If you were thinking of building a house, you would not go to a home builder and ask, “how much do your houses cost?”
The builder could not possibly provide a useful answer to that question. Even if she knew the square footage, the price would vary widely based on things like location, layout, and materials, to the extent that any rough estimate would be virtually meaningless. Unless a builder is making a standard house for you that she has made over and over, there is just no way she can give you an estimate close enough for you to create a budget.
The same dynamic is at work with custom elearning agencies. The reason few of us post standard pricing isn’t because we’re trying to hide anything. It’s not because we’re afraid competitors will learn about our prices. It’s because, as with the home builder, we literally do not know the price until we’ve gotten more information about what is to be built. One might be inclined to wonder “even if this is true, surely they could provide a range?” We most certainly could. But how helpful would it be to see a range of between $8,000 and $65,000 per course? Those are numbers I just pulled from a Google search.
The fact is, any two 30-minute elearning modules can vary so much that they can hardly be thought to be the same work product. A voiced-over PowerPoint presentation is an entirely different animal than an interactive, choice-your-own adventure experience that uses live-action video. Even two 30-minute voiced-over PowerPoint presentations can vary widely in their construction. If the finished PowerPoint is handed to the agency by the client with few changes needed, the elearning module will cost far less to make than if the PowerPoint had to be built from scratch by the agency.
The bottom line here is that we can’t publish standard pricing because we don’t actually know the price until we know more about what is wanted. This may sound disappointing, but to be perfectly honest, that’s actually better for you. It’s the way you should want it to be. Why?
The dangers of standard pricing tables
If it’s true that a 30-minute voice-over PowerPoint module can vary widely in price from a 30-minute interactive video module, what would you make of an agency that tells you that a 30-minute course costs, say $30,000 to produce (or any price for that matter) without them having learned anything more about what you are looking for? When you hear this from an agency, you can reasonably assume that at least one of the following things is happening:
1. The agency is making many assumptions about what you need.
When the agency hears “30-minute elearning module” they think “30-minute voiced over PowerPoint” or whatever it is they have been conditioned to reflexively think you mean by “30-minute learning module.” Maybe their assumptions are perfectly aligned with yours. Maybe not. Regardless, when you hire that agency, you are going to get a course that was conceived before the agency ever met you – or else the project will have to be rescoped.
2. You are getting a templatized solution – not one that is customized.
One of the ways that some elearning agencies keep their costs down is to use templates, which is just another way of saying they standardize things. This is analogous to the home builder who has ten standard homes that he builds. Yes, this can reduce your price. It also reduces your range of choice. Some elearning agencies may have templates for learning activities, visual designs, media treatments, etc. If you get a standard price and you want to actually pay that price, you may very well be getting a templatized product. In other words, you will get a course that was designed before you even met anyone at the agency.
3. There is a bait-and-switch thing happening.
Unfortunately, there are many agencies out there that will give pricing that they know is lower than what they will eventually charge – in many cases, far, far lower (I’ve seen proposals with quotes that ended up being less than half of what was eventually charged). They do this to win the work. Once under contract and the project gets going, they almost immediately scope the project back up. Standard prices (and low prices) can be and very often are used to secure projects under false pretenses. They can be set artificially low and premised on the idea that the price assumes you will get a very specific work product that is often templatized. As soon as the project begins, you learn you need something else and the agency rescopes – often substantially.
Don’t get me wrong. Scope changes are a natural part of many custom elearning projects, maybe even most of them. When you get a quote for building a home, there will usually be unexpected things that arise. It’s inherent in the nature of the work. But that is different than deliberately underpricing work in order to secure a contract, knowing full well that you cannot deliver the project for that price. This practice is legal, but in my humble opinion, it is highly unethical and not something that a trustworthy organization would do. But it is not uncommon. And standard pricing tables can enable this practice.
Why you don’t want standard pricing anyway
To sum it up, when you receive a standard price, it will always be for a completely standard work product that in all likelihood will have little relationship to what you actually need. In such cases, if you hire based on a standard price, you will immediately be forced to make a decision: buy the thing you really don’t want or need, or work with the agency to find the real price. In other words, you’re not likely to actually pay a standard price.
Of course, we’re biased, but our view is as follows: the more standard the pricing, the more standard the solution. If you can satisfy the need with an off-the-shelf solution, you should absolutely do that. The reason you buy a custom solution is so that it can be suited to your needs. Standard pricing is a barrier to that happening and in fact makes it even harder to know what a project will actually cost you. Budget constraints may dictate an approach that is far more templated, and that is perfectly fine. But any buyer should go into such arrangements understanding what they are getting.
