When it comes to managing training for your company, nonprofit organization, or educational institute, a learning management system (LMS) makes it simpler and more effective.
Employee onboarding, sales training, and customer training – it’s all easier with an LMS.With so many LMS platforms on the market, selecting an LMS provider can be overwhelming. You need a way to rule out the software that doesn’t fit your needs.
Price point is one of the first factors to consider when deciding whether an LMS solution is right for your training programs. LMS pricing can give you insight into many aspects of the software, like how many customization options and what level of customer service you can expect. The LMS pricing structure can also tell you whether you’ll get training services, custom development, or ongoing maintenance with your purchase.
Before you buy an LMS, read this blog to understand LMS pricing models. Then, you can determine which price range will best meet your needs and pinpoint a learning management system in that range.
Understanding LMS pricing packages
LMS prices and pricing structures vary, so it’s a good idea to get familiar with the different ways a provider might license their software. Most learning management systems fall under one of these pricing model categories:
Subscription-based pricing
In a subscription-based pricing model, your license to use the software is renewed monthly or annually. These fees should include all the features you need for your stakeholders’ various use cases, with no hidden costs or surprise fees.
Subscription-based pricing gives you pricing stability. No matter how many users you onboard or courses you create, you’ll pay the same recurring fee for your LMS platform. Plus, you should receive setup, integration, and customer support services under your subscription contract.
Per-user pricing
The cost of this model fluctuates depending on the number of users you onboard. This pricing model works well for smaller companies where only a few employees will join the training programs.
If you want to start small and expand your training services over time, this learning management system pricing model may be the one for you. You can add active users as needed, budgeting for each active user as you add them.
Per-course pricing
Many LMS vendors charge companies by the course, so you can purchase a course and then offer it to any learner in your organization.
This is cost-effective for companies that need a small number of courses but a large number of users – great for something like standard compliance training. A company can purchase the course from an LMS vendor for a flat fee and then offer it to all new employees for years to come.
Licensing/perpetual pricing
Large companies that want to make a long-term investment in professional development might prefer a license fee, which is often a custom pricing agreement between a business and an LMS provider.
The one-time fee grants perpetual access to the LMS and unlimited storage for course files and attachments. It also creates an ongoing partnership with the LMS company, which will continue to offer support as they consult on how to grow the company’s online learning offerings.
It’s a brilliant option for companies dedicated to their employees’ professional development and committed to an educated workforce.
Free and open-source LMS
If you’re a micro business with a limited training budget, you can use free online learning through open-source LMS options like Moodle and Open EdX.
These zero-cost learning management systems offer a wide variety of course creation features, but they don’t offer customization options, maintenance, or customer support.
Key factors influencing LMS costs
Some LMS providers are open to custom pricing, but it helps to have a firm grasp on the line items that drive learning management system prices higher before you negotiate. Keeping an eye on the factors listed below will help you keep LMS costs as low as possible.
Number of users
The number of active users in your LMS affects the cost. An “active user” can be defined as all system users, though it helps to divide them into learners and administrators so you know how many of each to plan for.
The projected number of users directly impacts per-user pricing models. Talk to stakeholders to get an accurate count of the learners and administrators from each department. That way, you can enter negotiations knowing exactly how many registered users you’ll need and how much that will affect the cost.
You should also try to predict how many users you might want to add in the future. As your company grows, so will your learners, and a user-based pricing model might become unnecessarily costly. You might want to consider a subscription pricing model instead.
Features and functionality
Before you sign a contract with an LMS company, be sure you know which features are covered in their basic package and which require additional fees.
Then, armed with a list of must-have features from your stakeholders, you can ensure each is covered under the standard contract. If you need to pay for a specific, custom feature, ask about the price and make sure your budget will cover it.
Unsurprisingly, a custom LMS costs more than an out-of-the-box model. LMS solutions that charge hefty fees for customization are a lousy fit for large companies that want to tailor the learning experience for their users.
Instead, you’ll want to find software that includes customization in the pricing model, allowing you to create a custom LMS that perfectly addresses your requirements.
Implementation and setup costs
Ask your potential LMS provider whether the setup is included in the software’s cost. Unless your internal IT department is well-versed in LMS setup, it’s smart to find an LMS that covers the setup’s price (and the workload) for you.
Once the LMS is set up, onboarding expenses can increase the LMS cost. Training takes time, so if you want your LMS vendor to cover the cost of training your active users, you’ll likely pay for that service in either the up-front cost or as an additional fee.
