In today’s dynamic corporate landscape, learning management systems have become indispensable tools for organizations to build efficient and scalable training programs. However, given the wide range of LMS pricing models offered by top market vendors, selecting an economical solution can be challenging.
In this article, we’ll discuss the most popular LMS pricing models offered by leading software companies to help you find a solution that’s ideal for both your training needs and your budget.
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Article Roadmap
- Popular LMS Pricing Models
- What Is an LMS?
- Tips for Choosing a Cost-effective LMS
- Additional Costs
- Premium vs. Budget-friendly Models
- Price Highlights of Popular Solutions
- Next Steps
Popular LMS Pricing Models
The LMS market is booming. More employees are looking for competitive training programs, and employers are boosting their L&D budgets to improve their learning experience, a priority for 46% of HR leaders.
But it doesn’t stop there. It’s also important to invest in a solution that’s easy to use and capable of meeting your specific business needs without costing you a fortune. Helping our employees hone their competencies in a continuous learning environment ensures better ROI down the line, but it shouldn’t cost an arm and a leg to make that possible.
Leading market vendors offer several pricing models to choose from, with the added benefit of free trials and demos. Whether you have continuously changing training needs or long-term, fixed requirements, there are options for all types of businesses.
Let’s go over some of the most popular LMS pricing models:
1. Pay per User
Under this model, you pay a flat fee for a given number of users, billed monthly or annually. This model comes with tiered pricing and is suitable for organizations that have a fixed number of learners. For example, if you register 40 users for a month at $6/user, your total cost is $240.
This model works on a bulk-discounting system: the price decreases with an increase in the number of users.
Pros
- It allows you to plan your budget ahead of time.
- You can pay to add more users.
Cons
- It can result in overpayment if fewer users are active on the system.
- You have to pay for all users even if they don’t use the system.
2. Pay per Active User
This type of model allows you to add unlimited users to the system, but pay only for those who “actively” use the platform. It’s billed based on each course, module or other features that are used by learners, who can also opt out of using specific functionality based on their training requirements.
Pros
- It’s flexible, since you only have to pay for active accounts and not when your platform isn’t in demand. This also makes it easier to adapt to your learners’ changing needs.
- The lower upfront cost makes it more accessible for small businesses.
Cons
- Pricing is usually bundled. For example, if you’ve signed on to support 500 users/month for $600, but only 480 people use the platform, you’ll have to pay the fixed amount regardless.
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3. Pay as You Go
Under this model, you can purchase credit packages for each user that enrolls in your courses. Vendors don’t charge registration, setup or hosting fees, and pricing depends solely on usage. For example, five credits for one user at $2.50 per credit would cost you $12.50/per user.
You can purchase extra credits when your courses are in high demand and are generating more revenue. You might also get a discount for buying credits in bulk.
Pros
- Since payment depends solely on demand, you don’t have to spend money when your platform isn’t in use.
Cons
- It can get expensive when there’s a hike in the number of users.
4. Licensing
Also known as a subscription model, licensing allows you to pay a fixed price for a periodic license, billed monthly or annually. Vendors usually offer multiple pricing options with a varied set of features. You can add more users and features to your platform by simply upgrading from basic to more advanced plans.
Pros
- It offers flexible pricing options for different needs.
- You can easily add new features to your existing platform with a plan upgrade.
Cons
- You may have to pay for some extra features depending on the package you choose.
5. Free
This pricing model applies to open-source software, which comes with a publicly configurable source code. While users can modify and distribute the code for free, services like personalization, third-party integrations and maintenance usually come at a cost.
Open-source platforms also require special technical knowledge to operate, which means you might have to hire a skilled IT team.
Pros
- Because they’re free to use, free LMS programs can help cut down your L&D costs.
- It’s easily scalable since you can modify the code to accommodate growing needs.
Cons
- It’s difficult to implement without IT knowledge.
- Lack of vendor support is a common issue.
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What Is an LMS?
