Today I’m going to help you think through how to price your online course, group coaching, or program so that it actually sells.
Let’s start with a scenario:
You’ve spend a big chunk of timing brainstorming, outlining, creating, filming, editing and producing content for an experience you hope to walk your ideal customer through. You’ve done the research, had the customer interviews, set up the platform and have even started to share bits and pieces of your content to start to create awareness around what you’re doing. But, you’re still stuck. You haven’t really launched yet.
You’re not sure what to charge or the price the internet is telling you to charge feels out of reach for your ideal customers.
Worried that you put all this time into a transformation you hope to walk people, who need your help, through won’t convert because your price is to high...or too low. You’d be ready for launch if only you found a price you felt was fair, reasonable, worth the time you put into the creation of this course and, won’t scare people away.
You go back to the warm embrace of internet research only to find there’s no real road map for pricing that matches the specialness of the experience that you’ve built. Sure there are pricing tricks and tactics for optimizing online sales but none of them really fit for you. There are no hard and fast rules that dictate "X" number of modules times "Y" number videos equals $"Z". You look to find comparable experiences only to find that prices for courses, programs and coaching swing wildly to virtually nothing to decent used car prices.
And now you’re here. Good! I’m going to help.
Here’s how you can think your way through going from flustered to selling. It’s a framework that helps you think through three very real cost concepts. It will also help you frame the value the work that you’ve done and reinforce the value you’re delivering in exchange for the dollars you’re getting.
The first thing to think through is opportunity cost.
The simple definition of opportunity cost is that it’s the cost of giving up something to gain something. When you’re thinking about the transformation you’re helping people through I challenge you to think of the capital R Real Costs that your ideal customer will continue to incur if they choose not to work with you. The more specific the better. Think about all the things you can actually quantify and how they impact people’s real lives. If you’re saving people time, money, helping them achieve something, work through a personal issue then, what does that mean for them in terms of the things your ideal customers really care about? Here’s an example: If your course is designed to teach someone something that will help them move their business forward faster what does that mean for that customer. Sure generic promises of more money and not wasting time sounds great but you need to go deeper and get specific. You need to do the work to really understand what’s motivating your ideal customer and why they even decided to start that business in the first place.
Here are examples of other questions to think through. Can you quantify time in dollars? Can you quantify what your ideal customer could do with the money instead of spending it on your experience? Can you draw inferences from readily available statistics from places like the Bureau of Labor Statistics, Census.gov, etc relating to consumption trends? Can you reinforce the missed opportunity for your ideal customer in terms of wasting too much time and missing an opportunity because they chose not to invest in you? Can you frame the intangible benefits of working with you that will help your ideal customer achieve success, however they choose to measure it, in a way that makes working with you the smartest alternative? Your ideal customer is giving up their dollars to get your experience, can you frame why that exchange is worth working with you over literally anything else they could be doing with that money?
The second thing I want you to think through are your ideal customer’s sunk costs.
This one can sometimes be a little easier to quantify. It’s the costs of time, money, and/or emotional energy already spent on trying different things to address an issue. If someone in your target market has tried other things to help them achieve their goals that haven't worked, read books, spent time trying to "figure it out" on their own but, constantly come back to the same feelings then you need to talk about it. There might be hard costs associated with using other professionals, medical costs, technology costs, etc that you can estimate for people before they get to you. You might not be able to exactly identify every single cost someone has incurred before they get engage with you which is why your narrative and communicating authentically and emotionally will be important. Going back to our business course example you might be able to identify the sunk costs of inaction for that ideal customer. Time that’s gone by that your ideal customer can’t get back. Staying with time it could the time associated with just being stuck in an endless learning and content consumption loop - how many hours of Gary Vaynerchuk have they watched and are still failing to launch? The ideal customer here may have already tried to hire a coach or invested in other programs or courses. These are all things you can build into the reasons why interacting with you will help your ideal customer actually solve their problem this time.
The last cost concept I want you to think about are the comparative costs.
This one will require you to do a little research and really stretch your understanding of the kinds of substitutes that exist for your offering. From the perspective of your ideal customer there are almost an endless amount of available substitutes they can engage with. Everyone in every market has competition and that competition is also vying for the discretionary dollars of your target market. Your goal is to figure out where you stack and if possible position yourself in a way that makes you the better choice among your competitors. That might mean you’re a little cheaper, your solution walks your ideal customer through a transformation a little faster, or the resources your offering are comparatively a little more robust. I want you to think about comparative costs like bumpers in a bowling alley. They’re there to make sure that even the worst of balls thrown don’t end up in the gutter and missing all the pins. These bumpers will help you avoid pricing too high or too low. Using our business course example again, what real substitutes could someone buy to get a comparable experience? Are there books? Low cost courses on giant e-learning platforms? Similar practitioners with similar offers (possibly with more digital clout than you)? Digital tools that offer the same kind of promise? Free services like SCORE or other incubators that offer resources? Are there national averages or studies from reputable places that can quantify the value of working with someone like you one on one? What about more traditional professionals like attorneys and CPA’s also offering business advice? How do you stack up against the Tai Lopez’s of the internet business growth hacking world? These are all questions that you need to ask because it will help you assess the wants, needs, and the willingness and ability for people to consume your stuff in that market. Don’t forget to think outside the box too. The ideal customer in this example could also be thinking that opening a brick and mortar location will solve their problems so you might need to factor in the real costs of opening a physical location against what you’re trying to help them achieve. See, it can definitely end up being a bit of rabbit hole.
Don’t get lost though you’re almost there.
At the end of this process you’ll have notes and thoughts shooting in all kinds of directions. Ultimately what you choose to charge is up to you but, it should fall somewhere in between or close to what people are already willing and able to pay, what they’d expect to find out in the world, and a bargain compared to the cost of not working with you. To wrap this up with our business course let’s just do a simple accounting of what super basic research might yield:
Opportunity Cost - Years of trial and error, lost customers, less time with family, sinking savings into a slow growing business, forgone interest if just invested that money in a CD, etc.
Sunk Costs - Failed previous coaches, purchased sales management software that didn’t work, books, curated mastermind group, other ecourses, etc.
Comparative Costs - Business Attorney, CPA, Free SCORE, other courses, similar coaches, related coaches/consulting promising same results, etc.
Summary - Your business course promises to cut the growth time in half over using other professionals and shorten the learning curve for your business. Pricing might be somewhere between the cost of spending the same time working with a traditional professional service provider using average hourly rates to get a baseline to the upper ends of what the internet business gurus are charging. Here’s where knowing the ins and outs of your ideal customer really matters in terms of where they are in their lives, where they are in their business journey, and, the real value you’re providing when it comes to getting close to figuring out what they’d be willing and able to spend.
The goal is that you have to use all three of these to tell a complete story and position your offer in the best possible pricing light. Depending on your offering and your target market this process could be really easy or really challenging. That won’t slow you down because at the end you’ll not only have a price that you believe in, you’ll have a price you can justify. Regardless of the words that come out of people’s mouths when it comes to spending or what the news says about the economy; it’s a tried and true fact that people will always spend money on the things they believe are worth it. Seriously, in economics it’s all those conversations around inferior goods, normal goods, and price elasticity of demand. I’m saving you from having to flip through old text books or watch Microeconomics YouTube videos because the moral of the story is that your prices are communicating that you’re the best option to help them achieve their goals.