Want to make an $800 dollar watch look cheap? Put it next to an $8,000 watch.
Sounds simple, and it is, especially when you start to think about how to price your online course.
Brennan explained to us exactly how he drastically increased his business rates and why, and how you can apply these same principles to your own online course or business.
While I will detail and provide examples in this blog post of each step, you can also watch a free replay of our conversation with Brennan by clicking on the orange button below.
Let's be blunt. Far too many of our online instructors charge too little for their online course.
As a team, we believe that most of you course creators can charge twice as much for your course without actually affecting your conversion rates.
We get it. Charging of hundreds of dollars for your course feels… weird.
Maybe it’s imposter syndrome talking.
Maybe you want to price your course based on length of video content.
Or, maybe you’re looking at other online courses, many of which are drastically discounted in online marketplaces. (We really hate this.)
Don’t do any of that. Instead, we're going to think outside of these tropes and price our course based on the value of what's taught.
The more you charge for your course, the more it conveys value. If you set your course to $20, people will assume that what you’re teaching is only worth 20 bucks, but if you set your prices at $200, well that says something.
We’re not making this up. We’ve been asked multiple times by philanthropic course creators (who we love!) if they should make their course content free.
Short answer, not if you want someone to read it. We ran the data and charging for your online course increases student engagement.
Who is Brennan Dunn?
Here’s what you need to know about Brennan. When he and his wife decided to start a family, he was forced to leave his agency job and start freelancing. He killed it. Out of this, many of his contracts became clients and he built his own agency around the relationships he had formed.
Here’s the interesting part, since then Brennan has 10Xed his rate over the years. Nothing explains it better than this graph:
The power to make a change in your business like this is poweful. Brennan created his first ebook, Double Your Freelancing and later developed it into a course, which eventually became three courses.
Speaking with Brennan, he pointed out that when people start to price a course, the first thing they ask is what people on average charge and they go hunting around.
This is the absolute wrong way to think about pricing.
As in freelancing, as entrepreneurs, we look at the acceptable market rate and go from there, but this makes us susceptible to the stigmas around products that may or may not be accurate.
Think about an ebook. Books sell for 15-20 dollars and it would be hard to charge more than this. However, a book isn't a good reference for pricing your course. The beauty of an online course is that people assume courses are premium products and education is inherently important. This sets us up to charge much more than an ebook (even if it conveys the same amount of value).
But at the end of the day, people don’t want a book, heck, they don’t even want a course. They want the outcome of the course, the knowledge and the transformation you’re providing.
The notch in the graph, well, that was when Brennan stopped looking at his talents as a commodity to sell and started focusing on the outcome, or "the better tomorrow" that a company hoped to achieve by hiring him.
Picture this: companies don’t inately want a website per se, they want the press, accessability and PR that comes with a website.
For example, look to our Teachable course, The Profitable Teacher. We know our customers don't really want to take a course for the sake of sitting through hours of lectures, they want to know how to teach online successfully. That knoweldge is what people are willing to pay for.
One he had this realization, Brennan broke down his process for finding the ideal outcome and portraying it to students in four simple steps.
STEP 1: Socratically, get to the root of the problem
As soon as someone starts to see your course as an investment in their future rather than an expense, they become much more willing to pay you.
The step to positioning your course as an investment is to get to the root of your audience’s problem.
If you’re teaching computer programming, are people learning because they want a better job? More freedom in their career? A pay raise? Tie your course to these deep seated problems.
For instance, if a course promises to teach me Ruby, is that of lower or higher value than a course that teaches me ruby to get a job.
The best way to start to truly pinpoint your audience pain points is to ask them by looking online where your audience hangs out. Look to discussion boards, Reddit, Facebook groups, what specifically are people complaining about and why.
Brennan calls this phase socratic questioning because it relies on the idea that what people are asking for is not exactly what they want. It’s your job to figure out what they truly truly want.
When freelancing, Brennan asks his clients two questions:
- What triggered you to seek out someone like me?
- What exactly is the problem they think your freelancing will solve?
