Find the Right Business Model to Start Selling Online Courses
6 minute readThere is a big difference between saying "online course" and "online course business".
If you want to be successful selling online courses, you need to be clear on what business model to pursue.
In today's article, we will describe all types of business models you can use to build an online course business and we will analyze the different levels of service you can provide as a creator.
The Different Levels of Service in Your Business Model
Depending on the level of service you are willing to provide in your online course, you might opt for one business model or another.
If you offer a high level of personal service, you get the opportunity to charge a higher price for your online course, this way you will need to attract fewer students in order to make a living as a creator.
On the other hand, if you decide to offer a low level of service, your online course price should be lower to match its value, making it easier to attract students but requiring more students to earn a living.
Each business model has its pros and cons, and you will find the best one for you depending on your goals, your needs and the resources you have available.
Let's see which level of service adapts better to your business model:
#1. Do it Yourself
The "Do it Yourself" model refers to online courses that offer very limited services besides the content itself.
For instance, it could be an online course where students get access to the lesson's content but have limited or no interaction with the creator.
The name "Do it Yourself" comes from the fact that in this business model, students do not receive any personalized assistance from the creator and are simply given instructions on how to solve a specific problem.
As a creator who chooses this business model, your main job is to create content and promote your online course. For this reason, the "Do it Yourself" model is a good option if you can't devote the time to offering individual assistance to your students, or aren't as serious about building a full-time online knowledge business.
However, due to the lack of service, the price of a "Do it Yourself" offer cannot be too high. A reasonable price for this type of course generally ranges from 0 to $100.
Let's recap and see the pros and cons of the "Do It Yourself" business model:
Pros
- Easier to create and requires less time and effort once the course is launched
- Great for creators who do not have time to focus 100% on their online course
- Easier to attract customers at a low price point
Cons
- Cannot charge a high price (generally the average price is under $100)
- Does not offer great value to students
- Low-profit margins if combined with paid marketing strategies
- As you need more students enrolled to make a profit, you need to put more effort into your marketing
#2. Done With You
The next business model is a middle ground between offering zero personalized services to your students and solely focusing on individual coaching.
As the name suggests, a "Done With You" level of service allows students to learn at their own pace by accessing the content in your online course, while still receiving some assistance from the creator.
An example of this could be an online course where students go through the lessons on their own but can contact the creator if they have any questions, and have access to an online community or even live group sessions.
There are many ways a creator can engage with their members and offer them a personalized experience. Check out this article from our blog to learn all about this: Why You Should Build an Online Community of Engaged Customers and How to Do it
As you are offering some personalized assistance, your online course price can be higher compared to the "Do it Yourself" model. Depending on the topic of your online course and the level of service you offer, prices for these kinds of programs can vary from $100 to $1000 or even more.
If you are not sure how much to charge for your online course we built an earnings calculator and wrote a guide on this topic: Ultimate Guide to Pricing Your Online Course (With Earnings Calculator)
Let's see what are the pros and cons of the "Done With You" business model:
Pros
- You are offering a valuable product that actually helps your customers achieve their goals
- Offering personalized assistance allows you to charge a higher price (generally up to $1000)
- As your price is higher, you need fewer students to break even and you can focus on keep building more content and grow your business
- Students will appreciate the level of service and will be more likely to purchase again from you and leave positive reviews
- As you are in contact with your audience, you can gain valuable feedback on your online course
Cons
- Offering even a small level of service can require a bigger time commitment from creators
#3. Done For You
Last but not least, the "Done For You" model includes online courses that focus solely on providing individual service to its students.
Examples of this business model include private or group coaching programs, live sessions or even paid online services.
This type of business is very different from a standard online course and as the creator, your job is to fully focus on your clients' needs.
The price for the "Done for You" model can be extremely high, as you can only afford to coach a few students at a time.
Here are the pros and cons of this business model:
Pros
- High earning potential
- Opportunity to provide a great value to your students or coaching clients
Cons
- Time-consuming and requires a greater amount of effort per single customer
- As you are asking a higher price, you will need higher marketing efforts to gain a single client
- Harder to scale and generate leveraged income
Different Ways to Structure Your Online Course Content
Your business model defines the way your content is structured in an online course. Let's see what are the most popular online course types and which one is best for you.
Online Course
The most common way to sell knowledge online is through online courses. What we define as an online course, is a collection of lessons structured towards a clear path that brings a student from point A to B.
What differentiates the classic definition of an online course from other business models is the fact that an online course has a start and an end.
As the creator, you can play around with this and decide if you want all of your students to start on the same day, or to leave enrollment open at all times and have students join on different dates. But this is a whole new topic entirely, which we discuss in this article from our blog: Selling Evergreen Online Courses Versus Scheduling Multiple Launches. Which is Better?
To be successful, an online course should focus on helping students achieve a set result or goal upon completion.
Membership Site
A membership site is a learning program where students usually pay a monthly fee to access ongoing content and there is not a defined end to the course.
As the creator, you can choose to limit the students' access to your membership site after a certain period of time, or keep their enrollment open without an end date.
Courses that teach a topic that requires a longer time for students to learn, or that students have to access on a weekly or monthly basis are a great fit for a membership site.
Fitness, language, cooking and so on, generally favor a membership site business model.
Other than its length, what differentiates a membership site from an online course is the end result. While an online course aims to help students reach a certain result in the fastest way possible so at the end of the program they will not need the course anymore, a membership site aims to retain its students and should help them achieve and maintain a result, without them leaving the program.
Fitness courses are a great example of this: students who join a fitness membership site do it to achieve a result (i.e. losing weight or become healthier). Assuming they enjoy the content of the site and receive value from it, they will not stop accessing the course simply because they have reached their result, as their goal is also to keep being healthy or keep their ideal weight.
What is the Best Business Model for an Online Course?
So far we have described the three different types of business models for online courses related to the level of service you are willing to provide and the two most popular ways to structure the content of your online course.
Which one is the best one for you?
The answer highly depends on your specific needs and goals. To find the right fit for you, consider how much time you are willing to put into creating your online business and what kind of value you want to offer to your customers.
That said, you don't have to focus on one business model only. You could mix and match your product offerings to include all three service types (do it yourself, done with you and done for you).
Many creators try to differentiate their products and create a "customer journey", where they start with a simple offering and guide their customers up to their most expensive and valuable product.
Organizing your products this way is often referred to as the value ladder. Learn all about creating your own value ladder in this article from our blog: The Value Ladder - How to Improve Online Course Sales by Segmenting Your Audience and Product Offering
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