What price to use for my online course… this is a question I hear a lot! 😉
We’ll dive into some of the pricing principles that I have personally used to sell over a 1.5 million USD in online courses (as well as what I’ve seen other course creators use successfully) soon.
It’s likely why you’re here. You hope to find “THE” answer to choose that perfect price for your online course.
Well, I have some good news and bad.
The good news is that there IS a way to hone in on the perfect price for your course.
There are rules, principles, and practical solutions based on science and psychology that do work, and you will learn all about them in this guide. 👍
The bad news is that there isn’t an out-of-the-box solution that serves everyone in every single situation.
Pricing your course correctly is a bit of an art, and getting this wrong can have a huge negative impact on your sales.
So yes, it's essential to price your course correctly, but don't worry I've got you covered and you will learn everything that you need to know in this guide. 😎
Table Of Contents
This guide covers the following topics:
- How To Price Your Online Course
- The importance of owning your own website
- The Psychology of Effective Online Course Pricing
- Tip 1 - Choose Prices with Fewer Syllables
- Tip 2 - Reduce the Left Digit (by one)
- Tip 3 - Follow The 100 Rule
- Tip 4 - Remove Commas
- Tip 5 - Provide a Reason Behind The Discount
- Tip 6 - Use the Perfect Amount of “Roundedness”
- Tip 7 - Use Value-Driven Pricing
- Applying These Principles To YOUR Online Course Pricing
- Online Course Pricing for Single Course Sales
- Online Course Pricing for Bundles
- Online Course Pricing for Subscriptions
- How to make the most of your new knowledge on pricing
How To Price Your Online Course
There are many ways to price your courses:
- One Time Fee
- Installment Plan
- Monthly Subscription
- Annual Subscription
And that doesn’t touch upon aspects like discounts, bundles, and lifetime plans!
The good news is that you don’t have to choose and commit to just one.
Your courses can use several of these pricing options, as different persons are interested in different types of deals.
Yet, there are certain pricing rules to follow regardless of the option(s) you choose.
The importance of owning your own website
But first I’d like you to realize that to get the most out of these pricing strategies, it’s essential to have your own website as a course creator!
It isn’t to say you can’t place your courses on marketplaces like Udemy and Skillshare, but you cannot leverage most of these principles unless you have your own site.
Doing so gives you more freedom to experiment with different pricing models, but, more importantly, lets you create a platform where you compete only against yourself and where you can do value-based pricing, which we will discuss in detail.
And it's just so simple to build your own online course website for free with no technical or design skills needed (using OnlineCourseHost.com), that there is no good reason not to try it.
The Psychology of Effective Online Course Pricing
You must have noticed in the supermarket all those strange prices of $2.99, $19.99, etc. that are commonly used.
Why use such weird prices? Well, because they work. 😉
These strange-looking prices are carefully chosen by retailers based on some well-known psychological pricing principles.
If you want to learn in huge depth more about it, I can recommend this extensive guide - Pricing Psychology - A list of pricing techniques.
I'm going to summarize here some of the most important psychological principles for you to be aware of, that are the most relevant for online courses.
1: Choose Prices with Fewer Syllables
This one is a bit of a mind-bender, the first time you hear it. 😊
It may sound obvious, but some words are way easier to say (and process) than others, and this is of course language-dependent.
Let’s look at an example real quick… out of these two prices, which is better?
At first glance, you may say the lower number is best… right?
Say these numbers out loud in English and you’ll see why.
- Twenty-seven dollars and eighty-nine cents (12 syllables)
- Twenty-eight dollars and thirteen cents (10 syllables)
The higher price is actually easier to say.
It has fewer syllables, which is easier for your brain to process, which makes this higher price slightly more appealing.
And it's true, the price $28.13 by whatever reason just feels more catchy, right?
And yet, it's higher! 😊
But the fact that the price is easier to say makes it slightly easier to consume by our subconscious mind, which makes the price intuitively feel more attractive.
Before learning this, I assumed the price was all about price, and that's it.
But no, there is a whole range of psychological tricks that can be used to make the purchaser feel comfortable with a slightly higher price, and this is just one of them!
So what other tricks can we use?