For courses, you have open communication with your audience. During your presale or simply by tapping your exisiting email list, you can ask people this:
What is 1 thing you’re struggling with right now?
It’s worked for our instructors, our co-founder and our company as a whole as we tailor our online courses.
Once you know this specific problem, you can associate the cost of the problem going unfixed as a base for how to price your course.
This is an extremely clear transformation that someone is willing to pay for.
STEP 2: Identify the project’s financial upside
Since we’re going to frame ourselves as an investment, knowing the financial upside of your product is key.
How much more money can someone make by taking your course? How much more enjoyment can they get out of their relationships by taking your course? How much healthier will they be from hearing your advice?
Remember, no one wants a website or a course, they want an outcome from a transformation.
If this sounds familiar, that’s because in every single one of our teachable webinars when we help people find their profitable course idea and title their course we ask them to remember that a course is simply a shortcut to an outcome and that you should focus your course around providing a transformation to your students.
That’s what people will pay for.
For example, check out this sales page for Programming for Marketers, a course created by Nat Eliason and Justin Mares.
The tranformation and value is extremely apparent.
Here's another example: A course from Bree Noble:
Clear transformations allow you to show off the financial benefits of taking a course, which in turn allow you to charge more.
STEP 3: Price anchor against the upside
The key to portraying your transformation is on your sales page. At Teachable, we make it incredibly easy to build beautiful sales pages, but it’s up to you to write text that frames your content the right way.
Don’t just fill in the blanks for bio, curriculum, cost. Show off the benefit of your course.
For example, Brennan pointed out that if he were selling a programming course, he’d anchor his against what a programmer makes, not what other programming courses charge.
He’s thinking big picture transformation. To show off how valuable his course is, Brennan created his own version of the freelancing calculator which clearly compares what someone might be making now, with what they could be making after taking his online course.
When you launch, you’ll probably write a string of sales emails. When Brennan launched his previous course, the final email listed the three different competitors to his online course.
- The cost of an MBA
- The cost of hiring a business coach
- The cost of his courses
- The time cost of trying to read and find all of his information online and piece it together
Can you frame your course in this regard?
You don’t have to be teaching people a hard skill like programming to make money online. People spend huge amounts of cash on their health, relationships and careers. The key is portraying a very clear transformation when you promote your course.
One of my favorite examples is this:
Brennan was consulting with someone who was selling a course + guitar lessons. What he realized was that the parents buying the course for their kinds didn’t really care about guitar. They cared about building their children’s confidence through musical learning.
Knowing that allows you to frame the benefit of your course.
One of the easiest ways to start making more money on your course is to make sure you don’t have just one pricing tier.
Never have just one offer, give multiple.
Here’s a look at Brennan’s pricing page. The "Sell Yourself Online: The Blueprint" is $50. On it's own, you might compare that cost to the price of yoga pants or a video game, but when contrasted with a $99 set of videos, YOU get to frame the price comparison.
Here’s one of my favorites, Laura Belgray, who is a brilliant writer:
You can offer multiple upgrades and bonuses to make your courses more valuable, but an easy upsell is direct access to you, it’s one-on-one training or coaching. Your time is valuable and to access it, it should cost more money.
STEP 4: Present your course as a solution, not an offer
When you write a sales page, remember this: frame your course as THE solution, not an offer.
Use the text blocks to:
- Empathize with your students problems
- Talk about the solution
- Give the solution
- Make your product the middle priced option.
Executing these steps is not only good for you, it’s good for your clients. Ultimately, your students want a transformation and outcome, so focusing on this will make your courses higher quality.
At a higher pricing tier, your students are also more likely to be of higher quality. This means you’re not spreading your time thin handholding beginners and holding back advanced learners. It also means you’re not fighting for engagement.
If you do a good job, your students will stick with you for life AND you’re making more money while doing so.
This is a win all around.
While I’ve covered Brennan’s main points, I highly suggest giving the live video a listen. At less than an hour, hearing Brennan describe how this pricing strategy changed his business, what to expect along the way and the ease with which you too can start charging more will help you make small tweaks to your pricing strategy that will have a big impact.