Over the past 14 years, we've heard numerous times from our clients that one or more of the following list of costs caught them off guard when they began seaching for the right LMS. This is our compilation of the list, so it might be a little skewed because (obviously) our clients selected us because the price was "right" for them. For a third-party breakdown of LMS costs, visit Capterra.com. Their report (here) resulted in a Top 20 Most Affordable LMS list, on which we took the #2 spot. Validating our clients' choice and making us very, very happy.
Breakdown of the Costs to Consider
- Not all LMS vendors charge the same way. Actually, probably none of them charge the exact same way, which makes finding the right fit for your online training program hard.
Some charge by "seat", which is an older term and usually reserved for schools. It ends up being very pricey as each time a learner takes up a "seat" you'll get charged. Some charge for number of administrators, number of courses, feature sets, active users, named users, per "head", and a host of other options.
Edvance360 has chosen to charge in blocks of "active users" which are users who are actively taking courses, admins who are always active in the site, and instructors who are actively teaching or creating courses. If someone moves into an inactive status (e.g. completes a course or program of study, expires out of a course, etc.), they are not counted in the active users total. While they are inactive, someone else takes that spot. If they re-enroll, they are re-activated. (This is all handled automatically, obviously, as playing musical chairs with accounts sounds like a nightmare.) This allows large memberships with hundreds of thousands of learners in a year, license from us a small number of active users (500-1000). It's also appealing to smaller organizations because they don't feel penalized for growing. For a list of what is included in an Edvance360 license, click here.
- Do you need an Enterprise License? Many LMS vendors offer an enterprise license which gives a corporation what is considered "fair use unlimited" - basically an unlimited number of users across the enterprise (usually employees but sometimes clients as well), within reason.
- Some vendors allow payment plans. If you are a start-up, this is initially appealing, but might lose it's appeal when you see how much more you are being charged just to take advantage of the payment plan options.
Edvance360 has chosen NOT to charge additional costs for payment plans to start-up companies and non-profits. They can also pay with a credit card if desired.
- Speaking of non-profits, most LMS vendors provide a discount to non-profits or those serving the "greater good". This is usually our way of giving back, so be sure to share this up front with your salesperson.
- Watch for hidden fees. These are also known as "a-la-carte" fees. Here's a list of a few to look for:
- Upgrades/new versions
- Setup fees
- Implementation fees
- Data migration fees
- Integration/API fees
- Training fees
- Support fees
- 24/7/365 Support fees
- SSO fee
- eCommerce hosting fee
- eCommerce or catalog of courses
- Self-registration tool
- Learning Object Repository (often an additional cost)
- Competencies (often an additional cost)
- Reports panel
- Collaborative tools
- Video conferencing tool
- Additional storage (often an additional cost)
- Streaming video CDN (often an additional cost)
- LMS vendors have a dirty little secret: They charge more for Higher Ed institutions than corporations or K-12. This is because Higher Ed institutions seem to want to pay more for less users, ostensibly because it might make them feel better about the LMS vendor they chose. In reality, the differences between a higher ed LMS and corporate MAY be negligible and they are likely over-paying. By a few zeros.
Note: Some LMS vendors do NOT have the same features that a school would need (e.g. Gradebook, grades, robust testing, inline grading, Dropboxes, integrations with TurnItIn, etc.), but most of your larger, older LMS do.
- Consider your content. Most LMS vendors can handle your standard file types (MP4, PowerPoint, etc.) but some charge extra for streaming video and storage. Streaming video is much faster and uses a different type of server, so many vendors charge for this or charge for overages. Some vendors also charge for storage overage, though the fees are pennies compared to what it used to be.
If you don't have time to create your courses, you can contract with consultants who can do so for you, for a charge. Ask the LMS vendor if they provide these services or have staff who have the expertise to do so on a contract basis. You can also purchase courses (there are hundreds of existing course content publishers), especially if you need common topics like OSHA, Sexual Harassment, etc.
If you are planning to incorporate interaction to make your learning more effective, you're probably considering SCORM files. There are two main SCORM-file authoring tools, Articulate Storyline and Adobe Captivate. You'll want to add in the cost of one of these products if you are heading this direction - and one of them is not cheap. You can also pay a consultant to create SCORM files for you, if desired. This often ensures business owners or experts pressed for time can launch quicker - thus making money faster.
- Know what type of customizations come at no charge and which ones will cost you more. Everyone needs customizations. Period. Don't let someone tell you differently. There are many levels of customizations:
- Logo and color scheme - Most LMS vendors include this for free, and for many, this is what is meant by customization. If you need more (and most do), keep reading.
- Turning on/off tools that are not needed - Can you do this yourself or does it require the LMS vendor's tech support team?
- Widgets - When learners log in, what do they see or access? Can you turn widgets on/off your Home Page and for your users or does this requires the LMS vendor's tech team?
- Click-paths - When learners log in and click on courses, where does it go? Do they have several clicks to get where they need to go? How much does it cost to alter this?
- Look & Feel - This is going beyond the logo and color scheme to a really custom Home Page or sub-pages. Are there options? Have you seen what the LMS vendor has done for other clients? Does it cost money to get something customized to your needs?
- CSS - Can you edit this yourself in the LMS? Do you have experts who can do it for you? Is it even possible?
- Know possible discounts are available. Often, LMS vendors are partners with accreditation groups and other organizations which have negotiated discounts. And while cost isn't everything, it's important to explore.
- Last but not least, will you need multi-tenant (or what we call our Mothership) licensing? This allows businesses selling to businesses to create sub-sites off of their own LMS (either will a full-featured LMS or some semblance of one), push down and control courses, and often to run reports across all their "client" sites. It gives the Mothership owner control of the sub-sites but also provides some level of autonomy to the sub-site administrators. It can be an important "value-add" for those selling their expertise or coaching, especially.