Data migration and system integration are critical to ensuring your LMS investment is a success. But those services are pricey if you pay for them à la carte. Instead, choosing an LMS provider that includes migration and integration in the price is a good idea.
Maintenance and support
An essential feature of a reputable LMS is reliable customer and technical support.
Like any software, your LMS will encounter system glitches and integration issues from time to time. If you want 24-hour access to global customer support via phone, email, and text, you might be facing a higher license fee.
LMS solutions that prioritize customer support are usually great at supplying regular software updates and upgrades. You’ll get a better-quality product, and when issues arise, you’ll enjoy helpful, responsive support from a live agent.
Content creation and management
Popular learning management systems know that users value easy content creation. After all, content creation and management are the heart of what makes an LMS a worthwhile investment.
However, under certain pricing models, content creation can be costly. There may be a limit on the number of materials you can create or the curated materials you can borrow from other sources.
You might pay an additional fee if you import learning materials from third-party resources within the LMS. Multimedia content like videos or interactive content like tests or quizzes could also drive up the cost, too.
Compliance and security
When you provide employee training as a company, you assume responsibility for your employees’ personal data. You’re legally required to adhere to data protection and regulatory compliance standards (like GDPR and HIPAA).
A reputable LMS should include data protection and security in its core offering. We wouldn’t recommend working with any LMS provider that didn’t make those features standard. But if security features will cost you extra, make sure you know how much they’ll cost and the level of protection you’re buying.
Detailed LMS cost breakdown
Here’s a quick breakdown of LMS costs. Ask about each of these costs as you meet with potential LMS providers:
Initial costs
- Setup fees
- Customization charges
- Training for administrators and users
Recurring costs
- Subscription or licensing fees
- Support and maintenance
- Hosting fees (for self-hosted LMS)
Hidden costs
- Additional charges for advanced features or modules
- Unplanned customization and integration costs
- Upgrading hardware or infrastructure
5 tips for choosing the right LMS
Following these steps, you’ll be able to identify the LMS software that’s the best possible fit for your company, your use cases, and your budget.
1. Define your requirements
Using a list informed by your stakeholders, identify your must-have features. Separate them from the nice-to-have features. Talk to your stakeholders about the budget and the LMS you can realistically purchase within it.
2. Evaluate multiple vendors
You can’t be sure which vendor is right for you until you’ve interviewed many of them. Start with a list of 20 or more. Remove vendors from the list that are either too pricey or too limited. Strike those that don’t meet your baseline requirements out of the box.
Request demos and trials of the 10 or so remaining. Compare their pricing plans and feature sets, as well as their reputation and customer reviews.
When you talk to LMS vendors, look deeper than their answers to your cost or features questions. Notice how quickly they reply and whether their sales tactics are pushy or respectful. The vendor you choose should be a delight to work with.
3. Consider the total cost of ownership
Analyze all of the costs associated with your LMS choice, like additional licensing fees or ongoing support. If you need to pay per active user, or if your LMS will only cover basic support services, it might not prove cost-effective in the future.
4. Analyze long-term costs beyond initial expenses
Think about how your needs will change over time. For example, you might need to add or subtract a large number of active users. Will that affect the price of your LMS? What about file storage – is it unlimited, or will you need to pay for that, too, as your content library grows?
5. Factor in scalability and future growth
Think about your company’s projected growth or learning needs and whether your LMS will scale to meet them. You need an LMS that employs robust software development practices. That way, however you grow, you’ll know your LMS can handle more users, bigger file sizes, complicated messaging systems, and an immense library of learning content.
LMS price is only one facet of choosing excellent software
With so many different LMS pricing models, it can be hard to calculate which learning platform will meet your learning goals while remaining cost-effective.
The best way to learn whether a cloud-based LMS fits your needs and budget is to demo the software and discuss the pricing model. That way, you can take a peek at the other important factors that contribute to choosing a suitable LMS, such as:
- Thoughtful content creation features and functionality at no additional cost
- Amazing customer service
- Gamification and awards to boost employee engagement
- Robust security and compliance you can trust
- Intuitive user access management and scalable file storage
- A dedicated onboarding specialist dedicated to your learning success
Reputable LMS platforms offer transparent pricing and fair terms and conditions without hidden fees that inflate the cost. Demo LearnRight today to see how a top-rated LMS flexes to meet your learning needs and your budget.