2: Reduce the Left Digit (by one)
Another common practice is to set a price that ends in .9, .99, or .95.
Marketers have used this one for years… and the results are clear to see, as a pricing study from the digital product platform Gumroad shows).
As we can see, reducing the price from $2 to $1.99 increased the conversion rate of the same digital product from 2.39% to a whopping 5.2%!
That's almost double the sales for one cent less! 👍
However… there’s more going on here than you might expect.
An experiment like this hints that using the number *9* is key...
But that’s not entirely true because lowering a price from $2.90 to $2.89 won’t make much difference.
Whereas dropping the price from $3.00 to $2.99 will!
So what’s the difference? The left digit!
Dropping it from *3* to *2* has a massive impact (even though the price change is negligible).
This comes down to perceived value (and magnitude). The left digit represents a larger number, so when this changes your audience makes an instant decision.
If it’s lower, they’re getting a good deal.
If it’s higher, they aren’t.
It may only be a one-cent difference, but in your audiences’ subconscious mind, it’s far greater than that. 😉
3: Follow The 100 Rule
Following on from above, your audience’s perceived value of your course continues to play a large role.
Not just in your price, but any discounts or bonuses you offer.
Or, more specifically, how you communicate these!
Let’s look at a few examples…
Out of these two offers, which is better?
- $10 -- $1.00 OFF!
- $10 -- 10% OFF!
And how about this one?
- $200 -- 10% OFF!
- $200 -- $25 OFF!
Or even this one?
- $1000 -- $500 OFF!
- $1000 -- 50% OFF!
It’s likely (at least, on a subconscious level) that you gravitated toward certain prices, right?
What’s at play here is The 100 Rule, which goes like this:
If your price is under $100, it’s better to focus on the percentage, whereas if it’s over $100 it’s more effective to focus on the actual money saved.
This is important to know for course creators because most gravitate toward a percentage discount.
This is fine if your course is under $100, but if it’s more than this it can turn your audience off.
Or at least not capture their full attention!
4: Remove Commas
It may sound strange, but research from Coulter, Choi, and Monroe suggests that removing the thousands comma from your price makes it seem cheaper.
The reasons come down to phonetics and the number of syllables.
For example, let’s say you price your course at $1,299.
By framing it at $1,299, it’s read: one-thousand two hundred and ninety-nine (10 syllables).
Whereas if you frame it as $1299 it’s read: twelve ninety-nine (5 syllables).
So as you can see, it's the same price, but half the number of syllables, and so $1299 just feels cheaper. 😉
5: Provide a Reason Behind The Discount
You’ll likely run many discounts and sales over time.
When it comes to building momentum and reaching new people, lowering your price for a set amount of time can have a huge impact.
Yet how you choose to discount is important. Again, not on the conscious mind, but beneath the surface where your audience forms instant perceptions.
Let’s show this in action:
- $100 -- $25 OFF!
- $100 -- BIRTHDAY SALE $25 OFF!
This same sale has one large difference… and that’s how the second version provides a REASON!
The reason here is a yearly event, so it makes the discount sounds a bit scarcer than usual: it only happens once a year.
The reality is, we come across sales all the time. In the supermarkets, shops, online… each day you’re shown one sale, discount, and special offer after another.
Over time, they mean little to us. Your audience just sees you as another brand offering them another meaningless discount.
By providing a reason behind it, you bring it to life and reinforces the idea that there’s a countdown.
This sale is for your birthday. Once the date passes, the price rises.
If you can attach a reason to your sales, especially making them linked to a yearly event, you will see your conversion rates go up. 😉
6: Use the Perfect Amount of “Roundedness”
As a general rule, marketers get taught to not use round numbers.
In other words, don’t sell your course for $200… sell it for $199.99.
However, it isn’t always as simple as this, and it comes down to whether you provide an emotional or rational purchase.
Wadwha and Zang found that people process well-rounded prices ($100) more fluently, which is beneficial for an emotional purchase.
The fact it’s easier to say and process in their mind simply feels “right” and reinforces their emotions.
Whereas for a rational purchase, a less fluent number works better ($99.99) because they form a perception that this is a real price with a purpose, rather than one grasped out of thin air.
