You’re getting ready to launch a brand new online course or webinar series for your members and there’s just one last thing to do – decide how much you will charge for it. Should you charge at all? Maybe you should charge non-members one price and offer a discounted price to members. How do you decide what is a fair price for your association’s eLearning? Here are a few important things to keep in mind when pricing membership education.


Perceived value

Pricing membership education

The first consideration you should make when pricing your association’s online learning is how much value it offers your members. We all understand that highly relevant, well-produced learning has a higher perceived value to your members than very generic, poorly produced content that offers little expert knowledge on a topic. When content is interactive and audience specific, it helps drive the perceived value to learners and can yield a higher return for the association. To improve the perceived value of your learning, focus on creating quality courses that help your members solve a problem. Whether they need to learn a new skill or earn continuing education credits, your courses should help them meet their goals in an aesthetically pleasing, interactive way that appeals to their learning style.

A lot of associations make the mistake of assuming that online courses are somehow less valuable to their membership than instructor-led experiences and thus underprice them.  The truth is, eLearning is just as valuable, if not more so to your members than traditional place-based training. It’s all in how you promote the product to your members, no matter the method of delivery. Focus on the convenience to your members, who can participate in education opportunities from the comfort of their home or office, without the hassle of traveling or added expense of missing work or paying for gas. Additionally, self-paced eLearning, recorded webinars or recorded conference sessions offer even more convenience, enabling learners to access the content on their schedule and to pause, resume or restart the content at will. Never assume that these added conveniences don’t add value to your course; they do, and it is wise to remind your members of that when it comes time to market your course.



The next factor to consider is how much competition exists for the type of education you plan to offer. Look to see if another association, university or training provider offers a similar course. If there are few alternatives for the course you’re offering, your association has an advantage and can generally charge a higher premium for the content. However, if there are many free or lower cost alternatives to the course you’re offering, the value will be greatly diminished. The basics of supply and demand are certainly true in the education business. If there is an abundant supply of similar courses and/or limited demand, you will be forced to lower the price of your eLearning to compete with other offerings.

If you determine there are competitors in your space, you will want to research their offerings, their pricing model and who they’re targeting. Is their course more general than yours? Does it offer the same number of continuing education credits as yours? Is the course offered in an online format? Can anyone take their course, or is it restricted to students or members? Use the answers to all of these questions to help you determine the value of your offering compared to those of your competitors.


Profit margin

Another common mistake associations make when pricing their eLearning is not understanding or measuring their profit margin. Profit margin is the difference between what it costs to produce and deliver your course and what you’re able to sell it for. Ideally, you should determine your desired profit margin before you even begin creating your course. If you know you need to achieve a profit margin of 30% or greater to satisfy your Board and build a case for doing more eLearning in the future, you should keep that number in mind as you determine your budget for the course production and the price you intend to charge for it. Your goal should be to work within a reasonable budget that enables you to charge a fair price for the course while achieving your desired profit margin. You can achieve this by staying in budget on your project and finding ways to add value to your course, enabling you to charge more for it.


Sales volume & selling price

Part of the equation when calculating your profit margin is the volume of course sales you anticipate making. To forecast your volume of sales, first determine the potential size of your market by evaluating your membership and any non-members who would benefit from your course. The sum of both groups represents your potential market; however, it’s important to be realistic about the number of people who will be willing and able to purchase your course. You might decide that a conservative estimate is that 10% of your potential market will purchase and participate in your course.

So, if 10% were to purchase your course, what would you need to charge for your course to cover the production and delivery costs and achieve a 30% profit margin? Let’s say your association has 10,000 members and you estimate another 500 nonmembers would benefit from your online course. If 10% purchased your course, your sales volume would be 1050. If the total cost to produce and deliver the course were $30,000, you would need to price your course at $40.95 or higher to achieve your 30% profit goal. We arrived at this number by calculating our selling price using this formula:

P = C x 1.43325 / V

Where P is the selling price for the course, C is the cost to produce and deliver the course ($30,000), and V is the volume of courses we expect to sell (1,050). 1.43325 is the mark-up factor used to achieve a 30% margin.

$40.95 = 30,000 x 1.43325 / 1050

Think you could convince a larger percentage of your potential market to value your course at say, $29.95? Let’s see what your sales volume would need to be at this price to achieve your goal of 30% profit margin. We’ll use this formula to calculate the sales volume needed at the new price:

V = C x 1.43325 / P

Where V is the sales volume, C is the cost to produce and deliver the course ($30,000), and P is the course selling price ($29.95).

1,436 = 30,000 x 1.43325 / $29.95

So, you would need to sell an additional 386 courses or 3.68% more at the lower selling price to achieve the same profit margin.

No matter how you decide to price your online learning, remember it is always easier to lower the price if sales aren’t what you thought they’d be than it is to raise prices later. Leave some flexibility in your course price to allow for occasional special offers, discount codes and member-only pricing


Average price for association eLearning

It goes without saying that eLearning prices vary tremendously from one association or course title to another. So, what is the average price per content hour for association eLearning? According to the Association Learning + Technology: State of the Sector report from Tagoras, the average price per eLearning content hour in the association sector is $56.79, while courses that offer continuing education credits average $73.97 per credit hour.

Correctly pricing your association’s eLearning is critical to your program’s success and an area many associations struggle with. In the coming weeks we will be teaming with the folks at Tagoras to bring you even more information and tips for valuing your association’s eLearning.


Pricing Your Association Education Products
Join us March 6, 2014 at 1:00PM EST for a free webinar, How to Price Education Products, presented by Jeff Cobb and Celisa Steele from Tagoras and Jack McGrath from Digitec Interactive.

**NOTE** THIS EVENT HAS ALREADY TAKEN PLACE. We invite you to WATCH THE WEBINAR RECORDING of How to Price Education Products at Your Association.


We will also be publishing several additional posts on the topic in the coming months; subscribe to the Association eLearning blog so you never miss these informative posts.

Coming up on the Association eLearning Blog:

Pricing Your Education: Where is the Sweet Spot

How to Compete with Free eLearning

Ready to find out what Digitec can do for you?