Freemium versus Premium—Will Your Customers Pay?

Barry Kelly
Jul 6, 2015 11:22:00 AM

They say the best things in life are free.


That may be true for a lot of things. But when it comes to online learning we’re seeing a very different reality. Often, when companies come to us to explore our white label learning platform, they’ve got one question on their mind:


What business model should we adopt—freemium or premium?

There are many merits to both, and it will rely very much on the function of learning in your business ecosystem. If you are a publisher or media organization, in many cases you are looking at monetizing your content. For consumer brands or multi-channel retailers, offering free learning options opens up opportunities to increase conversion, bolster engagement, and drive customer lifetime value.


For those in the premium category, here are a few reasons why the premium approach can be bountiful.

  • In 2016, 5.8 million Americans took online courses according to Online Learning Consortium.
  • According to IBIS Capital Partners UK, the global online learning market currently stands at $91 billion.

When approaching the premium model, the first question normally is:


Do we need to create new content from the ground up?

The answer is: "No." Even though content may be freely accessible in the market (books, ebooks, DVD’s, white papers, etc.) it does not mean it cannot be repurposed. In fact, existing editorial content will serve as the bedrock in your course creation strategy.


The next and obvious question is:


Why would customers pay for something they can get for free?

We know. You’re already churning out freebies—ebooks, weekly list-building emails, cool infographics, maybe a spiffy scribed video, a white paper or two.


You’re smart to do that. But what is critical to understand is that today’s learners will pay for clear paths that help them advance their skills, professions, and hobbies. Check out this great article from Financial Review: "People will pay for quality online learning, survey finds." Learners don’t want to waste time surfing the web looking for the most trusted content, the best video tutorials, the top thought leaders. What they want is a straightforward way to reach their goals.


That’s why you need to curate your content.


In the process of curation you bring the value—industry experts, editors, authors, and contributors who know how to most effectively get learners (and customers!) from point A to point B successfully.  


It’s vetted, trusted premium content delivered in a fully branded learning experience that’ll win you new business and earn customer loyalty.


As far as pricing strategies and business models go, you’ve got room to experiment. We’ve seen clients launch successful short form self-paced and longer form instructor led courses (and plenty of variations in between). And with price points from $8 all the way up to $1200 for multi-week courses with industry experts. 


Instead of weighing freemium versus premium, here’s the question you and your team really need to answer:


How quickly can we get our revenue-generating online learning products to market?

Pretty much as soon as you want. You already have all the content you need to turn learning into profit.


What about all the free content we already have?

There’s absolutely nothing wrong with repurposing content to build guided learning experiences. Scan your business and you’ll discover assets hiding in plain sight—how to tips, access to experts, and the insider info that people will pay a premium for.

  • The book you authored? Cross-sell it with one-on-one coaching sessions.
  • Those weekly email tips? Use them to build out a certified mastermind program.

Remember, a premium online course puts you and your business in the driver’s seat. Build a learner-friendly experience and your customers will be happy to come along for the ride.

NOTE: Some statistics in this post were updated in February 2018 to better reflect the online learning landscape.


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