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A Pocket Guide On LMS Pricing Models

by Radhe Gupta
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After thorough research with the numerous options available in the market, you must have shortlisted the best suited learning management system for your organization. The study and comparisons involved are no less when it comes to upgrading or changing the existing system. 

The next step is to understand the cost and the pricing model as this factor plays a critical and decisive role in finalizing the vendor to partner with. Gathering knowledge about various pricing models will help you in synching the best suited pricing model empowering you to negotiate and close the best deal with maximum benefits. 

Mentioned below are the standard pricing models that the elearning companies follow. By choosing the right kind of pricing, you can avoid later surprises.

Pay Per User: Pay per user is a model where you pay a fixed cost for a minimum number of users. The payment mode can be monthly or annual. The benefit of using this model is that as the group of users increases, the cost can be reduced. The cost being fixed provides a clear expense being done and the budget allocated can be strategically utilized. 

This model can be chosen by companies where the training is mandatory for employees. The only drawback is that you will have to bear the cost of the users even if they do not log-in to pursue the course.

For medium and large enterprise business, with an excellent user interface, Absorb LMS Pricing is competitive and best in the market. 

Pay Per Active User: This is the second most popular pricing model being opted by the companies. This model enables you to subscribe to an unlimited number of users but charges you based on the users who are actively using the LMS services. This saves the cost of the user who might register once but do not pursue the course, the ghost users. You pay for actual usage only thus it turns out to be economical. 

However, the price provided is bundled with minimum guarantee users. This means that you will have to pay the price for at least a fixed number irrespective of that number being fulfilled. Any users above this minimum threshold are charged on the number of active users over and above the decided threshold count.

This model is best for enterprise training where you are not sure of the number of users who will enroll for the course.

License Fee / Subscription: It is like subscribing for your favourite OTT platform. You pay a one time fee for the year long service. You get the leverage of adding as many users and courses you want. The subscription or the license fee is based on the number of features you opt for in the package. However, including too many add on features might become challenging and expensive later. It is advised that a thorough homework should be done before finalising the given option. 

Open Source LMS: The organization with low training budgets normally uses this kind of LMS services as you do not have to pay for these courses. However, this comes with a lot of restrictions and hidden costs. To put in simple words, the code of the LMS is provided for free. If you wish to include the features or add-ons that would incur the cost. This can be used as an advantage as well as it provides you flexibility. You can customize your LMS as per your needs and requirements. If you have strong technical skills, you can reap the maximum benefit and can reap the best by customizing it. You also get the flexibility of adding unlimited users.

Conclusion: You can choose the pricing model mentioned above based on needs and requirements. Having said that, you can derive the cost by adding up the cost of the LMS, hosting charges, setup fee, required plug-ins cost and an IT resource cost.

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