What should you be paying for your LMS?
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With the year’s end approaching, every CLO, CTO, and CFO is thinking about closing out the 2017 learning and development budget and looking to save money and increase training efficiency in 2018.
While there is no one-size-fits-all cost structure, it’s important to understand various LMS pricing models so that you can compare quotes as best as possible. Consider your training goals, your anticipated monthly usage, your active learner volume, your budget, and your company’s billing structure.
Here are two of the most common LMS pricing models.
A flat rate is an all-inclusive pricing model. It’s one of the simpler ways to purchase an LMS. Companies purchase an LMS for a flat fee, which includes access for as many users as are designated. This fee is usually billed monthly.
Note that even if a company offers flat-rate pricing, the number doesn’t always reflect the cost of integration, implementation, and user rates.
If you’re stuck paying high LMS costs for employees who never access your LMS, an active-user model could help to reduce your LMS cost and free up some of your L&D budget for enhanced training materials.
This common model requires you to pay a flat fee for each learner in your system. In addition to your monthly learner bill, there’s usually a one-time setup fee.
An active pricing model, or metered approach, can mean many different things. Make sure you understand what your provider means by “user.” This metered approach can mean a fee-per-user-per module, a fee based on the number of class attendees, fee-per-course-per-user, or a fee based on elements or materials delivered per course.
How do you decide what type of pricing model works best for you and your learners? Consider how many of your learners will be using the LMS and how often you expect your learners to enter the LMS and access various learning modules.
In many cases, you may have learners who only need to access your LMS quarterly or yearly for compliance needs. Other learners may enter the LMS daily for just-in-time learning on their mobile devices.