aLearning Blog

Online Learning for Trade Associations

More Online Learning Pricing

Posted by Ellen on December 26, 2007

If you read the previous entry on “Online Learning Pricing,” you saw the general questions posed to help you get an idea of what you and your staff bring to the table, including your skill set and technical capabilities (within people and hardware). 

Pricing online learning is complex, and I need to stress that general industry standards simplify a process into basic numbers.  The fact is that an online course can be very expensive (hundreds of thousands of dollars) or very inexpensive (less than a thousand for basic software, plus a staffer’s time to pull something basic together).  You could end up with something elaborate and polished, with embedded demonstrations and practices:

  • branching exercises leading learners through a decision-making process so they can see the results of their decisions
  • interactive spreadsheets that give learners the chance to try out different financial scenarios and see their impact on the bottom line
  • simulations that recreate a working environment so learners can practice skills such as taking manufacturing equipment off line or practicing lock out procedures
  • games that help learners retain facts and data such as product details for sales calls

When designed and developed correctly, interactions will enhance the learning experience.  They also cost more than a “page-turner” that’s basically an article on the screen.  There’s a place in the online world for each extreme, and it’s important to know when each is appropriate.  Otherwise you’ll commit to a course that won’t get the job done, or you’ll overpay for interactions that add little for the learner (“eye candy”).

So you can expect that the range for an asynchronous, instructor-independent course can be vast, and it is.  Using a development company that employs offshore developers can run as low as $10,000 per course hour; using a high-end company that films video especially for your course, creates elaborate simulations, or other expensive options can cost well into six figures per course hour. 

On average, for a well-designed, engaging course with a moderate level of interactivity, you should expect to pay $25,000-$30,000 per course hour.  You should also allow for any legal fees (for example, to create an agreement of terms with content providers, to conduct a content review, etc.), any costs associated with working with your content providers (for example, any in-person meetings or conference calls with volunteer subject matter experts to pull the content together), marketing materials, software, hosting, hardware, and implementation or integration fees (for example, if you will be routing registrations through your membership database and back to the course).

It can add up — but don’t assume it won’t pay for itself! (see my separate entry, “Talking Strategy and Measurement”)

Vendors out there — do you agree or disagree with the industry standards regarding pricing?  What do you see as significant factors in determining price? What do you think organizations can do to make the most of their limited dollar, when it comes to online learning?

2 Responses to “More Online Learning Pricing”

  1. kingmarsh said

    Basically, I think you are talking the pricing on the content-side?
    What about the client-side and company-side?

    As a vendor of content creation tools, we notice that price depends mainly on
    the product quality and on the target market.
    And the trends for elearning content development now are
    1. Price for high-quality content goes up.
    2. Price for low-quality content goes down. It used to be expensive.

  2. Ellen said

    Kingmarsh — If I understand your comment correctly, yes — I was referring to the development costs, particularly for customized asynchronous courseware.

    Pricing for learners/attendees is another matter. Sometimes one drives the other, sometimes they don’t (it depends on the association’s education mission and strategy).

    I definitely agree with your two points. During my time working for a content creation vendor, I saw a single five-hour seat time course plummet from mid-six figures to upper five figures. We developed moderately interactive courseware — no high end simulations, but plenty of strong on-screen interactions, some branching, etc. All because of the tools available — more templates, more WYSIWYG, ASP, XML, and other developments in technology made the difference.

    Would you attribute the drop in prices to the same reasons?

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s