enrollments. Here are a few audiences that might be relevant for a Webflow-based online course:

Web Designers

Both professional and aspiring web designers can benefit greatly from an online course centred around Webflow. As Webflow offers a unique blend of visual design control and semantic HTML/CSS/JavaScript generation, it's an attractive tool for designers who want to expand their skill set. By learning to use Webflow, designers can improve their productivity, create more responsive designs, and cater to a wider array of client needs.

Freelancers

Freelancers, especially those in the web development or design field, are always on the lookout for new tools to add to their arsenal. Offering Webflow as a service to clients can be a significant advantage for freelancers. It allows them to deliver highly customizable web solutions without having to delve deep into code, making their workflow more efficient. A course teaching them the ins and outs of Webflow could be invaluable.

Content Creators

Content creators today strive for unique, appealing websites or portfolios that resonate with their personal brand. Webflow enables this, allowing for detailed design without mastering traditional coding. However, creators often seek ways to offer premium, gated content for their audiences - this is where Memberstack shines.

Memberstack, integrating seamlessly with Webflow, allows creators to effortlessly incorporate membership functionalities and content gating. It empowers creators to devise various membership levels, offering a range of access and benefits - from exclusive site sections to premium resources or advanced course modules. This versatility makes it a robust tool for content creators aiming to monetize their work or offer structured learning experiences.

A Tiered pricing plan

A tiered pricing model offers several levels, or tiers, each with a different price and set of features or services. This model is quite popular in the software and online course industries. However, like with all pricing models, it has its caveats, so let's explore them so you can make an educated decision based on your business.

Pros

Increases Revenue Streams

Tiered pricing creates multiple revenue streams as customers select the tier that best suits their needs and budget. Higher-priced tiers contribute to higher revenue per user.

Broadens Customer Base

Offering different tiers caters to a wider range of customers, from those seeking basic features at a lower cost to those willing to pay a premium for more comprehensive offerings.

Provides Upselling Opportunities

Once a customer subscribes to a lower tier, there's potential to upsell them to a more expensive tier. This incremental revenue can significantly boost total income.

Cons

Potential Overwhelming Choices

Too many tiers can confuse customers, leading to decision paralysis. This could potentially deter them from purchasing.

Resource Management

Each tier needs to offer value for its price. Managing resources to create and maintain distinct valuable features for each tier can be challenging.

Potential Competitors

Udemy, one of the largest online learning platforms globally, has a unique approach to pricing that has been instrumental in its success. It primarily operates on a pay-per-course model, with prices typically ranging from $20 to $200 per course. However, Udemy frequently offers steep discounts, often reducing course prices to as low as $10.

This model encourages impulse purchases and allows students to amass a collection of courses to learn at their leisure, without the commitment of a subscription. By hosting a vast number of courses across a wide variety of topics, Udemy manages to cater to a broad audience and generate significant revenue, despite the low pricing.

So what does this mean for you? Well if you have a few core courses and/or digital you can utilize this framework. In particular, this model works well for upselling and making courses/digital products on offer. Udemy is known for offering courses for software engineers, so it's a built reputation in that industry. Perhaps, your online course could be in a similar niche.

If you’re looking for a centralized, platform to host your courses, similar to Udemy, check out this free cloneable by Memberstack.

Niching down in a single industry means you can focus your marketing efforts to a specific group of people. It's also good for building a reputation in that industry.

Skillshare, another major player in the online learning space, focuses on creative education with a subscription-based model. With a monthly or annual subscription, users get unlimited access to all classes across various disciplines like design, illustration, photography, and more.

For instance, a design enthusiast could take a course on "Graphic Design Basics: Core Principles for Visual Design" one day and "Logo Design with Draplin: Secrets of Shape, Type and Color" the next, all under the same subscription. Therefore, If you have a large range of courses, users have the flexibility of choosing and would happily pay $27 a month, giving you predictable income.

What next?

Online course pricing models significantly impact an institution's revenue goals. A pay-per-course model could provide immediate revenue, making it an excellent option for an initial cash influx or for high-value, specialized courses.

Subscription models, on the other hand, may start slower but offer a consistent, predictable revenue stream over time, supporting long-term financial stability and growth. Freemium models can drive user acquisition and build a broad user base, potentially converting these users into paid customers over time for sustained revenue.

Lastly, tiered pricing models diversify revenue streams by catering to different user segments and price points, increasing the potential for upselling and revenue optimization. In summary, each pricing strategy carries its revenue implications, and a thorough understanding of these can help align the chosen model with the course creator's financial goals.

The best place to start with your online course is an informative landing page with a way to sign up to the course. Thankfully, Memberstack offers another free cloneable to get you started, grab yours here.