Office Hours | Pricing (Part 1)
In our very first installment of Soulful MBA’s Office Hours, we’re going to share our 7-factor framework for pricing your online programs:
Location: If you’re aiming to build a global brand online, location won’t be nearly as essential. But if you run a yoga studio in your hometown, or operate a hybrid of in-person and online services, your initial client base will come from your local community. Which means you need to make sure that your prices are appropriate for the people who live within that community.
Demand: If you have a product that’s created for a specific audience, you need to take a hard look at how many other people are offering similar products to the same customer base. You also need to weigh how popular your subject is among the folks in your target market.
Amount of content: A fully loaded, content-packed 12-week program should be priced very differently from a streamlined 3-week program. Similarly, if you’re hosting a community and can offer members 100 stellar videos, you’ll be able to charge more than if you’ve only got 10 videos in the bag.
Production quality: This is where most folks get hung up. If you’re a newbie to videos and handling everything yourself, you simply can’t charge as much as someone who employs a professional film crew. That said, you should absolutely start wherever you’re at right now! As your business grows, begin investing in better tools and more help, and let your pricing reflect those improvements.
Background and experience: If you’re a brand new teacher or coach, you’d be wise to charge a little bit less than someone with decades of experience. It’s what your customers will expect.
Competition: You want to carve out a place in the market for yourself where you’re not facing a tidal wave of competition. A little competition is actually essential; It validates the viability of your offerings. But throwing yourself into a saturated space and selling the same products as dozens of other experts is a recipe for disaster.
Revenue goals: Your pricing should account for your specific income goals, and the products you offer at various price points should be built around those goals. If you have to hit a certain dollar mark each month, you need to know how many of each product must sell to reach that goal. And you need to ensure that selling that number of products each month is truly feasible for you.
Creating a fair and sustainable pricing structure for your business will take some research and careful calculation, but it’s well worth the effort.
Tune into next week’s Office Hours episode, where we will discuss the different strategies we recommend for pricing online memberships vs. online courses.