It’s less fluent, so they ask themselves: why is it this price? Why not just $100? Surely, there must be a reason…
As a course creator, this is important to know because some courses are more rational than others.
If, for example, you help professionals with salary negotiation, you provide a very rational offer.
Whereas if you provide a course that teaches a new parent how to do yoga with their baby, the offer is much more emotional.
Unlike some of the principles I share here, this one is a little more debatable, but this is still worth considering depending on the type of course you sell and WHO you’re selling to.
7: Use Value-Driven Pricing
This brings us to the final principle on our list, and the perceived value your audience has toward your course.
It doesn’t always matter about how much you think your course is worth. You may *know* that by taking it each student will save or make thousands of dollars.
But unless they know or believe this, it doesn’t matter.
This is one of the main reasons why it’s important to have your own website and not rely solely on marketplaces alone.
On marketplace platforms, you’re not only in competition with thousands of other course creators, and their price affects yours by comparison.
If most courses on a platform cost $10-20 and you price yours at $50, your audience WILL perceive yours as too high (even though you may know your course is worth much more than $50!).
So you always have to ask yourself: what does my student perceive as the “right” price?
If you price above this number, you’ll struggle to convert.
Likewise, if you price below this number you will struggle to generate enough revenue.
It’s why having your own website is important because on your website you only compete against yourself. 😉
They base their perceptions on you, your courses, and the information in front of them -- not against the countless other courses and course creators.
This way, in your own website, far from the distractions and the comparisons with other courses, you can price your course according to the value that the course benefits will bring to the student.
After years of experimenting on my own courses -- and seeing what works for other people -- these are the psychological aspects I’ve found make the biggest impact.
But knowing this is only half the battle.
What matters is understanding how to effectively use this information 👇👇
Applying These Principles To YOUR Online Course Pricing
One of the best commitments and investments you can make for your online courses is to have your own website. With your own site, you can implement all the psychological aspects we’ve discussed.
Whereas if you rely only on marketplaces, some of these techniques remain out of reach.
Yet it isn’t just the techniques you use that make having your own website valuable.
With your own site, you can experiment with different pricing options and approaches.
You can, if you like, offer monthly subscriptions besides one-time sales.
You can also bundle different courses together to provide greater value to your students, and sell the packaged bundle by a much higher one-time purchase.
AND you can lower (or raise) the price of certain courses to support new launches.
This is where the power of value-based pricing comes in…
How to price an online course bundle
For example, let's say that you have an existing course that costs $99, and that you are launching a new course also at $99.
For this new one, you can set a special discount of just $49 as well as a bundle price of $89 that gives students access to both courses.
Both the new course launch price of $49 and the bundle price of $89 will look like great deals.
Getting both courses for just $89… it feels like a no-brainer!
When you bring other psychological aspects into play, such as:
- A reason for your special discount price…
- Following The 100 Rule…
- Choosing a price with fewer syllables…
You create a truly enticing offer for your students! 😊
This is how I’ve approached online course pricing over the years: it’s an ongoing experiment.
What works for some creators might not work for you, and vice-versa.
But with the techniques you’ve learned in this guide, you have all you need to figure out what does work for you. 😎
How to use prices to guide your audience to a given offer
The prices on your website are one of the most important factors that will guide your audience to choose one of your offers.
- Would you rather them buy a certain course for a one-time fee?
- Would you prefer they sign up for a monthly subscription to all your courses?
- Would you like them to purchase lifetime access to all current and future courses?
- Would you want them to purchase a certain bundle?
With your own site, you can give your audience multiple choices.
But even though they have a choice, you can still point them toward your desired outcome.
They *can* purchase a single course if they want.
But if you’d rather they sign up for a monthly subscription, you can use value-driven pricing to drive this.
The prices you create aren’t in isolation in this regard. All the prices on your website are related to each other.
Each one has a purpose, leading your audience to choose a particular outcome.
Let’s see how this can look...
Online Course Pricing for Single Course Sales
If you’ve only published a couple of courses and/or are still building an audience, you may prefer to sell as many one-time courses as possible.
Doing so can lead to more reviews, and it *can* generate more revenue upfront.
