How Do You Price Your Virtual and Hybrid Offerings Correctly?
As associations continue to offer online, hybrid, and in-person learning, many are struggling with how to price this mix of offerings. An expert recommends focusing on value, engaging with members, and understanding that new models—like hybrid—may take some time to figure out.
During the early parts of the pandemic, many associations provided online learning to members for free. While this was helpful to members, it also increased their expectations of receiving free content, even as associations needed to generate revenue from their learning offerings. As organizations work to reset their pricing models, many are wondering how to determine the correct price to charge for their varied offerings.
Jeff Cobb, cofounder and managing director of continuing-education firm Tagoras, said that the key to any pricing strategy is value.
“The value ramp is really just thinking through the level of value for your offerings,” Cobb said. “And not just how you value them, but much more importantly, your members’ perception of the value of your different offerings.”
While associations may be worried that it’s difficult to reset the value of online content when free has been so prevalent, Cobb contends value setting is really about storytelling.
“We’re seeing more organizations being conscious and thoughtful about this,” Cobb said. “They’re saying, ‘How do we start telling a more rational story about how we’re pricing each of these products according to the value that that they’re providing to our members and customers?’”
To flesh out the value of the offering, it’s important to do research. “It pretty much always requires extensive conversations with individual members and groups of members,” Cobb said. “If they’re taking your workshops or courses, if they’re attending your events, if they’re reading your publications, how are they then turning that around and applying that and getting use out of it?”
Doing the research on value with members not only helps with pricing but also member engagement. “You’re going to be getting to know your members much better,” Cobb said. “You’re going to find opportunities that you didn’t even know were there in the first place, that you’re going to then be able to fit into how you think about your portfolio of offerings.”
And once the value of is determined, pricing follows a simple, logical theory: “Your higher-priced offerings should be delivering significantly more value than your lower-price or your free offerings,” Cobb said.
Even once you’ve settled on a price, adjustments may still need to happen. To determine if prices are working, ask a few questions that get at whether the storytelling about the product’s value is effective.
“Is that story resonating?” Cobb said. “Are people responding to it? Do you need to adjust it to get to the point where the way that you are presenting the value you’re offering, the way it’s perceived, and the way your members are engaging with it all align?”
If the story isn’t aligning, adjust the storytelling, the value, or the prices. And adjustments can go down or up. “You might be leaving significant revenue on the table because the value is much greater than what you’re actually charging,” Cobb said.
As an association adjusts the story it’s telling about value, it must pay attention to how sales are affected. “You’re really able to see movements in buying activity based on the level of value that you’re providing,” Cobb said. “If you’re able see that, then you know that your pricing strategy is working and that you are in control of your pricing rather than your pricing being in control of you.”
While feedback from members is essential, there are also some pricing tools that can help organizations determine prices, such as theVan Westendorp Price Sensitivity Meter. These tools are especially helpful for pricing new products, such as hybrid events.
“There’s a lot of throwing spaghetti at the wall and seeing what sticks,” Cobb said. “But [pricing tools] are good ways to test the sensitivity around pricing, the willingness to buy, and to get a better idea of how the different segments you’re trying to serve are going to value the hybrid type of experience.”
Even with that, because hybrid is new, as are its related costs, Cobb said, “It is probably going to take a couple of years to really sort it out.”
Regardless of the product your association is offering, now is a great time set a new pricing strategy.
“Now is definitely a time to be strategic and intentional about the next pricing moves you make,” Cobb said. “We’re obviously at a pivot point, and the decisions you make right now could reverberate for many years. Definitely take the time to engage with your membership base and really get the information you need to price correctly.”
How is your association updating its pricing strategy for online and hybrid content? Share in the comments.
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