Essential Questions about LMS Pricing Des Anderson Published on January 28, 2016 Budget is one of the first things you'll consider when investing in an LMS. How much does the LMS cost, and can I afford it, are two questions all purchasers will ask. But the answers to those questions aren’t straightforward. LMS pricing models vary hugely across the industry. And some pricing models are more transparent, and better value, than others. That can make comparing quotes provided by LMS vendors confusing. But beyond those first questions are seven others that will help you assess the true cost of an LMS. Question 1: Which LMS pricing models do you use? The first piece of information you need is the LMS pricing model. Understanding the model will help you to compare like-with-like when evaluating your options. Because purchaser requirements vary, some pricing models will suit your needs better than others. A full scope of your current and predicted LMS usage will help ensure that you can continue to afford your LMS as your user base fluctuates. First up, here’s a brief description of the most common LMS pricing models. Open Source: An open source LMS like Moodle can appear to be “free”. And while the software is free to download, evaluating options like Moodle should include costs for resources needed to configure and maintain the system. License Fee: A license fee includes a once-off upfront cost or a charge paid monthly or annually. You'll need to name the fixed number of user licenses you require at the outset. Most vendors using this model will ask you to pay an extra annual support charge ranging between 15-20% of the license fee upfront. Pay-Per-Use: Pay-per-use is similar to a “pay as you go” service and is calculated on usage of the LMS. How usage is costed varies. Some vendors calculate it based on how many learners are enrolled in a course. Others consider the volume of training materials distributed. Pay-Per-Registered-User: This LMS pricing model is only effective if you know exactly how many users your LMS will have. The number must be stable for the model to work. The cost per-user usually falls as the total number of users increases. Pay-Per-Active-User: The size of a user base usually isn’t static enough for a registered-user model to work. This model is far more flexible. Instead of paying for all registered users, only those who access the LMS within a specific period are counted. Once a user becomes active, there’s no limit to their use of the LMS. Question 2: What happens to inactive users? Whichever LMS pricing model you choose, ask the vendor about what happens to the training histories of users who are no longer active. Some vendors will force you to pay for historic learners who have left the company and will never use the LMS again. Others allow access to training records for active users only. If you need to maintain data on past learners, that means the size of your registered user base can quickly sky rocket. It’s a common issue in regulated industries that require training history records to be maintained for 7 years for compliance or legal reasons. At LearnUpon, we make it easy to switch between pricing plans as the size of your user base changes. We also maintain records both for active and inactive users at no additional cost. You simply set a user’s status to inactive. All of their records will still be available and you can reactivate them if they return. While you can delete their training history if you prefer, the choice is yours. Question 3: What features are included in each price plan? The number of features available will also vary between LMS pricing plans. Before submitting a request for proposal, it’s a good idea to do some preliminary research to define the list of features you need. That will allow you to rule out vendors who don’t offer essential features and help you to judge the value of each price plan. With an open source LMS, you’ll have the freedom to customize the platform to suit your needs. But while additional features won’t necessarily equal higher costs, each feature will still require internal or external resources to maintain it. Feature selection may be less important if you choose a license fee LMS pricing model. The fee usually includes all features, those you need and those you don’t. Per-user pricing usually offers access to tiered plans, depending on the size of a user base and the features included. At LearnUpon, for example, we offer a core set of essential features on an entry-level Starter plan. The size of your user base and features required will determine the best plan for you. If you need access to complex functionality, like SSO or API features or classroom-based training and ILT modules, you'll need to consider a higher value price plan. Advanced features like white labelling, multiple language support and Salesforce Integration, are often needed by organizations with a user base that fits the plan. Question 4: How many portals do I need? A portal allows you to divide learners and give them a branded experience of the LMS very different to that seen by other groups. Many organizations need just one portal to serve all learners. But others, like professional training companies or parent organizations, sometimes need multiple portals to deliver learning to separate audiences. If you need more than one portal, ask if the option is provided by the LMS vendor and how costs are calculated. LearnUpon’s client portal feature allows you to have completely separate branded portals for each audience. You can also share your active user allowance between portals. Not all LMS vendors offer that flexibility and some don’t offer portal functionality at all. Instead, you must create completely separate accounts for each audience. Each account is billed separately, with no room to split allocations between portals. That means if you have portals with low usage rates, the vendor prevents you from transferring unused licenses to portals that need them. Question 5: When do I pay? When and how often you pay also varies between LMS pricing plans. You should consider an LMS vendor that insists on locking you into a long-term contract with caution. An annual contract that doesn’t include an exit cost shows that an LMS vendor has confidence in their platform and isn’t trying to trap you in a system that might not suit your needs in future. That’s one reason we don’t insist on long-term contracts at LearnUpon. All our plans are billed annually and do not have to be renewed. This means that our interests are aligned with our customers, ensuring they achieve eLearning success. If you’re sure you’ll need our LMS for more than one year, our plans include significant multi-year payment discounts. Question 6: How much control do I have over costs? Even if an LMS pricing plan looks transparent, you should ask about how much control you will have over costs. How will you track the number of registered or active users, for example? How hard are the upper limits on your LMS price plan? At LearnUpon, we don’t police upper limits harshly. If you run over your limit by 10-20 users a month, we don’t penalize you. We’re delighted to see our customers succeed and grow. If you find that your user access limits are exceeded for a couple of months, you can simply upgrade to a higher plan. But do customers ever need to upgrade? If a customer regularly exceeds their plan by a significant amount (no hard rule but it’s usually about 10%), their Account Manager will get in touch to suggest a plan better suited to their needs. Our customers appreciate this personal approach, rather than an automatic system lockout. You can also take advantage of custom plans at our Enterprise level, where pricing is dramatically discounted based on usage volumes. We also make usage levels simple to track. You can easily monitor your monthly activity from your billing screen and budget accordingly. You can disable a user while retaining their history, for example. That user will be officially inactive and won’t be included in your billing. That flexibility gives you full control over your active user count and costs. This approach to LMS pricing is most valued by purchasers who use our eCommerce storefront to sell courses online. The last thing these vendors need to worry about is what happens if they hit their plan limit and a potential customer is prevented from buying a course. With our LMS pricing model, that’s never a worry. If you're on our Silver plan, which includes 500 active users, and one month user 501 comes along, they’ll be able to buy the course as if they were your first active user that month. Question 7: Are there hidden costs not included in the price plan? It’s wise to explore beyond the price named by an LMS vendor to confirm exactly what is and is not included. Hidden costs, like set-up and training fees, billing for inactive and historic users, and charges for switching between plans or cancellation costs, can quickly make what once seemed like good value unaffordable. Our LMS pricing model is totally transparent. You can upgrade, downgrade, or cancel anytime at no extra cost. There are no set-up charges or hidden fees. We also provide training free of charge and our award-winning 24/7 customer support is included in all plans at no extra cost. Being completely transparent about pricing is the first sign that you can trust us to look after your needs if you choose to become a customer. Simplify Your Training Delivery Today Train your employees, partners, and customers with LearnUpon. The powerful learning management system that has the features and a knowledgeable team you need to achieve training success. Check out LearnUpon's pricing and get your free trial and demo today!