Conduct competitor research and weigh your value against others in your industry
It can be difficult to conduct competitor research if there isn't a community or a course that's providing the same experience you are. But by conducting competitor research — even if it's just an analysis of online courses that are structured or formatted in a way similar to yours — you'll be able to get a sense of why different learning businesses charge what they do for access to their community and offerings.
WeAreNoCode founder, Christian Peverelli, advises that too many founders of learning communities reduce the perceived value of their experiences by not charging enough. Striking the right balance between value and cost can put you in the unique position to find only the most dedicated learners.
As a counter-argument: you may want to price your course lower than the competition if you don't yet have the capacity or bandwidth to offer the same or higher value, or, if you're just starting out, have a small team, or need to run some experiments before charging premium pricing. A lower price point could be enticing to a larger breadth of potential members.
You can always increase the cost of entry to your community or cohort-based course. It's not great to start a higher price point and decrease your pricing due to lack of interest. Ship 30 for 30 co-founder Nicolas Cole shares:
“You come out guns swinging and you launch your course at $3,000 bucks. And then six months later, it's $300 bucks. You don't want to do that. If you just take the time — maybe do your first one for free — see if what you're doing is even compelling, right? There's no point worrying ‘Should I charge $500 or $700?' when you don't even know if what you're doing is what people need. Start at the very bottom and then inch your way up.”
Start with your end goal, then work backward
For some founders, it's helpful to think of your pie-in-the-sky price — the goal for what you'd eventually like to charge for admission to your online community, and respective courses or events — then work backward from there.
Alen Faljic, founder of business design course d.MBA, used this approach to land at his goal cost:
“My goal from the beginning was $3,000. I knew where I would like this thing to be, so I needed a team for us to be able to do all these things. So initially, I felt comfortable with $500 and that's what the first eight [members] paid. It worked. So I said, ‘Okay, let's go with $1,000.' So then we gradually increased it with each intake. Then, the biggest increase was from $1,500 to $2,500, which is a huge increase. For these kinds of increases, it helps if you have some kind of justification.”
Justifications for price increases can be anything from creating more offerings or touchpoints for your community to hiring a team that can handle the administrative tasks while you focus on delivering a world-class learning experience.
Consider making your course free (and exploring different monetizing models)
We've talked to several founders of learning businesses who have found their most successful members are those who wouldn't have had the means to access their online course if payment was required.
Dominic Blank, founder of the sales accelerator Hyrise, recognized this in his own community. Requiring payment to upskill members into a career they know nothing about felt wrong to Dominic, and it triggered a fundamental shift in their revenue model:
“We knew we had to change something, especially since our mission is to enable people to have a career they love through access to skills, and we didn't really provide access, because paying for that access stood in the way,” Dominic says. “So something had to change. We did a complete change. Not what we do, but how we do it.”
Hyrise no longer charges members who earn admittance to their accelerator a single dollar. Instead, they fully monetize their B2B placement services and provide sales organizations worldwide with fresh sales talent. Not only did this decision slash customer acquisition costs and significantly improve application rates, it allowed the Hyrise team to foster deeper relationships with their pool of partnering companies who continue to regularly hire budding sales professionals from the Hyrise community.
By monetizing other aspects of your learning business like job placement services, hiring fairs, or event attendance, you can take that burden of cost off of your members, lowering the bar for entry, but in turn, creating members who are likely to champion your product later.
But let's offer a counter to that thinking: Making your course or other features of your learning community free is a choice that should be made for a distinct purpose. Founder of Forte Labs Tiago Forte insists that there are other ways to increase accessibility to education in place of losing out on the income stream of paying course members.
“One implication that comes to mind is people often say ‘I want this education to be accessible. I want as many people as possible to have access to it.' And that's usually the objection to charging a high price. ‘Oh, I'm here to serve the world. I can't charge you a thousand dollars because I want more people to have access,' which, if you're only thinking about the course, then yes, that makes sense,” says Tiago.
As Tiago has found in building Forte Labs and delivering value to thousands of cohort members, monetizing your course could be the catalyst to creating an ecosystem in which you unlock access.
“Think about that ecosystem of products — for us, we're about to publish this book, Building a Second Brain, in 10 countries and languages around the world. A book is virtually free. It costs $15. Publishing books is the greatest money-losing enterprise I've ever encountered. Nothing about it is profitable, but why can we afford to do all that? It's because we have the course.”
Tiago shares “So the course subsidizes the book and now the book is going to market the course. It's one flywheel. Then with the revenue from that, we're turning it into a subscription community for people who don't want to ever be in a course. Some people just aren't interested. There's no reason that they can't also be educated, so we'll have the subscription product.”
There are several different approaches founders and operators can take in determining when to monetize and which aspects of their business to monetize. Testing different models and creating feedback loops that reveal deep insights about what's resonating for your members can help you discern how to best serve your members and monetize your learning community.
Try different pricing models to engage your community
Different pricing models lend themselves better to different learning communities, so it's always a good idea to test a few different models for paid communities (by cohort, entry class, or by segment of your membership) to see what works best for your current and potential members. You can continue to test pricing models over time, even as your community grows bigger and more successful.
