How much is a learning management system (LMS)? What are the costs and how can I compare prices?
Learning management software has evolved to meet dynamic training needs. While the benefits are clear, the pricing structure can be confusing.
Here, we’ll explain the basic costs and compare products to give you an idea about industry standards for pricing.
How is LMS Priced?
LMS solutions deliver educational material to a vast range of learners. The software and the courses come with a variety of pricing options based on clients’ needs.
Here are the four standard pricing methods:
1. Pay per Learner
The most common option is for clients to pay for the solution on a user per month basis. This figure is either calculated based on the total number of users in the system for each month, or the number of active and enrolled users taking courses each month. There may also be an initial service fee for creating an account. In addition, vendors might ask for payment to be made annually, even if prices are broken down monthly.
Intended Client: Small to mid-sized businesses with general training requirements are the best fit. These solutions typically include tools for authoring lessons and are hosted in the cloud so users can access the solution from anywhere at any time, even through a mobile device.
- Lesson.ly: The solution’s lowest pricing tier is $200/month for up to 25 users, and the highest tier is $1,000 for up to 300 users. A custom monthly fee is offered for those exceeding 300 users.
- SmarterU: The solution requires an initial fee and is priced by tiers. The lowest has an initial fee of $499 and is $200/month for 100 users, and the highest is a custom initial fee and is $650/month for 1,000 users.
2. Pay per Use
When an LMS solution includes many features, lessons, modules and tools, not all of them may be necessary. A pay-per-use pricing model allows clients to opt out of certain parts of the software, only being charged for what they use. This could mean being charged based on the modules in use, the number of active accounts in use, or only the content that’s being used by those accounts. It depends on the arrangement made between the vendor and client.
Intended Client: This option best serves any-sized client with a homogeneous workforce because access for all learners will be restricted to the same “a la cart” choices. All users should be relatively happy with the same finite access.
Sample Price: Because pay per use is a negotiable option, prices vary for different vendors.
3. Pay per Course
For LMS vendors that offer pay per course, courses are often selected based on specific certifications. The vendor may offer a consultation service for identifying the right courses, then will charge to meet those needs through partnerships that can deliver lessons into the LMS platform. The vendor might also have all the content available in an internal library, instead of offering authoring tools or third-party partnerships, and will charge based on access to the content. This has elements of a pay per learner price plan, but with premium prices for specialized content.
Intended Client: The best fit is compliance-focused industries with learners that must be certified for their roles, such as HR, medical or safety. The size of the intended client can vary.
- Cogentys: Costs are estimated to start at $700 per month for a minimum of 500 users. However this is an average to compare with other solutions and doesn’t consider the model of price per course. The actual costs can be diverse due to two factors:
- The course’s level – A higher level course will be more expensive than an introductory course.
- The industry of the course – A certification for a medical role may cost more than a certification in an HR role, for example.
- Litmos: The vendor specializes in healthcare training content as a separate pay-per-learner tier-based plan aside from its general LMS solution. The lowest tier is $99/month for up to 50 users, and the other tier is for custom payments for those exceeding 50. This is still a pay-per-learner plan but at premium costs for more advanced content.
4. Pay for Licensing
When a vendor offers a licensing fee, it’s typically an annual cost that allows clients to host the solution themselves. The client must have a server to host the solution and an IT staff to maintain the server on-site. There are often additional implementation fees for installation, data migration and training, and there may also be at a per-learner charge as well.
Intended Client: The intended client is a business with an existing IT staff to manage its data internally. These companies are typically mid-to-large-sized and have data governance requirements so they would prefer an on-premise hosted solution to control their data.
- Accord: The solution has a $2,000 implementation charge with an annual licensing fee amounting to a low of $3,540 for 200 users, a high of $8,940 for 1,000 users and a custom pricing option for users exceeding 1,000.
With these pricing methods in mind, it’s important to note that some vendors may offer a mix. For example, a vendor may offer course consulting services with an implementation fee as well as offering a licensing package at an annual fee.
Learning management software can be used by schools, hospitals, corporations and more. The differences between clients in these markets are vast, so the pricing model for LMS solutions is equally flexible.
If price is a pain point, a flat pay-per-learner method is typically least expensive.
Keep in mind that as a business scales and adds more users, it may be more cost effective to host the solution on-premise with a licensing fee or look for an option with reduced features or content for a lower monthly cost.
If you have an idea about the right pricing structure, check out our LMS Comparison Guide to view pros and cons of all the top LMS solutions. We’ve assembled this spreadsheet that includes product details, the method for hosting data, core features, customer services, implementation requirements, shortcomings and more, saving valuable hours of your time.