The common advice most experts offer in this situation is to price your course high.
But I personally do not recommend this, based on my personal experience.
I’ve found most people are put off by courses above $100 for an online course.
Instead, I recommend you start low and slowly raise your prices over time.
I’ve found these price points to be effective for a monthly recurring subscription are: $9.99, $19.
While these other prices work great for one-time sales: $39, $49.
And these higher prices work great for bundles and yearly recurring subscriptions: $89, and $99.
My personal favorite price is $89, because it's the highest price below $100 with the shortest number of syllables, so we are combining many of the principles that we have learned. 👍
Having experimented a lot over the years, this is often a price I set for bundles, although not always from the offset.
Again… do not be afraid to start low.
When launching a new course, provide a special price of $19, or $49.
You can raise it to $49, $89 or even higher depending on the perceived value of the course, but for the first few weeks do keep it low to start.
I’ve also found using permanent discounts useful when focussing on single-course sales.
The normal price for this course is $297, but with a special discount, you can grab it for just $89.
As you can see, with the design of OnlineCourseHost.com, many of these psychological pricing aspects come into play.
Online Course Pricing for Subscriptions
Finally, another pricing option to consider is a subscription model, typically either a monthly or a yearly subscription.
As you know, creating recurring revenue streams is the holy grail for most online businesses, and an online course business is no exception.
You usually need at least a few courses to make this viable, but you can include other features like:
- Access to future updates and courses
- Private online group, community, or forum
- Invites to special masterclasses, events, and live training
Again, if your desired outcome is for students to become subscribers, you need to make this more attractive than purchasing a single course.
Let’s look at another example:
- Course 1: $49
- Course 2: $49
- Course 3: $29
- Course 4: $19
Subscription: $9.99 per month. 😉
Doesn't that feel like a no-brainer?
People can stay subscribed for years with that price, because it feels like such a high-value offer when compared to the other prices on the website.
In just five months, your audience pays the value of Course One while also getting access to the other three courses (among other features you offer).
They can choose to pay for each course individually, but you have priced your courses in a way that makes much more sense for them to simply subscribe, and that's the whole idea.
Remember, the prices on your website never exist in isolation, they are always constantly being compared to each other by your students.
By carefully setting your prices, you can guide your audience to a particular choice that you prefer that they take:
- take a subscription instead of separate courses
- take a bundle instead of separate courses
- take a yearly plan, that looks cheap compared to a lifetime plan
In general, I recommend guiding your audience to either recurring subscriptions if you have a nice course catalog and are continuously creating new content, or to course bundles if you don't continuously record new courses.
So, in short: Online Course Pricing is Super Important 🚀🚀 😉
Do not leave it as an afterthought. Do not rely on marketplaces to do all the work for you, as they often tend to drive the prices to the bottom and make it almost impossible to do value-based pricing.
Do not assume pricing is just about the price. There’s so much more that goes into it.
How to make the most of your new knowledge on pricing
And remember, you can only really do value-based pricing and try out all these pricing alternatives if you publish your courses in your own website, this is crucial.
If you only publish in marketplaces, then pricing your courses based on the perceived value of their benefits to the student is really not feasible, because who is going to purchase a $99 course if it's listed next to 10 other $9.99 courses, right?
Would you? I sure wouldn't! 😉
You might think that setting up an online course website is both expensive and technically complicated, but this is not the case at all.
Using our platform, you can publish multiple courses for free and sell it to your students, without needing any special technical or design skills.
Our course builder interface is super intuitive and easy to use, and our help desk will guide you with any questions through your whole course creation journey.
Besides giving you all the tools that you need, we also want to give you all the information that you need to become a successful course creator, so that is why we publish guides like this one regularly at our Course Creator Academy.
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If you’ve found this guide valuable, you’ll also love our Course Creator Academy that includes articles, posts, and guides like:
- How to research course topics
- How to choose the right equipment
- how to record an online course
- How to create an online course website for free
- How to sell an online course
- how to create an online course business
- and much more 😉
Thank you for reading, and until next time, I wish you Happy Teaching! 😃
OnlineCourseHost.com Founder & Online Course Creator
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