Learning management systems have now become an indispensable part of the corporate world. Organizations have started opting for the latest technology and web-based tools to train and upskill their employees. With various in-built features and effective add-ons, learning management systems help in providing a great learning experience to the organization’s workforce. However, while choosing a suitable LMS you should not focus only on its features. The pricing of the LMS also plays an important role in making or breaking this digital transformation of your organization.
The implementation of online training programs is supposed to reduce the employee training costs for the company by eliminating expenses like transportation, etc. Now, if your LMS comes with an unjustifiably high price, as compared to the benefits it offers, then it can fail the whole motive of cost-reduction altogether.
Therefore, whether you are choosing your first LMS or switching from your existing vendor, you need to match not only the features but also the pricing structure of the available LMSs with your requirements, before making any decision.
However, different brands follow different pricing models. Sometimes, LMSs from a single brand can also come with different pricing models. This is bound to cause some confusion among buyers. So, in this blog, we will list out 5 basic LMS pricing models to help you make an informed decision for your next LMS purchase.
1. Pay Per Active User
Under this pricing model, the vendor charges a fee based on the total number of active users of the LMS that you have during the billing period. Though different vendors may define ‘active users’ differently, ingeneral any user that interacts with the LMS can be termed as an active user. This interaction can be in the form of a simple login or completion of a certification course. The vendor shall fix a per head fee and then, you will be charged based on the same for the total number of users that interact with the LMS during a specific billing period.
A great example of the same is the Docebo pricing model.
2. Pay Per Registered User
Under this pricing model, you shall be charged for the total number of users that register on the LMS. For example, if your organization has 1000 employees, but only 500 actually sign up on the LMS. Then, the vendor shall charge you only for those 500 user accounts.
Every user will be required to create a login id and password to access the content on the LMS that follows such a pricing model.
3. Periodic Licensing
This is a pricing model that allows you to purchase an LMS for a specified period of time. This is generally monthly or annually. The vendor charges you a fee for the specified period without any count of active or registered users. However, some vendors may put up certain conditions like a minimum contract period.
Such LMSs usually come with standard features and packages. Any upgrade or update may require you to pay additionally to the vendor or a third party.
4. Perpetual Licensing
This is a little old-fashioned model of pricing, where the vendor requires you to purchase the license, perpetually, to use the LMS. It entails making a one-time payment to gain access to the LMS platform. The disadvantage is that you will almost always have to pay for Learning Management System upgrades and updates. You may also have to additionally download the software rather than accessing it on the cloud.
5. Custom Pricing Model
This a comparatively newer model, where vendors customize their LMS to reduce the cost and make it fit into the budget of the buyer. This usually involves removing the premium add-ons or plugins and limiting the functions to the basic version of the platform.
Vendors are progressively attempting to comprehend the organizations’ financial limits, and this is only one of many ways that vendors provide tailored pricing models.
There is no one-size-fits-all pricing model for every business. The right model for your business would be the one that helps you impart learning to your employees while allowing you to optimize your budget. Thus, one should take time to explore the market and make an informed decision.