5 Most Common LMS Pricing Models

There are several LMS pricing models out in the market and there is one that best suits your requirement.

Whether you are getting started with eLearning or even planning to change your LMS vendor, a full-scale investigation is of utmost importance. Offers by various vendors might leave you confused and create more questions in your mind. Each vendor has its pricing model; they work around several terms like ‘Per Active User’, ‘Registered User’, and ‘Actual User’, so on and so forth.

There are also several tools that offer a free trial to help you make an informed decision. For instance, the Thinkific Pricing model is subscription-based but offers a freemium plan as well as a free trial for businesses to be extremely sure about their decision of investing in this tool.

Below, we will talk about the 5 most common LMS pricing models:

1) Fixed or Registered Users Model

Also known as the Pay-Per-User model. In this model, you will be paying a fixed fee on the number of user accounts you need on your platform during each billing cycle. This model is used by companies that train their employees on compliance-related courses. The companies where the number of employees usually stays the same, this pricing model will work well. Organizations that train a fixed number of contractors, buyers, customers, etc; also opt for this pricing model. The organizations that opted for this pricing model should ensure employee motivation in using the LMS, otherwise, they will end up paying even for those who are not using the platform.

2) Monthly/Annually Active Users Model

Commonly known as Pay-Per-Active-User. In this model, you will be paying a fee only for the users who used LMS during a billing cycle. This is the most cost-effective pricing model. For example; if a learner signs up in the first month he will appear in that billing cycle and no cost will be incurred in the next month. Companies or organizations that need to add temporary users or conduct one-time training can opt for this model. This model is best for those companies too who would like to spread the training schedule throughout the year.

3) Duration based unlimited User access Model

Under this pricing model, the companies can get a license to use LMS for a specific period, for example, 1 to 3 years. Once the license expires you can renew the same. For organizations with a strong budget and a large number of employees, this is a good option to go with. The vendor allows unlimited usage of LMS once the buyer agrees to buy the license for extended periods. Before choosing these pricing models do your homework around the lock-in period, exiting cost, data transfer in case you look for alternatives.

4) Permanent Licensing Model

In this pricing model, you will have to pay a one-time cost of licensing the LMS and implementing it in the internal servers and data center. Once the implementation is done, the organization has to pay an annual maintenance fee to the vendor. This model is best for large organizations with a high number of users. If you wish to include new features or upgrade the existing features you may be charged extra for the same. This pricing model is probably the easiest one. Before opting for this model you need to thoroughly check the features included and not included in the offer package. If you choose unnecessary features which you might not need, you will end up paying extra.

5) Customized Pricing Model

The LMS vendors have started to offer customized pricing models. This model is gaining popularity with small and medium-sized businesses. The vendors are working towards understanding the requirements and budget limitations and offering the best LMS that may not include the complete version. Companies can limit the functions to the basic features required to train the employees and in turn, the vendor charges less in comparison to the cost of complete LMS.

Choose your plan wisely as it can make or break your eLearning project. The buying authorities must make sure that the right pricing model is in place which is in accordance with the companies needs. Before finalizing the model answer a couple of questions like, is it user friendly, interactive, whether all the essential features are included along with compatibility with other devices.