We could go down quite a rabbit hole when it comes to pricing but let’s just start by making one thing REALLY clear: Pricing a digital product (like an online course) is mostly arbitrary.
There are no hard and fast rules for pricing. The value of something is only dependent upon how much a person is willing to pay to have it. The only way to know what someone will pay is to start with something, offer it at a price, and see how “the market” responds. (You get a bit better at being able to predict these things the more products you release.)
That being considered, here’s one way to approach the somewhat arbitrary art of pricing. We like to think of it as a game called Target/Higher/Lower.
The basic principle is to start with a target number extracted from your revenue goal. Remember back in Lesson 1, Part 2: Managing Expectations when we had you do this?! We had you write down a target price based on a goal of $500 and converting 2% of your email list into purchases. If you have 300 email subscribers: 2% is 6 purchases, and to make $500 with 6 purchases, your course would have to cost at least $84.
Ugh, MATH. We know. But this gives you a place to start. Once you have your target, THEN you use these 5 considerations to decide whether to go higher in price or lower in price from your target.
Here are the five considerations:
ONE: Consider the value you’re adding to your customer’s life.
Ask yourself, does your mini-course help someone make money? If yes, then you can probably charge a bit more for it because of the built-in ROI for your customer.
For example, Jason’s first online course was How To Get Sponsorships For Anything. He knew if a customer followed all the lessons and tactics in the course they would at least land a $500 sponsor, so he priced the course at $500 when it launched! If we were using the example of the $84 target price point, this consideration might encourage us to go a bit higher because of the direct monetary return for our customer.
TWO: Consider the financial position of your ideal customer.
This is why we had you define your ideal customer in lesson 2. It’s important you know a bit about who this person is and how much money they might be willing to spend on learning.
For example, when Caroline launched her first course back in 2014 on hand-lettering, she knew the course was tailored for beginners who just wanted an extra creative outlet like moms and young adults. These customers didn’t have a ton of cash lying around for hobbies, so she priced it super low at $20.
THREE: Consider how the customer’s expectations will align with your course content.
More content inside a course does not necessarily mean charge more money. But you do want to be realistic about how much effort and value you’re packing into your course and if that aligns with the expectations set by your price point. If your target is $84 but your three core lessons are brief without any helpful resources and the specific outcome isn’t directly tied to an ROI, that’s probably a reason to lower the price from your target.
Which brings us to the next consideration:
FOUR: Consider the price of courses on similar products.
(This especially pertains to courses that teach a hobby or skill.)
This advice also relates to the expectations of your customer. If what you’re teaching is more of a commodity—that is, something that doesn't have a particularly proprietary process or method and many other people are teaching something similar—you need to do some research and check out what similar courses are going for online.
If we go back to our ongoing example mini-course of helping someone create a debt-payoff plan, that relates to the second piece of advice (teaching a skill). While the topic is related to money, it's not about creating additional revenue. In this case, you’d want to find 5-10 smaller courses about creating a debt-payoff plan and calculating the average price across them (this is the current market value).
FIVE: Consider going with your gut and what you will be confident promoting.
This is the final consideration, but it could be the one that trumps them all. Truthfully, the success of your mini-course sale is dependent upon your confidence in promoting what you’ve created. Ultimately, adjust your target price based on what your gut tells you and charge the amount that you confidently feel your mini-course is worth.