You can continue to test pricing models over time, even as your community grows bigger and more successful, like the team at School16:
“We've actually had payment plan options for students from the beginning, but we've had to play around with the length of payment plan options over time. Like, what's a deposit that makes sense for somebody to make sure that they're invested in their education but also, if for some reason something happens they could still kind of defer to a future cohort and it doesn't break the bank for them? That's still an ongoing process,” says Vadim (School16 co-founder).
Here are some monetization models you can try:
- Tiered membership with different levels of access to content, events, and learning experiences. The more you pay, the more you get.
- General access is free, but you can pay an additional cost for premium events and learning experiences.
- Pay the cost in full once the goal is achieved (like getting a job that pays more than a certain salary).
- Pay cost in installments once the goal is achieved (again, when you land a job that pays over a certain salary).
You can even choose multiple options if it makes sense for your suite of offerings. The most important thing to keep in mind when pricing your learning community and the corresponding events digital products and learning experiences you offer is that establishing trust is the number-one objective.
“The goal of our pricing model is incentive alignment: if you're successful, we're successful. And if you're not successful, we're not successful. But there are certain costs with getting a student into the program, developing them in the program, and then supporting them in their job search that has to make financial sense for the business, or else we don't have a platform to offer. So now, we just have a fixed monthly payment once you land a job, earning at least $30,000 a year.”
Align your marketing efforts with community-building efforts
Pricing models are more than just a means of getting paid. They can be an effective customer acquisition tool in your marketing strategy to engage interested community members and bring them into the fold.
For example: Some learning businesses choose to offer free events or free intro courses to attract prospective members and then nurture them through the process of becoming paying members.
Coding bootcamps like Bloom Institute of Technology use their income share agreement model both as a payment method for students and a marketing tool to garner interest in paid membership. For prospective members, it can be intimidating to put your weight behind a program that promises they can help you change careers in a matter of months. By promoting the option of an income share agreement in their messaging, Bloom and other coding bootcamps have been able to market to a wider audience than they would if upfront payment was the only option.
Pricing is as much a marketing tool as it is a revenue-generating tool. Seth Godin, founder of altMBA, has used pricing in his past experience to not only differentiate but engage in community building.
“And so when we look at pricing, it has two effects: One is it gives us the revenue to do our work. But the second is that it sends a signal to people. So this is going to be a challenge in the online world [of learning] for a long time to come. Because if you say it costs $10 a month, for some people, $10 a month is too much. And for some people, $10 a month isn't much. Then there's this band in between where it's just the right amount to get people to care and to take it seriously.”
Setting the right price sends that message to your target audience from the very first marketing interaction they have with your brand.
Seth says, “I was the number one instructor on Skillshare for a while and you had to pay to take a Skillshare workshop. Completion was very high. Then, they switched to flat-rate pricing and a lot more people started and very few people finished but the workshop was exactly the same. What changed? What you felt like you had at stake.”
Pricing works both as a marketing strategy to bring prospective members into the fold, but it also works as a finishing strategy. When people are held accountable to the price they're paying, they're way more likely to finish what they started.
“I believe that going forward, one of the things we're gonna have is tuition, you have to pay to use this, Tiago shares. “But I think it's more likely that other forms of status and tribal connection are going to kick in so that you feel like you will be letting down a circle of people if you don't show up. And that thing of being missed if you're gone is so important to what we're trying to build.”
Find pricing models that reflect the value of your community and get people in the door who want to be there.
Consider the lifetime value of your members
Another important consideration to make as you determine ways to monetize your course is the lifetime value of a member. Qualtrics defines customer lifetime value (CLV) as “The total worth to a business of a customer over the whole period of their relationship. It's an important metric as it costs less to keep existing customers than it does to acquire new ones. Increasing the value of your existing customers is a great way to drive growth.”
While most founders and operators of learning businesses are focused on delivering the most immediately impactful experiences, it's important to consider ways to deliver and monetize value over time. Some courses charge a premium one-time fee or an annual fee for members to have lifetime access to the curriculum, others charge nothing or little in the beginning to lower the barrier to entry for their potential members, and then, once they've established trust and credibility, they promote their premium offerings.
To really scale your learning business, you need to seek out additional revenue opportunities beyond the initial offering of free content through your community, cohort-based course, or event series.
Monetize additional services or courses in addition to your base offerings
If you've made champions out of your learning community members, chances are, they're hungry for more.
You may want to consider creating additional offerings that members can pay for, whether it be an a la carte selection or a package of experiences. For career upskilling or reskilling communities, this could be additional career coaching or resume building. For other communities, it could mean additional workshops or courses or a chance to attend exclusive events.
Even better? You don't have to be the creator of these additional offerings to reap the revenue benefits and the benefit of solving more of and monetize your online community members' problems. Founder of SaaS Academy Dan Martell uses this example:
“Let's say Facebook ads are not something I do, but all my clients struggle with it. I'll go find a $3,000 Facebook ad course, and I'll bundle it with mine so that my ticket size now could be $5,000 or $7,000.”
Creating partnerships with others in your space is, according to Dan, the single most effective and lucrative channel that few founders of learning businesses use (and use effectively). It also gives you the power to create a holistic learning experience that touches every use case your member may face.
Whether you generate fresh content that current and past members can access for a fee or you create lucrative partnerships that your members can benefit from, this not only improves the lifetime value of a member — you're keeping them happy. Happy members tell friends and family how happy they are as a member of your community and, just like that, you've generated a referral engine that will support you in your customer acquisition efforts.