6 Different Models To Consider Regarding LMS Pricing
There are a myriad of things to consider when choosing LMS software. Is it user-friendly? Does it have all the essential features? Will it give your modern corporate learners the mobile-ready resources they require? One of the most important factors is the cost. Can your organization really afford the Learning Management System, and is it worth the investment? The LMS platform must have a pricing structure that aligns with your organization's needs. Here are the 6 LMS pricing models that you may want to keep in mind.
1. Pay Per User
This fee structure involves paying for each person that uses the LMS, which is usually cloud-based. The LMS vendor is responsible for hosting the LMS platform. This includes regular updates and upgrades. As a result, you don't have to devote resources to maintaining it. Instead, you can focus on developing and deploying effective online training content for your audience.
2. Pay Per Registered User
In this instance, you pay for each user who is registered in the LMS. The user must create a login and password in order to access the LMS platform. You only pay for users who voluntarily sign up, instead of every member of your organization. This is also an ideal option for organizations who wish to sell their online training courses.
3. Pay Per Active User
Paying per active user is one of the most economical options, as you only pay for users who actively use the Learning Management System. There are two common approaches to this LMS pricing model. The first is to charge for each user who accesses the LMS during the billing cycle. After their initial login, they are able to access your entire online training course catalog at no extra cost. For example, a corporate learner who signs up in January will appear on that month's bill, but you will incur no costs for them in February. The second approach is to charge for each active user per month. Using the same example, you would still pay for the corporate learner in February, March, and so on, provided that they are still active in the LMS.
4. Licensing
You pay a monthly or annual license for the LMS. That includes an unlimited number of users, active or otherwise. Some LMS vendors also require a commitment. For example, you must sign up for a 2-year contract. The license comes as a package, with pre-determined features. If you want to add on upgrades you usually have to pay an extra monthly or yearly fee.
5. Purchase Outright Or Perpetual
If you don't want to worry about monthly or annual fees, you can opt for an LMS that offers outright ownership. This is also known as a perpetual license. It involves a one-time purchase that grants you access to the LMS platform. The downside is that you usually have to pay for upgrades and updates to the Learning Management System. In most instances, you must also download the software instead of accessing it via the cloud.
6. The Free Alternatives
If you're working on a tight eLearning budget, there are two common types of free LMS solutions to look for:
a. Open-Source
These LMS platforms are free to use, but usually require some tech experience. This is because they are based on an open-source code that requires programming and HTML knowledge. However, they typically have active online communities where you can find tips, tricks, and advice, as well as online training tutorials and FAQs.
b. Freemium
This free alternative requires less tech know-how, but has limited features. In some cases, the LMS vendor provides a basic version of their paid offerings. It's the same LMS, minus the support services and built-in assets. You're able to add on extra features and services for a monthly fee.
3 Extra Tips To Choose The Best LMS For Your Organization
1. Create A Must-Have List
There are some features that your LMS must have in order to warrant the investment. These must-have features have a direct impact on the decision-making process. For example, you need a tool that is easy to use and feature-rich. You're also unsure about how many corporate learners are going to access the LMS. This rules out open-source and freemium LMS platforms, as they require technical experience and come with basic features. However, a monthly or annual license may be ideal, thanks to the fact that you can have unlimited users.
2. Know Your Price Range
How much can you actually spend on your new LMS without compromising other aspects of your Learning and Development? You must know your price range in order to stay within budget. Your profit margin, eCommerce course sales, and other financial indicators may come into play. You should also carefully evaluate the features and benefits versus the cost of the tool.
3. Do A Corporate Learner Roll Call
Do you already have an estimate of how many corporate learners access your LMS each month? Are these corporate learners actively participating in the online training course? Or do they only login to the LMS platform occasionally? Conduct surveys and analyze your current LMS metrics to take a virtual roll call. This gives you a clear idea of which LMS pricing model is a good fit for your organization. For example, a pay-per-active learner option is wise if you have a limited number of active users each month. However, more than 100 active users might make a monthly or annual license a more economical choice.
The price may not be the only consideration but it's at the top of the list. You need a Learning Management System that your company can afford, without sacrificing the features you need. Sign up for free trials, read reviews, and reach out to other online training professionals for recommendations. This can help you choose the ideal pricing plan for your organization based on your goals and objectives.
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