Common pricing mistakes that many training providers make include:
- Not pricing based on the value
- Pricing to beat the competition
- Not aligning all your business practices to match your unique selling proposition (USP)
- Creating an over-generalized pricing strategy
In this post, we discuss these common pricing mistakes in more detail. If you notice that you are making one or more of these missteps, you can quickly course-correct and keep growing your business.
1. Not pricing based on the value
What you as a training provider create is considered an investment. That investment is either for the individual purchasing the content, their clients, or their staff. So, what you create has both immediate and future value. Due to the perceived value of the content, the wrong price can cause potential clients to view your products as less than. Even if you are offering the best course in the market, no one will ever know because it’s at the wrong price point.
That price point may be telling potential clients that your content is low value.
2. Pricing to beat the competition
Pricing based solely on the competition might seem like the best idea. But becoming the cost leader is a hard position to get into, especially if you are new to the market. One pricing strategy that you might see many companies using is penetration pricing. This pricing model is when a company enters the market with a deliberately low price to take attention away from its higher-priced competitors. Penetration pricing isn’t always sustainable in the long run and can sometimes backfire and create a negative perception of your business. Having the lowest prices in the market/industry doesn’t always say quality. Your price reflects your business. Additionally, if you’re attempting to enter the market with a lower price, ensure you have considered all overhead costs such as your LMS fees.
3. Not aligning all your business practices to your USP
While your price reflects your business, it is a mistake to not have all your business practices reflect your USP. But what does this look like? An example is incentivizing your sales team on a metric that is not growing your business. They might start selling the product at a loss to the company to gain the sales incentive. That same incorrect metric could cause your business to shut down. Therefore, companies that move from “good to great” will base everything on their USP. Everything from internal policies to public communication and your prices should all reflect your USP. If you don’t know how to find it, there are a few things that you can do. For example, survey your best customers. If you don’t have customers yet, ask yourself, “How do I solve my ideal customers’ problems?” The answer to this question is your USP.
4. Creating an over-generalized pricing strategy
One pricing mistake that many training providers make is creating a pricing strategy that is too general. It looks like this:
- Believing that the same price can be applied to every product, no matter what
- Holding the price at the same price point for too long
These two things both ignore the value of a product, which can be different in different customer segments. For example, a safety course has a different value to customers in healthcare vs those in the cruise industry. It might seem strange to charge those two markets differently for the same material, but when pricing based on the value of the material, you will realize that one is willing to pay more.
Likewise, keeping the price the same for too long can run you out of business, unless that price is tied to your USP. If the price is merely the same because it’s always been that price, you are again ignoring the value of the product in its current state. Doing this can cause you to miss key shifts in the marketplace.
Wrapping it up
The best pricing strategy is one based on value and your business’s USP. Pricing mistakes can be costly and can cause your business to shrink or shut down. You grow your business by making sure your prices are based on value and your USP. Deciding your prices based on anything else can be a mistake.
Check out these resources to continue learning how to grow your training business:
- 4 Strategies to Sell Your Training Courses on Shopify
- How to Sell Courses on Shopify as a Training Provider
- Selling Training Programs B2B and B2C
Here at Firmwater, we don’t just sell an LMS for training providers. We partner with our clients, giving them the tools and insights they need to implement the best practices in e-learning course development, growth, and delivery. We care too much about our customers’ businesses to have them wade through forums and chatbots for help.
Ready to use an LMS that’s designed for the way YOU work, with a team dedicated to YOUR needs? Book a no-obligation consultation directly with our team today!