Trying to figure out how to effectively price educational offerings is something many learning businesses struggle with, even under normal circumstances. But now that we are in the midst of the coronavirus pandemic—putting us in far from normal circumstances—it makes decisions related to pricing even that much more complex.
From how to price conferences or seminars that have been abruptly shifted from face-to-face to online delivery, to whether your organization should lower prices given the existing challenges people are facing, there are naturally a lot of questions related to pricing.
That’s why in this episode of the Leading Learning Podcast we’re offering insight and resources to address questions related to pricing educational products during the pandemic. We discuss key questions learning businesses need to ask themselves and consider, the various alternatives for pricing, and how to ensure sustainability, regardless of your approach.
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Listen to the Show
Read the Show Notes
[00:18] – A preview of what will be covered in this episode where Celisa and Jeff consider questions related to pricing educational products during the coronavirus pandemic.
Reflection Questions
[00:55] – You might consider the reflection questions below on your own after listening to an episode, and/or you might pull the team together, using part or all of the podcast episode for a group discussion.
- Which of your offerings are unique, fast to market, and/or able to bring together people for their mutual benefit?
- In a change to online, in which of your offerings can you sustain or improve on that uniqueness, speed, and ability to bring learners closer to others?
Pricing Resources
We’ll also encourage you take advantage of numerous resources related to pricing that we have published on the Leading Learning website.
A great starting point for that is our blog post, “How to Price Online Learning”. From there, you will also see links to several other posts that form a sort of mini-curriculum on pricing (links also below).
Additional Pricing Resources:
- Pricing Educational Products, Part I
- Pricing Educational Products, Part II
- 3 Axioms of Pricing Education Products(Video—featured below)
- Effective Pricing Practices(Video)
- How much does it cost to create e-learning
- How to Price Online Courses – 10 Tips from 20 Years of Experience
Our Perspective on Pricing
[01:51] – You’ll be able to tell from the above posts – and many listeners are already aware – that we have clear perspectives on pricing and it would probably be good to state those up front as way to make our way into this discussion.
First, our view is that pricing is as much about perspective and perception as anything else. It is a form of communication, and it directly impacts customers’ expectations and behaviors in both the short term and the long term. So you really need to proceed with caution when it comes to pricing.
Second, pricing needs to be strategic—something built into product strategy from the very beginning, not tacked on at the end. To the extent that you are changing a price, we encourage you to back up and treat an offering as if it is new and get clear on answers to questions like:
- What are your objectives for it?
- How will it ideally be positioned and perceived in the market—particularly in relationship to any substitutes or alternatives?
- Where does it fit into your portfolio? Note the Value Ramp is a tool we have that can help with that as it helps you get clear on the relationship between value and price.
Third, pricing should be based on value—not on cost or purely on what the competition is charging. If you are going to charge—and there may be good reasons not to—then what you charge should align with your customers’ perceived value of the offering. To the extent that you deviate from pricing based on value, you need to have clear reasons (again, be strategic), and you need to communicate those reasons more or less directly to your customers and perspective customers.
What Are the Considerations?
[04:21] – So with that strategic perspective on pricing we just shared in those three points, we have three tactical considerations for pricing we want to offer.
1. What’s the value in your current offerings?
You have to honestly, objectively assess the value. To help you do that, we’re going to reference a Seth Godin post from 2009, and we want to thank Dave Lutz of Velvet Chainsaw for reminding us of this oldie but goodie.
But here’s the most relevant bit from Seth’s post, which addresses the impact of free offerings in the market. Competing with free was a newer phenomenon back in 2009, but it’s still relevant now and becoming further exacerbated by the economic hardships being created by the novel coronavirus.
People will pay for content if it is so unique they can’t get it anywhere else, so fast they benefit from getting it before anyone else, or so related to their tribe that paying for it brings them closer to other people.
So to help you answer the question, “What’s the value in one of your current offerings?” think about those attributes Seth Godin highlights as reasons someone might be willing to pay: uniqueness, speed, and ability to bring them closer to others.
2. Can you sustain or improve upon that value in going virtual?
Part of this is considering how you’re going to bolster value or value perception—and this applies whether you’re doing face-to-face or online. So this means objectively assessing your answers to questions like:
- Are you getting truly unique content? What makes it unique? If you Google your major session topics, how good are the potential alternatives to your content that come up? Have the speakers you’re using delivered the exact same content before (in places where your audience is likely to have accessed it)?
- How timely is it? How far ahead of the curve are we, if at all? We agree with Dave Lutz’s point that “You can no longer do a call for sessions six, nine or 12 months out and expect to be fast, first or unique.”
- Have you fostered a community that can’t be found anywhere else?
- Are you committed to investing appropriately to ensure a really high-quality, impactful experience?
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- Are you designing for effective learning?
- Are you actively working with speakers and session leaders to ensure they are engaging and effective?
For related helpful resources, see:
- An Essential Guide to Andragogy for Learning Businesses
- On Learning Well: A Practical Look at Metalearning for Learning Businesses
- 7 Metalearning Moves to Empower Lifelong Learning
[08:58] –
3. What’s your existing relationship with your audience?
Do you have a strong enough relationship that the moves you make will be understood and appreciated—i.e., are you viewed as a trusted authority, a go-to resource for your learners? Have you engaged in building relationships, not just managing transactions?
