Welcome (Part 4 of 5): Setting a solid pricing strategy.
Now that you’ve got content, courses, products, and good descriptions in your LearningCart site, let’s talk a bit about strategies for effective pricing.
You should begin by thinking about where your online courses and products fit within your overall business by asking yourself a few key questions:
- Do you have offline products as your primary offering, and your online products are really about lead generation for in-person events or something else?
- Are your online courses an independent product with their own customer profile (persona), different from those who might purchase your other products?
- Are your online courses your primary or only revenue source?
If you answered “yes” to #1, for example, you may want to have your online courses function as primers for your in-person events and offer them at significantly reduced rates. A good pricing strategy may even be to offer the cost of the online, “primer” module as a discount toward the registration cost of the live event.
Also, for #’s 2 and 3, the length of the course — depth of content — and certifications offered will also help demonstrate value and therefore may help rationalize a higher cost.
There are two basic challenges to consider:
- If you charge too little for a stand-alone course, you will risk eroding the perceived value of your course. This obviously diminishes your revenue opportunity and marketing abilities.
- If you charge too much you may have to reduce your price. This has the potential for poor “optics” to your customers, devaluing it in their eyes. (If this happens, it may be better to offer periodic sales)
One of the most important questions to ask yourself in a pricing context is, “Am I a premium brand or a value brand?” There’s no wrong way to answer this, per se, but how you answer will help lead you to both write appropriate website content and product descriptions, and price your products accordingly. Both can offer valuable content. But, if you’re a “premium brand” you may be perceived as having less competition, but you will likely have lower transactional volume (sales) but at a higher pricepoint. If you are a “value brand” it’s the opposite; you may have higher sales volume but at a lower price-point.
In either case, you will need to consider how pricing affects your website’s content, product descriptions, and your marketing and advertising efforts.
Setting Pricing Attributes for Products
LearningCart also offers detailed pricing tools to help you organize your product’s pricing. When setting your products price, you will complete the following fields:
- Price Name: The name of the price that will be shown to users. It is recommended you use a descriptive name so users understand the option they are selecting (e.g. 1 month access, 6 months access, CD, DVD, etc.).
- Unit Price: The price that will be charged.
- Generate Registration Codes: If this is a virtual product (e.g. a digital file or SCORM module) setting registration codes to “Yes” will allow the purchaser to purchase multiple seats for their users. Upon completing their purchase the purchaser will get access to a series of registration codes (1 registration code for every seat they purchased) that they can distribute to their users. These registration codes will allow users to visit the LearningCart site, create an account, and access the appropriate content. Note that if 1 unit is purchased it will automatically be assigned to the purchaser. If greater than 1 unit is purchased all the units will be provided as registration codes.
- Recur (for months): For recurring billing, enter the number of months the charge should be billed after the initial billing. (Authorize.net users only)
- Trial Period (days): Enter the number of days before a user is automatically billed. (Authorize.net users only)
- Duration: For virtual products this specifies how many months the user will have access to the content. The default value is 0 which indicates unlimited access.
Who doesn’t love a good sale, right? But wait, there’s more…
Incentives and pricing for your customers should be driven by your marketing and pricing plan. And, LearningCart offers a number of powerful tools to help motivate customers.
The Bulk Discount feature allows you to set the price for a product based on quantities ordered. To create a Bulk Discount:
- You must first add a Product and create a Price.
- To add a bulk discount, from the Product Prices tab, select the Bulk Discounts link for the price the discounts will apply to.
- Click the Add Discount button. Enter the Minimum Quantity, Maximum Quantity and the Price for that level and click the Add button.
- To delete a price level on the Bulk Discount page, click Delete. You will receive a confirmation message. Click OK to delete the Pricing Level. Click Cancel to keep the Pricing Level.
When you have finished adding bulk discounts, click the Return to Product button and click the Save button on the Product Details tab to save your changes.
Discount codes offer you the ability to create discounts of various types which you can then use in advertising, email campaigns, and other types of marketing:
- Multiple use discounts are calculated by applying the discount on a per unit basis.
- A Single-use dollar discount is applied across the entire order (not on a per unit basis).
- A Single-use percentage discount is applied to a single unit of the highest value product in the order.
You should also think about discounting strategies when establishing your pricing mix. For example, you might upsell durations where a customer can buy six months of access to a course for $500, but 12 months of access for a reduced rate of $800. Many customers will purchase extended access during checkout but will not renew later, so there’s a greater revenue opportunity at the time of sale only.
Please note that LearningCart does not allow Discount Stacking - if a Customer also has a membership discount set up additional discounts will not be applied.
For flexibility, our system will allow you to create multiple discounts using the same code. When a user pays for a product, as long as they have one of the qualifying products in their cart, our system will be able to detect there is a match for one of the discounts created and apply it appropriately.
And, as always, if you have questions or concerns, do not hesitate to contact us. We’re here to support you and we’re excited to see you grow!
In the next and final post, we’ll talk about a few final concepts and get you selling your online training, products, and events »