How To Price Your Hybrid Classes

Pricing your classes is tricky business. Unlike product pricing, it's not really possible to quantify all the costs that go into providing a service because the expenses that go into providing a service are more subjective.

We all understand the importance of pricing in an economy. How you price your classes directly impacts almost every aspect of your teaching business – the type of marketing you can employ, the type of students you attract, the amount of sales you generate, which in turn allow you to build an image and counter competition effectively.

While it's not always possible to settle at the perfect price to charge for your classes on the first go, it's important to be aware of the repercussions of charging too much or too little.

Charge too much, and you may:

• Need to drop your price in order to increase sales (which looks really bad!)
• Get fewer customers 
• Lose existing customers to competitors  

Charge too little, and it may:

• Limit your revenue potential and marketing abilities 
• Decrease your incentive to put more effort 
• Customers may associate your course with low quality 
• Attract one time customers leading to decreased brand loyalty 

While there is no ‘one price fits all’ strategy when it comes to pricing your classes, there are definitely some important factors you need to consider when deciding on the right price for your classes. 

1. Time ⏱️

Time is money! And your time matters. When deciding the price of your classes, factor in:

• the time you spend preparing lessons, and creating resources – worksheets, quizzes, assignments, presentations – to cater to different learning styles 
• the time you spend delivering in-person classes and the direct labor costs you incur for the time of your teaching staff 
• the time that you will take to evaluate assignments, if any
• the time and money you spent to acquire the skill that you'll be passing on to your students
• the precious hours you'll be saving your students by organizing resources and making them available in a simpler format 
• how long you’ve been in the industry - the more time you have under your belt, the more reputed and established you are in your industry

2. Knowledge and experience 🧠

While time is money, knowledge is power. Your unique experience and perspective are intangible assets that must be reflected in the worth of your counsel. Bear in mind the painstaking effort you spent acquiring the knowledge and expertise on the subject that you have now. Offering something unique, like an uncommon language, a unique instrument, or a very technical subject, will fetch you a higher price.

3. The transformational value for your customers 💫

Customers enroll for your class for the outcomes that you provide, that may consequently benefit their life. People are willing to spend their money to reap significant rewards such as career advancement, higher income potential, an improved quality of life or personal fulfillment. This can become a marketing narrative.

For example, if the outcome is $1000-1500 increase in income potential, then charging $200-$250 seems extremely fair. You must charge adequately for that value you are adding to the lives of your customers.

4. Marketing costs 📢

It's hard to drive sales with organic promotions alone. It's essential to choose the right marketing mix based on your target audience, the subject matter and the format of your course in order to effectively market and promote your classes. Your marketing activities will typically include running ads and other paid promotions combined with executing email and phone promotions to generate and build on leads. It would be advisable to budget adequately to cover these expenses, which in turn can lead to increased revenue.

5. Indirect costs 💸

Live classes tend to be costlier than online classes because of the need to factor in additional costs required to run in-person classes.

It's necessary to factor in your overhead expenses: which include rent, utilities like water and electricity, equipment, like whiteboards, and maintenance, indirect labor like a receptionist or a janitor, among a few.

Add together the indirect costs to determine the total amount of money you must cover during a time period, and price your classes accordingly.

6. Tech Tools 💻

Teaching in hybrid classrooms when faced with the challenge of engaging both the offline and online students. The strength of your technology plays an important role in optimizing hybrid classes. Every hybrid classroom needs a smart video camera, a video conferencing platform such as Zoom or Google Meet, a class management software like Classcard, and online textbooks or other resources. Incorporate the cost of purchasing and setting these tools up when deciding the price for your hybrid classes. 

How can you cut down on costs and increase profits?

The costs you incur largely influence how you price your classes and cutting down on these costs can help you increase your profit margins. Here are some simple ways to minimize your costs of running your class-

📉 Reduce operating costs

Reducing operating costs is a quick way to increase profitability. Try taking into account everywhere that you are spending and identify areas where you can cut costs. For example - 

• Try using a co-working space to conduct your classes rather than renting out your own space.
• Encourage working remotely – this saves most of your overhead costs
• Purchase cheap yet good quality equipment (like less expensive webcams and microphones, used desks and chairs)

While you look for ways to reduce costs, make sure to maintain the quality and efficiency of your operations.

🗂️ Go paperless

Going paperless can save you lots of money, time, effort, storage and supplies, and also save the environment. And it's really not that difficult in this digital age! Consider switching to a class management system instead to manage administration. You may also switch to e-books and online worksheets – they can be easily shared and updated and maintained/stored.

⌛ Offer payment options

If you're worried about attracting customers, offering payment options is a better solution than lowering the price of your course.

• Installments 
  Shelling out a lump sum amount at once might not suit all your customers. Some may find it easier to pay smaller amounts spaced out over a few months. Offering 4 monthly payments of $210 may be more attractive than a lump sum payment of $800. You may also offer Buy Now Pay Later solutions through providers such Affirm, Klarna or Postpay to your customers for flexible payment options. Moreover, you can price the plans that are paid out over time higher and offer a discount to those who choose to pay in full. 

• Tiered pricing
  Tiered pricing is another substitute to lowering your price, making your course accessible to a greater number of customers who have the option to choose the aspects they wish to avail. Your basic price may include the course alone, and with each pricing tier you may provide bonus content or additional resources (like consultation hours, templates etc.).

The average gross profit margin for online courses is around 42% while that for in-person classes is 48%. While there’s no fixed formula for pricing classes, these numbers may help you do the math on how to price your classes based on industry standards. Understand the value you bring to the table and the problems you are solving for your customers and don't hesitate to charge your worth!