How to price your online workshop? (Pricing Strategy)
Deciding on the online workshop pricing strategy can be complicated if you are doing it for the first time. It defines the amount of money you will earn and impacts the decision-making of your participants. Yes, you can look at the other online workshops of your industry and price accordingly, but that alone would not help in the longer run.
I will help you make an informed decision for pricing your online workshop so that you can attract the maximum number of participants to join in.
Online Workshop Pricing Strategy
Before jumping on to the process of coming up with a suitable price for your workshop, you need to decide on the aspects mentioned below:
Premium vs Penetration Pricing
Both the options work and you need to decide on this. Penetrating pricing attracts more participants, and you charge a discounted price. In the case of premium pricing, you charge more as you plan for fewer people to attend the workshop.
Let’s take a look at each option:
1. Premium Pricing
You price your workshop more than the competitors to portray more value. It is a perception game that makes your workshop seem advanced and lucrative.
For charging a premium, you should have a USP(Unique Selling Point) to differentiate. If you will price higher for earning then the same would never get appreciated by the audience.
2. Penetration Pricing
Penetration Pricing is the technique to charge less at the initial stage and penetrate the market. Less pricing attracts more people, and it becomes possible to reach the maximum audience when you are trying to prove your expertise.
Penetration pricing is only recommended if you are starting your workshop journey and want more people to attend it. This strategy suggests you increase the price gradually after gaining the trust of the audience.
Per Workshop vs Subscription Model
Creators decide this based on their commitment to the workshop creation. Also, you need to be clear with your goals and the loyalty of your fans before making a decision.
Let’s take a look at each option:
1. Per Workshop Pricing Model
If you are new to content creation, then charge per workshop and start planning for the other ones. This model doesn’t require much commitment from either side. You can later make changes to the pricing of future workshops as well.
2. Subscription Model
If you have many similar workshops planned and want to club them, then you can offer a subscription plan to your audience. It will eliminate the hassles of making repetitive payments and also help you earn a consistent stream of income. The subscription model also works well if you are looking to build a community of your own.
This model is not recommended if you are a beginner, as people would like to know your expertise and then commit to a long-term engagement.
Now, we have understood a bit about pricing models. Let me take you through the detailed strategies for pricing your online workshop:
Strategy 1: Profit Oriented
This is the most primitive way of determining the price of your online workshop. Here, you have to assess the amount of money you want to earn out of the whole exercise. This decision will help you come with an optimum price for your online workshop. Let’s follow a step-by-step approach to this.
1. Set a Profitability Goal
You must have thought of an amount you want to earn after conducting the online workshop. If not, now is the time to decide that. It is advisable to set a goal that is around 20% more than your current earning(regular job or freelance) so that the motivation for creating workshops remains intact. Once you get a ballpark figure, we will determine the expenses and come up with the pricing.
At the start, we helped you with the premium and penetration pricing model. Please keep that in mind before deciding the margins and only price according to your strategy.
2. Calculate Expenses
Now, you need to decide how much you are willing to spend on this workshop. There is no limit to spending as the cost of equipment rises with increasing functionalities. If you are new to online workshops, don’t spend much on the equipment and start with the stuff you can afford.
Along with the equipment, you will also require a platform to host this workshop. You can use GoSocial, it is a community platform providing creators with the tools for efficient communication. You can create online courses, conduct workshops, go for live sessions, do private/group chat, implement discussion forums and a lot more using a single platform.
After deciding the platform, calculate the value of your time as well.
Say, the workshop creation will take 10 hours, come up with a figure that is equivalent to the amount you earn after 10 hours of work.
Add all these expenses and note down the number.
3. Estimate the Number of Participants
This is the trickiest part as we are not aware of the number of participants who will attend the workshop. You can conduct a small poll on your social media like LinkedIn, Instagram and Twitter so that you can start the estimation process.
Always remember that these polls are not correct as most people never convert into the audience. It is advisable to discount at least 50% of the positive responses before making a decision. There is a possibility that you will not get the correct number in the first instance. Regularly performing this exercise will help you come up with an accurate estimation.
4. Calculate the Final Price
Once you come up with the desired profit, expenses and the number of participants attending the workshop, you can decide the price of your workshop. Here’s how to do that:
Say, the total expense is 5K ₹, and 25 people will attend the workshop according to your estimate.
So, you have to charge at least 200 ₹ per head to reach a break-even (no profit, no loss) situation.
For making profits, add the desired amount to the break-even price of the session.
If you add 200 more to the fee, you will earn 5K ₹ after deducting the expenses.
So, you will charge 400 ₹ from each participant after following this approach.
Strategy 2: Market Oriented
This strategy will require you to make changes at several steps as a lot would depend on feedback and the market response. Participants will always compare your content along with the price of other workshops. To make them go for you ahead of every other creator, optimize your pricing using this approach.
1. Come up with an Initial Price
You need to pick a number you find suitable for your workshop. The experience of attending other workshops could come in handy at this stage. Once you have the number, look at your competitors and take note of their price.
To make the price competitive, take an average of the competitor’s price and the price you decided. This number will help you come up with the initial number for a head start.
If you are not good with the guessing game, pick up the 5 closest competitors of your industry and decide your price based on the same. Take the average and come up with the number closer to it.
This exercise could take some time and effort without showing substantial results at the start.
Launch your first workshop according to the decided price (at the first step) and then evaluate the results. For evaluation, take feedback from the participants after the workshop and ask some questions related to the pricing and the value offered in exchange.
If more than 50% are happy with the pricing, don’t make any changes to the price and keep taking feedback after every future workshop.
If most of the feedback is negative, then make the changes to your prices and increase/decrease as suggested by the participants. This exercise is only helpful if performed regularly.
3. Introduce Tier Pricing
After working on the feedback, you will come closer to the price that offers value as well as helps you earn money. At this stage, you will have a satisfied base of individuals who are willing to pay for the content you offer. Leverage this opportunity to introduce tier pricing and cater to the market segments that were not getting targeted.
In tier pricing, we offer several add ons that are not available in the basic package. Users can decide based on his/her requirements and the budget.
Your tiers could come out like this:
Plan 1 (Basic): This plan will allow the participants to attend the workshop and ask questions during the workshop only.
Plan 2: (Value Pack): In this plan, you can offer exclusive study material along with access to discussion forums for the doubts that arise after the workshop.
Plan 3: (Advanced): An advanced plan could provide an opportunity for one-to-one doubt clearing sessions or personal chat. You can also offer some discounts on the upcoming workshops.
Keep Increasing the Price
With increasing engagement with the audience, increase the price gradually and make use of the equity you have created. Do not go for a sudden price increase, you can only justify a close to 10% increase by new additions in the content. Increasing price without adding value could become counterproductive in the longer run.
It is never advised to make these changes without taking feedback from the users. Including the consumers is essential as you could end up losing them if not considered during the decision-making.