An LMS is a software tool that helps create, manage and deliver learning and training programs. It’s used by organizations and educational institutions to design courses, conduct and evaluate assessments, report learner progress, generate performance insights and more on a centralized platform.
An LMS allows learners to view training activities on a single dashboard. Source
The main features of an LMS usually include:
- Course creation and distribution
- Progress tracking
- Data reporting
- Gamification
- Third-party integrations
- eCommerce
- Collaboration
Some popular LMS tools include D2L Brightspace, Moodle, Blackboard Learn and Skyprep.
Tips for Choosing a Cost-Effective LMS
Based on an industry report, talent attraction and retention are critical areas for organizational success in 2023, and 8 in 10 HR managers believe training is essential for both. An LMS is a budget-friendly tool to help businesses provide valuable learning opportunities to employees and help them develop the latest knowledge and expertise.
How much an LMS costs can vary based on several factors, including: the features and services offered, the size and type of your business, and the number of users and courses. While some pricing models are designed on a per-user basis, others depend on the number of features you’re using, or advanced capabilities required for customized solutions.
Finding the right solution in a sea of options can feel overwhelming. If you’re ready to start searching for an LMS, here are some steps you can take.
1. List Your Requirements
Determining LMS requirements allows you to identify important features from nice-to-haves and tailor your training program to meet your learners’ specific needs.
Make a list of the top features that can help you achieve your business goals and define how you want to put them into action. For example, if you want to simplify communication for a dispersed workforce, you’ll benefit from an LMS that provides advanced collaboration tools, like video conferencing, group chats and messaging.
Create new meetings within the Zoom app. Source
2. Decide Your Budget
Key considerations while deciding your budget include:
- How much you plan to spend on the LMS: This is the final figure that you come up with after considering things like upfront costs, training and onboarding, and installation and setup.
- The margin by which you can increase your budget: While sticking to your budget is important, you may want to keep a rough estimate for future expenses, like add-on features, ongoing maintenance, data migration and extra customer support, to ensure you’re covered if they come up.
3. Determine the Number of Users and Courses
The number of users and courses are primary determinants of how much an LMS will cost. Consider the following questions to get a ballpark figure:
- How many learners will use the system during a billing cycle?
- For how long will they use the software?
- Which types of courses do you want to offer? Do you have any industry-specific requirements?
Many solutions also offer discounted rates for bulk users billed monthly or annually.
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4. Consider Scalability
Your software’s scalability depends on how well it can accommodate changes in your user base or content. Scaling could mean an increase in the number of users and locations, expanding content types or needing more advanced reporting modules.
A scalable LMS helps you:
- Accommodate new learners and courses without switching platforms.
- Make your eLearning content accessible to a large number of users.
- Maintain a positive user experience with a consistently functioning interface and quick load times.
- Store and manage large amounts of data.
- Generate advanced performance insights.
Talk to the vendor about charges for additional users and associated training, extra features, increased storage and other costs that you may incur while expanding your platform.
5. Factor in Customizations
While most off-the-shelf LMSs offer the basic features to create a valuable training program, some specialized solutions provide a customizable platform to meet industry- and user-specific needs.
Customize your homepage using drag-and-drop tools. Source
Customization options include:
- Specialized courses for regulatory compliance.
- Embedded content from external sources such as online websites and company databases.
- CRM integration to track eCommerce sales.
- Content delivery features like text-to-audio conversion and screen reader support for users with special needs.
- Personalization capabilities like branding and white-labeling.
- Custom reports to track performance metrics aligned with learning objectives.
Many solutions like TalentLMS and AbsorbLMS provide custom or quote-based pricing options, allowing you to pick the features relevant to the specific needs of your learning environment.
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Additional Costs
Here are some more costs that you can consider while estimating your budget:
- Implementation: It covers things like data migration and content upload, employee onboarding, hardware installation, eCommerce setup and more.
- Maintenance: Software maintenance includes services like system upgrades, inactive user deletion, content updates, data backups and troubleshooting.
- Training: Some vendors charge extra for on-site employee training, so take that into account if you think your staff will need it.
