man looking at lms

Options, options, options. It is easy to get distracted by them all - and what to choose. This guide will give you an overview of what the price is of an LMS, what are the pros and cons of each model, and let you know about both the hard costs and hidden costs that may occur. 

Pricing Models 

Open-Source LMS

An open-source LMS is free to access but can have hidden costs when you need to customize and set up everything from scratch. 

Pros:

  • 'Free' at first to set up and customize your own LMS with relevant plugins
  • You are not reliable on vendors to maintain and update the platform. This, however, can be a con as well   

Cons:

  • Without vendors to maintain and update the platform - it is your own responsibility, and this can be extremely time-consuming
  • A free open-source LMS is rarely really free but can have multiple hidden costs such as: 
  • Setting up a server on your own or getting an IT specialist to do so
  • Time spent on building and customizing the platform with the right plug-ins and features
  • Recurring costs as hosting, new hires of administrators, and learning developers to build learning content

Guide to employee experience

Pay-Per-Use

You get charged every time you or someone in your organization use a pay-per-use LMS model. Simple as that. This definition, however, can vary. An example of use could be when a user takes a specific course. Pay-per-use is often subscription-based, and you will need to pay a monthly or annual fee. 

Pros:

  • If you are not entirely sure if there will be a steady demand for learning in your organization, it can be a good idea to try a pay-per-use LMS model 

Cons:

  • On the other hand, it can be 'dangerous' if the demand is increasing, and you cannot count on how big the bill will turn out 

Pay-Per-User

Pay-per-user is when you pay for each user who spends time on the platform. The pricing models, however, vary from when we speak registered users versus active users in a specific LMS. Most pay-per-user-models also have a monthly or annual subscription fee as part of the pricing model. Learningbank's Learning Lifecycle Platform is an example, where pricing starts at €399 monthly including 100 active users. 

Pros:

  • You only pay for the users you need in the LMS. Especially, if you choose an 'active-user-pricing-model', because you will only pay for the users, who actually spend time learning, and not on 'dead' accounts as with the 'registered-users-model'
  • Tailored solutions for your organization often come with a pay-per-user-subscription model
  • Get the features you need when you need them
  • Furthermore, this is a great solution if you do not want the price to vary too much dependent on how many users that come and go on the platform
  • Highly professional support often comes with this solution. Support, that knows your brand, your needs, and they can help you on your new journey to adopt users and transform your learning materials to relevant and engaging content
  • Get new updates and features developed by learning specialists and stay in touch with the development in the market in a new digital world 

Cons:

  • We already mentioned this in short, but if you pick the registered-users-model you can end up paying for a platform with a lot of 'dead' accounts
  • Furthermore, it is important to mention that some platforms, (the active-users-models as well), can have built-in high-quality content, that your organization can choose to pay for as well. This is a hidden cost, but a cost that can be a pro as well, because when the learning content is already there, then you or a learning designer will not have to spend time design it yourself   

One-off Model

The title might say it. This model is something you pay for one time only - or maybe one time a year. These models often have a lot of fixed features, which both can be a pro and a con. 

Pros:

  • Comes with the features you already know you need
  • Add as many users as you like
  • Pay one time or once a year. This solution might not smash your budget

Cons:

  • No flexibility, if you do not want certain features and plugins that are already pre-installed in the LMS
  • If you find out that you need specific features, this solution can feel like a showstopper. With no place for development, it is hard to stay up to date  
  • Often, you will have to pay server and hosting costs yourself for this model, like with the open-source model, which is a hidden cost, that can be quite pricy

What to Choose? 

Here, another question to ask is: What are your and your organization's needs?

Take into account the hidden costs mentioned at the different pricing models, and compare them to the hard costs. Time spent on researching trends, setting up and customizing your LMS is, for example, a hidden cost that is very important to think about. Not to mention the time spent on creating learning content from scratch and adopting users with no support from, for example, learning specialists. 

3 more Questions to Ask:

  • What features do we get in this plan - and do we pay for new features coming on to the platform?
  • Does the pricing model come with support? 
  • What is the cancellation policy for this model?