How To Project Revenue From Your Online Course
If you’ve ever thought about launching an online course you’ve likely asked yourself one of these two questions: how much should I charge? and how much can I expect to make?
You’re not alone.
When I set out to launch my online courses - I went back and forth between how much I should charge and ultimately, how much revenue I could bring in.
I wanted two things - to maximize the number of people I could support and to maximize the revenue the courses generated so that I could invest in other projects.
But after going down a rabbit hole of trying to find the perfect answer, I discovered a few things.
First, I realized that I spent way too much time Googling the answer on the internet.
And Secondly, I realized that it’s not as complicated as I made it out to be.
The good news is, there are only a few numbers you need to focus on in order to either determine what to charge or to predict how much revenue you’ll generate.
The Marketing Numbers That Matter:
If you’re looking to predict how much revenue your online course will generate you’ll need to know the following:
Your Audience Size. For most people this will be the size of your email list. If you’re primarily selling your online course through webinars and your list then the size of your email list is key. However, if you don’t have an email list and want to sell an online course, you may focus on your online following - for example your Instagram followers or the size of your Facebook Group.
Conversion Rate. To determine how much money you’ll generate from your online course, you need to know on average what percentage of your audience will invest in your course. If you’ve launched online courses before, then you’ll have a benchmark number. Said another way, you can look at your average conversion rate and predict that you’ll do about the same. However if you’re just getting started - many people net out between 1 - 3%. If you’re conservative, you can guess that somewhere between .5% and 1% of your audience will invest. If you have a highly engaged and warmed up list, you may guess that between 3 -5% of your audience will invest. You won’t truly know until you launch but staying within the 1 - 3% range will help you predict your revenue. Personally, I like to be conservative when I’m launching something I’ve never done before and assume a 1 - 2% conversion rate.
Price. The final piece to projecting your income is having a price for your course. Once you know how much people are investing, you can start projecting your revenue from the online program.
Predicting Your online course Revenue:
Projected Number of Sales = Audience Size X Conversion Rate
Projected Sales Revenue = Projected Sales X Price of Course
The above is a simple way of calculating your projected revenue.
If you have an audience of 500 people and you guesstimate that 1% of your total audience will buy, then you project that 5 people will buy.
If your program is $299, that means you’ll generate $1,495 from the sales of your online course.
But I like to make things a bit more interesting as well.
SELLING an online course FROM WEBINARS:
Let’s say that you are running a campaign where every week you’re inviting people to sign up for your webinar.
By doing the webinar every week, you’ve realized that 2% of people will buy either live on the webinar or from the email sequence (you’ll have to determine which numbers are true for you, this is purely an example).
To project your revenue you’ll need two additional numbers:
Your Webinar Registration Number: The total number of people that register for your webinar.
Your Webinar Show Up Rate: The percentage of people that sign attend your webinar after signing up.
With these additional numbers, you’ll be able to determine your conversion rates:
Projected Webinar Attendees (this would replace your Audience Size in the earlier example) = Webinar Sign Ups X Webinar Show Up Rate.
Projected Number of Sales = Projected Webinar Attendees X Conversion Rate.
Projected Sales Revenue = Projected Number of Sales X Price
The above is a way of calculating your projected revenue selling your online course from webinars.
If you have 100 people attend your webinar and you guesstimate that 2% of your total audience will buy, then you project that 2 people will purchase your course.
If your program is $299, that means you’ll generate $598 in sales.
If you run that webinar every week to 100 people, then you can guesstimate that every month you’ll generate approximately $2,392 from your online course (assuming the month has 4 weeks).
the benefits of calculating these numbers
Using the above formulas to project your online course sales can help your business in a variety of ways.
If you do the math, you may realize that you’ll need to increase the cost of your online course to reach your desired revenue numbers.
Once you start running your marketing campaigns or webinars, you may discover that you’re generating more or less than you predicted. In either case, you can look at where your projections are off and adjust accordingly.
If your conversion rate is lower, you may want to work on your sales message.
If your webinar show up rate is lower, maybe you need to send a few more reminders to ensure people attend your webinar.
If your numbers are higher, maybe you’ll want to invest money in growing your audience.
By becoming comfortable with the numbers, you’re able to make smarter decisions for your business.