We’ve stressed this before and it’s important for any business – especially if you’re in the learning business – you have to be building those relationships over time. It’s not just about getting people into seats, getting the registrations, or getting the enrollments—you need to take time to communicate with and understand them. And this is a good time to have an understanding of your brand and how it’s perceived out there in the marketplace because this is going to be important as you start to make moves around pricing.
What Are the Alternatives?
- Go free as a goodwill/philanthropic gesture—a special one-time/limited time move based on the special circumstances that we have right now. And if you do have a strong relationship with your customers/audience, this can be a great time to make this type of move.
As an example, the American Speech-Language-Hearing Association(ASHA) basically enrolled 211,000 ASHA members, for free, in their CE subscription, through June 30, 2020. And Jack Coursen, associate director for professional development at ASHA, wrote in our community and on LinkedIn that, “you just need to find a true message that resonates with most of your members, especially those who are your main customers.” He actually said this more about holding the line on charging, but it definitely applies to how you position going free.
- Offer a deep discount as a goodwill/philanthropic gesture—a special one-time/limited time move based on special circumstances. If you’re going to take this approach, there are a few things to keep in mind:
- First, discount deeply enough that it will be noticed and that it matters—as a rule of thumb, this is generally going to be by at least a third.
- Don’t change your published price, especially if this is something already offered. Instead, we encourage you to have a published price that’s at the level you’ve offered before—or the level you’d anticipate offering going forward if it’s a newer offering—and then offering scholarships or discount codes that people can use.
Related to all of this about going free or discounting, we are imagining that budget cuts are coming. And we’re probably about to hit a period when demand elasticity—which typically is not high for educational products—is going to rise significantly—i.e., enrollments will be much more impacted by an increase or decrease in price than usual.
That said, we’re hesitant to lower prices simply because it’s going to be hard to know when the timing is right to raise them again, and people will inevitably become used to the lower pricing. We think it would be better to keep published prices the same and either:
(a) make scholarships widely and easily available for any individual or [organization] who needs them or (b) issue a certain amount of credit—e.g., in the form of a code or codes—that can be used to get a discount when enrolling in training. You could do this for every individual member or give organizational members a certain amount of credit to distribute to their employees as needed.
We think actually issuing codes to every member/customer could be quite powerful—incredible good will and it might get a lot of people to participate in training who might not otherwise.
While this essentially amounts to the same thing as lowering prices, it will be perceived very differently and makes it easier to revert to normal pricing when the time comes for that.
[16:01] –
- Go free as a permanent move. But be sure you have a clear plan for how to sustain this (more on this below).
- Permanently shift price based on value shift. Mostly thinking about down, but possibly it could be up. Do this when:
- Based on honest, objective assessment, you decide the current virtual offering or source offering (e.g., existing conference, seminar) isn’t really as valuable as previously thought (and probably hasn’t been performing well in the market).
- The virtual offering is significantly different from the F2F (or is a significant reconfiguring of existing virtual) and the differences change the value.
How Can We Ensure Sustainability?
[17:28] – In all of this, of course, is the idea that whatever is done in terms of pricing now, the long-term approach has to be sustainable. We know that revenue is the lifeblood of a learning business. And whether that revenue is profit or reinvested into the mission of the organization, it’s important, as it keeps the organization in a position to keep offering existing and developing new learning experiences.
One aspect of sustainability that we haven’t yet touched on is sponsorship—and we know that there are a lot of concerns today about how to move sponsorship and exhibitor fees from place-based offerings to online offerings.
The truth is, this probably isn’t going to be easy in a lot circumstances, but it’s going to point to something that probably needs to happen anyway and certainly over time, and that’s simply building much stronger sponsor relationships, building much stronger (in most cases) corporate-type relationships with those vendors who might be supporting your field or industry.
Dave Lutz says and we (mostly) agree that,
We [Velvet Chainsaw] don’t believe the exhibit booth model transfers well to a virtual or digital experience. Sponsorship, however, can be significantly leveraged as long as you are able to attract a good audience. As a general rule, build your model with fewer, but bigger sponsors, not micro-investors.”
However, we believe that exhibits can work in the digital environment but it is tough and does require building that relationship with the companies that are going to be exhibiting and really thinking through what the model is that’s going to provide value.
When we’ve done this, we’ve provided demonstration sessions and that’s tended to be much more valuable than trying to emulate that face-to-face booth experience—which in our experience (and what Dave Lutz is probably referring to) hasn’t tended to go as well online. If you’ve had a different experience, we’d love to hear about that in the comment section below.
We’ll also mention that Bruce Rosenthal is also doing some really good work in this area related to sponsorship and corporate relationships, so be sure to check him out at https://www.brucerosenthal.associates/.
[20:45] – Wrap-Up
Reflection Questions
- Which of your offerings are unique, fast to market, and/or able to bring together people for their mutual benefit?
- In a change to online, in which of your offerings can you sustain or improve on that uniqueness, speed, and ability to bring learners closer to others?
If you are getting value from the Leading Learning podcast, be sure to subscribe by RSS, Apple Podcasts, Spotify, Stitcher Radio, iHeartRadio, PodBean, or any podcatcher service you may use (e.g., Overcast) as it helps us get some data on the impact of what we’re doing.
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[23:02] – Sign off
See Also:
Focusing on the Future of Learning with Arlene Pietranton of ASHA
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