For continuing education (CE) providers that are “nonprofit,” there is a healthy tension when it comes to pricing your CE products. Many organizational objectives influence the pricing decisions and many of the objectives are competing. In addition to dealing with competing objectives, some of you have to deal with annual changes in leadership and with those changes can sometimes come a new set of objectives!
If you are wondering why I put the word “nonprofit” in quotation marks, there is a reason. Associations and other nonprofit organizations are often dependent on continuing education revenue to balance budgets and continue providing member services. As Baby Boomers retire and otherwise “move on,” the membership dues base will dwindle, resulting in either increased dues or an increased dependency on other revenue streams, namely continuing education revenue. This is however, assuming the level of member services remains the same within the organization. If it hasn’t happened already, be prepared for someone to come knocking at your door and ask, “Hey, can we add another $40K to your top line?”
What I am not talking about: First, voluntary bar associations that offer continuing education for free as an incentive to gain members; this is a different business model. Second, providing more programs to create more revenue. More programming does not always result in more revenue, especially if you already have a comprehensive educational offering. In this area, be guided by your member needs and educational objectives.
So, how do you keep your sanity and make the right business decision for your organization? While pricing and an association’s need for increased secondary revenue are separate issues, you are likely to see some overlap and it is infinitely better to be proactive and prepared when it comes to these issues. Position yourself to take control of pricing your products and avoid being told by others how you should price. It isn’t easy but here are some tips that just might make the pricing decision more likely to be based on sound analysis rather than whim.
- Know your market. Look at the pricing of products by other providers that serve your learners. What is the range of prices for similar products? What is the quality of the products offered? And furthermore, given your current prices and the quality of your product, where do you fit on that spectrum?
- Don’t respond to the “bottom feeders.” You know, those providers that charge next to nothing and make you think you need to reduce your prices! No thank you! What you are selling is better than what they offer and your learners know it. There will always be a few who buy the cheapest CE available but don’t cater to that crowd!
- Know your numbers. Your Client Success Manager can help you with this. Know your revenue history and identify trends. What products sell the most? What products are evaluated the highest? What can you learn from looking at google analytics? How successful are your bundles? Your discounts? What is your market share? All things being equal, you’ll want to repeat your successes and consider those efforts that didn’t work economically. Why didn’t that bundle sell more? Was it the courses selected? The failure to market? Knowing your numbers helps you evaluate the health of your program and the opportunities available to you in driving revenue with increased prices. Have some fun and calculate the impact of a simple five or ten-dollar increase. Depending on your sales, a small increase can have a huge revenue impact.
- Know your history. How long has it been since you increased prices? When you last increased prices, how much of an increase was there? Did anyone complain? When was the last time membership dues were increased? Is there a planned increase in the future? Obviously, you can increase prices more comfortably if there hasn’t been one in a long time. Yet, you must also be careful and coordinate CE price increases with dues increases. Don’t hit your members/learners with two increases close in time.
- Know your learners. When you last increased your CE prices, did your learners even notice? Many CE providers are concerned with customer reactions to increased prices. In my experience as a provider and at InReach, an incremental increase results in little to no reaction from your learners.
- Know the consequences. If you are compelled to reduce prices or offer programming for free, and at the same time carry a huge burden as the second-largest revenue source of your organization, you need to always confirm the economic consequences of such an action. While “they” get to have it both ways sometimes, it shouldn’t be easy for them.
Want to discuss your pricing? Call or email me. firstname.lastname@example.org 512.904.1808