Posted by Ann Fuerst, Ph.D., TCC Chief Learning Strategist
This the next post in a multi-part blog series on the business benefits of training an external audience.
Pricing Strategy
Pricing strategy is a way of finding the price of a service or product offered by a competitive organization. Along with other components such a product, place, promotion, competition and market demand, it helps in estimating the profit for a company.
Calculate the Cost to Create the Training
To provide efficient training, overall cost of the service provided must be calculated at the outset. Certain factors such as the content of the course, compensation of instructors if used, the cost of promotion, advertisements etc., must be calculated in order to avoid compromising on quality of the training provided and to ensure a profit for the company.
Understand the Competitive Landscape
As the saying goes, “keep your friends’ close but your enemy’s closer”. To estimate the success of a course the marketing tactics of rival companies should be researched and understood. Find out their strategies, the pricing, the packaging and essentially the methodologies used to sell. This will help you assess your competition and how best to offer your course.
Estimate the Demand for Your Product
Know your target audience. Find out if they are interested in your product. The demand will be based on how necessary it is for them. There are two approaches to this:
- Bottom up: Here, the demand is estimated based on presumed calculation and rationale.
- Top down: The calculations are made based on affordability, accessibility, ability to use, and awareness.
Feedback from the first few customers will help you understand the future prospective of your service. Another factor to consider is market growth. If your course fails to grow according to the general market growth of that time period, it will be a loss for your company.
Experiment with Packaging and Pricing
When you walk into a store to buy clothes, you would always buy something that looks the best amongst the available options but at the same time which is within your budget. The same principle applies in products and services. To attract more customers the packaging should be different than what is available in the market but at a price which is not heavy on the pockets. It is important to remember however, that the pricing cannot be set too below the competitive price which might lead to a price war and a loss for your company.
Here are some pricing options to consider:
Free trial
This includes a limited period of unpaid access to courses after which a price must be paid to continue. The accessibility of the course can also be limited in a manner that allows the customer to utilize the course for limited chapters or accessibility to certain courses for a period.
“Freemium” or Sneak Peek
Freemium is a clever approach to selling a wherein basic content of the course is provided for free whereas advanced content would require the client to make payment (premium). Most digital products are sold this way.
Subscription-Based
This model has been shown to generate higher profits and increasing customer flow. It is one of the most commonly used models for ecommerce. There are two main types:
- Recurring Orders: The client can pay for the same set of courses at regular intervals which allows for retention of clients. They can be motivated by being given discounts on subsequent purchases.
- Curated collections: Based on their purchase, other products on the same or similar topics can be suggested.
Pay Per View (or Course)
The client can pay for courses separately based on their requirements. This erases the profit made on bulk orders but allows for exclusivity.
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