- Hidden Costs: After purchasing the software, you may have to pay for things like bug fixes, customization specifications and additional employee training.
- Mobile App: Some vendors charge extra for the mobile app, or provide it as part of a subscription package.
- Add-ons: You may incur these costs on purchasing extra features, license upgrades or adding users, locations and third-party integrations.
Premium vs. Budget-Friendly Models
No two businesses are the same, and neither are their L&D requirements. But most businesses can benefit from certain features and functions. Many LMS solutions offer different plans that come under specific categories, like basic, premium and enterprise. These are designed to cater to organizations of different sizes, employee strengths and training needs.
Whether an LMS pricing model is premium or budget-friendly depends largely on the features and functionality it offers and the level of support provided by the vendor.
Let’s take a look at these two pricing types.
Premium LMS
Premium LMS platforms are suitable for large organizations or institutions with complex training needs.
These solutions offer robust features like authoring tools, varied customizations, extensive reporting and prompt customer support channels. You can purchase add-on features and register unlimited users and courses by paying a monthly or annual fee.
Some premium LMS providers charge a one-time setup fee in addition to the recurring subscription cost.
Budget-Friendly LMS
Budget-friendly LMS options are generally more cost-effective, with free or very low-cost options. They’re more suitable for small to medium-sized businesses or organizations with simpler training requirements. These platforms provide the basic functionality to deliver, manage and track online training.
Some providers offer tiered pricing plans based on the number of users, alongside affordable or free versions with limited features.
Price Highlights of Popular Solutions
Here’s how some of the top LMS solutions on the market compare in terms of cost.
Tovuti
The solution provides annual and three-year pricing packages for 0-50 to 100K+ users.
Some pricing options include:
- 0-50 users: One year for $11,160/year. Three years for $775 billed monthly or $9300 billed yearly, with $2,500 in setup fees.
- 1.5k-3k users: One year for $51,840/year. Three years for $3600 billed monthly or $43,200 billed yearly, with $4,500 in setup fees.
- 25k-50k users: One year for $331,200/year. Three years for $23,000 billed monthly or $276,000 billed yearly, with $17,500 in setup fees.
SkyPrep
The solution offers three plans with different feature sets:
- Lite: Includes 100+ active users, custom branding, SCORM packages and email support.
- Professional: Includes advanced reporting, API and SSO, gamification and workflow automation.
- Enterprise: Includes multiple platforms, migration services, multi-year discounts and custom SMTP.
Get a free, custom price quote.
TalentLMS
The solution offers five pricing models billed yearly:
- Starter plan: $69/month, up to 40 users.
- Basic: $149/month, up to 100 users and one branch.
- Plus: $279/month, up to 500 users and three branches.
- Premium: $459/month, up to 1000 users and 15 branches.
- Enterprise: Quote-based pricing for flexible user limits and unlimited branches.
Branches are independent training portals designed to serve different teams, departments or training audiences.
iSpring Learn
The solution offers different pricing options for businesses, freelancers and educational institutions.
Business
- iSpring Suite: $770 per author, billed annually.
- iSpring Suite Max: $970 per author, billed annually.
- iSpring Suite Premium: $1970 per author, billed annually.
Freelancers
- iSpring Suite: $770 per author, billed annually.
- iSpring Suite Max: $970 per author, billed annually.
Academics
- iSpring Suite: $770 per author, billed annually.
- iSpring Suite Max: $970 per author, billed annually.
Coursera
The solution provides two pricing options for businesses:
- Team for 5-125 users at $399
- Enterprise for 125+ users. Get a free, custom price quote.
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Next Steps
Whether you’re running a small business or a big enterprise, finding an LMS pricing model that strikes the right balance between affordability and functionality is paramount. We hope this article helped you understand the most common pricing options offered by top vendors, and the steps you can take to find a suitable yet cost-effective solution.
Need more information? Check out our free LMS pricing guide to compare the cost structures and features of leading market solutions.
Which pricing model is most compatible with your company’s training goals, and why? Let us know in the comments!