This article contains:
- How perceived value influences your pricing
- Factors that contribute to your price point
- How to price live stream memberships
- Bright ideas for pricing your live streams
You’ve put a lot of thought and work into your new live stream programs and you’re giving viewers what they want to see. But there’s one important part of creating a live stream that you might not have taken the time to plan out yet. How do you price your livestream to maximize revenue?
What Should Online Classes Cost?
Setting the right price for your live stream services can be difficult because there are no true virtual industry standard rates. Pricing varies, based on factors that include expenses, instructor experience, reputation, type of service, and frequency of the live stream. While figuring out a fair and profitable pricing strategy may feel overwhelming, it’s easier than you think—let’s walk through it together!
How Perceived Value Influences the Price You Set
Perceived value is what customers think your services are worth to them. Perceived value and the price point you set for your live streams affects everything from launching the right kind of marketing campaign to the number of registrations and amount of revenue you earn.
Price signals two things to a customer:
The first signal is negative—the customer has to part with money in exchange for attending the live stream session.
The second signal is positive—the price of your live stream conveys quality, and therefore value to the customer. The higher the price, the greater the perceived value of your live stream.
If a customer’s perceived value of your live stream is greater than the price, they’re more likely to book it. That means that as a business owner, your job is to set a price that’s low enough to attract the greatest number of customers without sacrificing the perceived value of your live streams. That’s a pretty tough balancing act! Which may cause you to wonder—what happens if you get the price wrong?
Pricing Models: Low vs. High
There are two basic pricing models to compare when setting live stream prices:
High Volume/ Low Price
In this model, the goal is to sell as many units of a low-priced item as possible. The low price point is offset by selling many of them, which is where the profit lies. With this model, you’d set a low price point for your live stream with the goal of attracting as many registrations as possible.
For live streams, the high volume/low price model may yield higher registrations because customers think they’re getting a deal. Be careful with this, because it can also give off a vibe of a low-quality stream. If you host large classes, such as a fitness class, this model is great for you!
Low Volume/High Price
This model sets a higher price, with a restricted volume of an item. With this model, you’d set a higher price point, and cap the live stream session at a certain number of registrants.
The low volume/high price model can also be a great choice Customers tend to pay for higher quality streams, but they will be turned off if the price isn’t justified so make sure your streams are at a professional level. This model can be a great option for one-on-one consultations. For example, product purchases like personalized hair color or skin care kits that include a live stream demo, or educational live streams where customers can ask questions and receive personalized attention.
What Factors Go into Setting Your Price Point?
To make your live stream services profitable, it’s important to make virtual customers feel like they’re getting their money’s worth from the class—without undercutting the value of your in-person offerings. By comparing your pricing model with local market averages, you can easily settle on the price point that will attract the most sign-ups.
When setting your prices, consider:
- What do you charge for this service in-person?
- Is the service price different for members vs. non-members?
- What do competitors in your local market charge for similar services?
Get More from Your Live Streams with Memberships
To gain long term clients, give your membership tiers a re-vamp to include and complement your new virtual menu. Vagaro makes it easy to create different membership types, tiers, and prices to suit your business needs. Here are three ways to price memberships:
In-house Membership. This model is the traditional membership model, where add-on classes (in-house or virtual) cost a fee not covered in the membership fee. This membership would be traditionally priced based on your local market conditions.
Virtual Membership. This membership is exclusively virtual, so you could price this membership lower to attract more members. Here, you can create customized access tiers, like a 12-session membership, a 25-session membership or unlimited live streaming sessions.
Hybrid Membership. This membership model includes the best of both worlds: access to your services both in-house and online. For this model, you can set the price higher than either a traditional in-house membership or a virtual membership. Like a virtual membership, you can create different access tiers at different price points, to attract the greatest number of new members!
How Will You Set Your Live Stream Prices?
Here are bright ideas to use when you set prices for your live stream menu!
Price live stream services 10% less than in-person sessions
Host a free introductory live stream class, then offer attendees a limited-time membership discount if they sign up during the event!
Offer a membership discount to non-member live stream registrants
Create membership tiers! Each tier will have different perks like access to your repository of recorded classes, a specific number of monthly live stream sessions, or all-access pass to unlimited stream events
The Price Is Right
Any time you add a new offering to your service menu, making sure that you’ve priced it right can be a little tricky. Your new live stream service menu holds many new opportunities to expand on your in-house services, set attractive price points for any level of service, and create a “side hustle” for your business that’s worth its weight in gold!
Live streaming services and classes are a flexible, cost-efficient option that allows you to set a price point that attracts customers from anywhere in the world to sample what you have to offer. Vagaro’s new integration makes it easy to go virtual and create a live stream service menu that’s priced to pack them in! Visit our support page for step-by-step guidance to get your Vagaro account set up to start streaming and give your local—and global! —customers something to keep tuning in to.
Icons: Mia Montemayor via Vagaro