Selling online courses is a lucrative business model but effective online course pricing is key to success. In this post, we’ll explore critical online course pricing strategies for maximizing both profit and audience size when selling your knowledge products.
You’ll discover how to align price with value perceptions through psychology and messaging. This is it! You are talking to your clients at the very end of your funnel!
We’ll cover research-backed formulas for calculating an earnings-optimizing “sweet spot” price point. You’ll also learn sales funnel best practices for extracting maximum value from prospects through tiered offerings.
Follow along for actionable techniques to help you confidently price and promote your online course. Whether you’re just starting out or looking to improve conversions, this post will illuminate the art and science behind pricing for customer magnetism and revenue growth.
The goal is equipping you with a framework for unlocking the secrets of pricing done right. Off we go!
Showing Value Via Your Online Course Pricing
When I first started creating my online business coaching course, I struggled with pricing. I wanted to make it affordable but also communicate the immense value packed into the content.
I realized the price itself shapes perceptions. A higher price signals "premium" while a lower price means "budget." I decided to position my course as the former.
Though counterintuitive, a slightly higher price attracts more ideal customers. Those who invest more are more engaged. And perceived value actually increases at higher price points.
I settled on $149 as the perfect price. It turned out to be a very lucky guess. This price says "I'm worth it" without deterring buyers.
If you are still trying to tinker endlessly, seeking perfection, my advice is - experiment fist, perfect later. To avoid you having to guess let's step through the thought process that illustrates why this price point works do well.
Hacking Pricing Psychology to Rocket Online Course Sales
Our brains love shortcuts. When evaluating value, we lean on assumptions and rules of thumb rather than rational calculations. Successful marketers ruthlessly exploit these mental loopholes.
Take anchor pricing. This tactic displays a higher “original” price crossed out with the “sale” price in bold. Even though the original was never real, that higher anchor sinks into buyers’ minds. Suddenly the lower sale price seems like a steal!
For my course, I tested two options:
- Flat $99 price
- Start at $199 with $149 sale pricing
Despite identical the first being cheaper, Option 2 outperformed by over 23%! That crossed-out $199 anchored perceived value higher.
Another hack is charm pricing with odd numbers like $49 or $99. Ever wonder why everything is $X.99 instead of rounded figures? Something feels more enticing at $99 versus $100. Weird but true!
You will also discover that your conversions significantly change once you cross the magic $X.99 barrier.
The takeaway is that pricing has more to do with emotions than math. To paraphrase the sales expert Zig Ziglar once said, “People don't buy logically, they buy emotionally.”
To leverage this, test options that play up value. If a higher anchor point lifts conversions, use it! Find charm price sweet spots ending in "9". Tiny tweaks here make a big revenue impact!
Pinpointing the Optimal Online course Pricing for Profit Maximization
Pricing is a delicate balancing act. Set your price too high and fewer people buy. Too low and you leave money on the table. The goal is finding the peak of the bell curve that maximizes both profit margins and total sales volume.
When I launched my Blogging Cash Course, I mapped out earnings projections across multiple price points. Here were the scenarios (I am rounding numbers to illustrate it):
$47 price point
- 100 sales per month
- $4,700 total monthly revenue
$97 price point
- 70 sales per month
- $6,790 total monthly revenue
$197 price point
- 30 sales per month
- $5,910 total monthly revenue
While $197 maximized per-sale profits, the drastic audience drop slashed overall earnings potential. And I'd need a certain customer base size to facilitate word-of-mouth and organic growth.
$97 turned out to be the “Goldilocks” sweet spot balancing healthy margins with volume. My mistake was, I have not experimented more. The step from $97 to $197 was too great and that messed with my conversions. Watch my video, to see the full picture.
I determined this using a simple Excel model tallying projections under different assumptions. You can—and should—run similar analyses when pricing your offerings!
Remember, optimizing for both profit margins AND audience size takes testing and number crunching. But do it right and your bank account will thank you big time!
Why Your online course Pricing Matters
Online course pricing carries weight beyond dollars and cents. It directly impacts brand perception, customer satisfaction, and yes—your bottom line.
As you raise prices, expectations change. A $1,000 course better provide more value than a $100 one. This means higher production quality, more robust support channels, and real transformation for those who enroll. You are offering an experience, not just text on a page.
The ability to deliver at various price points will be reflected in the reviews you get.
Price point also affects the types of students you attract. Budget seekers likely won't purchase premium offerings (and vice versa). I wanted to serve aspiring solopreneurs ready to invest in their success. My $149 course filters for this crowd.
The online course pricing framework shapes everything from student outcomes to your growth trajectory. Choose wisely!
Recap: Online Course Pricing Thresholds
Pricing isn't just about math—psychology plays a huge role. Odd numbers like $47/$49 or $97/$99 feel like deals vs round numbers.
Understand what are the major psychological barriers in your field and stay JUST below them. Price points just under $100, $200 or $500 are more attractive than hitting those figures exactly.
At the same time remember your conversion rate will change ever so slightly if you are charging $41 or if you are charging $49. Always opt for the highest price in the range.
Determining these subtle nuances takes testing. Pay attention to dropout rates as price increases. If you see a dramatic fall just above key thresholds, you’ve found a psychological price barrier to leverage!
The key is uncovering assumptions and perceptions that impact perceived value. Price accordingly and watch sales accelerate.
Another consideration when online course pricing decisions are made is that past a certain threshold sensitivity to price drops. When you are in the $2,000+ game, your audience are no longer penny pinching - they are investing!
This is where $2K or $3.5K prices are rarely command changes in conversions. However, you and your team (yep, this is no longer a solopreneur territory) better deliver. The expectations for content, service and delivery are very high here.
Optimizing Your Sales Funnel and Online course Pricing Strategy
Beyond one-time purchases, it’s important to map out a full sales funnel that converts interested visitors into happy, paying students.
Online course pricing plays a role at every stage—from lead magnets to upsells after purchase. The key is balancing price and audience size retention at each phase.
For example, I offer a free quiz assessing business readiness. This filters out tire kickers upfront while capturing subscriber leads for further nurturing. It’s about giving value before asking for money.
On the back-end, I upsell course graduates on one-on-one coaching at $500/month. This premium offering locks in higher-paying clients already invested in my teachings.
Taking a funnel approach enables servicing students at multiple price points with tiered offerings. But it hinges on nailing that initial hook with a strong lead magnet or core product value proposition.
Crafting Value-Based Marketing Around Your Pricing
Setting the right price is step one. You must also communicate the value it represents through messaging and positioning.
I spent just as much time crafting sales copy, emails, and ads around my $149 course as developing the product itself. The goal was framing it as an investment in a better future, not merely an online program.
This “pre-selling” shapes buyer expectations to justify pricing before they ever click purchase. It’s about telling the right story—one backed by real transformation for those who enroll.
In closing, pricing and marketing intertwine. Make sure both hit the mark or risk leaving money on the table.
Conclusion
Finding that "just right" pricing sweet spot is part art, part science. You want to maximize both revenue and audience size retention at each phase.
For my online business course, I settled on $149 as the magic figure—confirmed through multiple pricing experiments. This optimizes earnings while attracting my target market of aspiring solopreneurs, who have spend 10+ years in corporate careers.
I also layered in psychological pricing tactics like charm pricing and threshold avoidance further down the funnel. And I wrapped all this in messaging conveying the immense value students receive.
The result? A premium course that sells itself at a healthy price point. This fuels a self-perpetuating flywheel—happy students drive referrals for new leads while residual income funds ongoing refinement.
To wrap things up: don’t underestimate the power of onine course pricing done right. Find your magic number, communicate its value, and watch your business take off!