LMS Pricing Guide: Find the Pricing Model That’s Right for You

According to the Gartner Digital Market report, 60% of companies regret their recent product purchases. The #1 reason is the ​​software being more expensive than expected. Whether you’re just getting started with eLearning in your company or planning to change your LMS vendor, estimating the final cost of implementing the LMS may seem like a full-scale investigation.

In this blog post, we’ll look at different LMS pricing models and LMS cost structures, and give you step-by-step instructions on how to make the best choice for your training goals. But first, let’s review what an LMS is.

What is an LMS?

A learning management system is software that helps you manage the training process in a company or school. It’s like your personal virtual university that lets your learners access training materials and take online courses and quizzes, allowing you to see their results.

Here are some LMS features that make it your indispensable assistant:

• User management. An LMS lets you add and edit users, organize them into groups, and assign them roles.
• Content management. You can upload, manage, and deliver learning materials on a single platform.
• Progress evaluation. An LMS helps you assess how a particular learner or a group of learners performs. It gathers stats on responses, attempts, time spent, and more, and provides you with detailed reports.
• Training automation. In an LMS, invitations, enrollments, notifications, deadlines, etc. can be fully automated, allowing you to get these tasks off your table.
• Blended learning. You can plan live training sessions on a built-in calendar and notify participants about upcoming events. Some LMSs support hosting web meetings from their interface.

Breakdown of LMS Costs

How much does an LMS cost? This seemingly simple question has a complex answer, as the cost of LMS software is typically not something that’s fixed. It can include recurring and additional costs. 

For more precise budget allocation, you need to know the specific cost components of the overall cost of a learning management system for your use case. This will also help you choose the right LMS with a relevant pricing model and identify potential areas for cost optimization.

Below, we’ll look at the most common components.

One-time expenses

This type of LMS expense typically comes in two forms:

• Setup fees. These are the costs associated with setting up and implementing an LMS, such as data migration fees, installation fees for cloud hosting or dedicated servers, and administrator training.
• Customization. This typically includes integrations and interface adjustments. For example, if you want to connect your LMS to an IP telephony service, you may need to purchase software that connects the two services seamlessly. 

Recurring payments

Once your company starts actively using an LMS, you’ll encounter the following fees:

• Subscription or licensing fees. These are the ongoing learning management system costs, typically charged annually. As we will discuss further on, the LMS fee might be based on the number of learners, active users, or specific feature sets. 
• Maintenance. This includes updates and patches. Subscriptions typically cover this expense. However, this often does not apply to open-source software or a pay-as-you-go LMS pricing model.

Additional costs

While using an LMS, you might come across these additional costs:

• Training. You might need to train your team and learners to use the LMS effectively. When choosing an LMS, we recommend paying attention to the system’s ease of use and the training materials a vendor provides.
• Support services. Some LMS providers charge extra for support services, such as assistance via email or phone, or advanced support with a personal manager.
• Add-ons. Some LMS vendors have the option to buy extra features in addition to your subscription.

Factors influencing LMS Pricing

Once you know what LMS expenses might arise aside from subscription fees, it is important to consider your company’s specifics and requirements.

Here, we list the key factors that determine LMS software pricing. Considering these factors allows you to choose optimal LMS system pricing.

We’ve arranged the factors by how much they affect the final price (if they can significantly increase or decrease the price).

1. User count. The number of users accessing the LMS directly affects the resources required for hosting, support, and data storage.
2. Organization size. Larger organizations with extensive training needs and a larger user base often require more advanced features, scalability, and support services.
3. Customization level. The level of customization and flexibility you need influences what extra features or software you have to buy.
4. Features and functionality. The scope and depth of features significantly contribute to pricing. Even learning management systems with a pay-per-active-user pricing model often provide different sets of features for different user counts.
5. Hosting and infrastructure. Many modern LMSs include cloud hosting costs in the subscription price. So, the choice between cloud-based and on-premise solutions can influence the overall cost structure. The complexity depends on the preferences and infrastructure capabilities of the organization.
6. Implementation and training. The cost of LMS implementation and training is typically included in the LMS subscription. That’s why it may be less significant compared to factors directly related to user access and system features.
7. Support and maintenance. At least some level of support and maintenance usually comes with LMS pricing packages. Only with complex customizations or business specifics might you need advanced support. So, the level of support and maintenance can impact LMS prices, but might be considered less critical in the initial decision-making process. 

Tips for the Optimization of LMS Costs

When calculating all the costs of an LMS, you might worry about how to fit it into your budget. Here are some tips on how to optimize LMS fees.

Assess your training needs

Before choosing an LMS, determine your current and future training and development requirements to ensure you choose one with the features and options you actually need. For example, if you have just a few simple training programs, then your company might not benefit from extensive reporting features. In contrast, if you often go through compliance audits, you will need comprehensive training reports.

Compare LMS solutions

Use ratings, demos, and free trials to evaluate the quality, usability, compatibility, and support of various LMS solutions. Request quotes, proposals, and contracts from potential vendors for LMS pricing comparison, as well as terms and conditions. For instance, you might find that cheaper options meet your needs to the same extent as more premium LMSs.

Consider available resources 

What resources can you employ for your LMS usage? Is it possible to cover LMS administration, support, and maintenance in-house? Is this option more affordable than a full-featured LMS subscription?

Leverage discounts

For example, it’s a great idea for larger organizations to search for bulk user discounts or bundled services. Also, consider asking an LMS representative if they offer seasonal discounts, and if so, plan your purchase accordingly.

Review LMS usage and performance regularly

Are your team and employees using the LMS to its full potential? Does it deliver the expected results? Might it be time to downgrade or search for an LMS that better fits your current needs? For example, with iSpring Learn‘s ease of use, a company can save on LMS administration and content creation by covering it in-house.

Seek feedback

Gather feedback from your learners, instructors, managers, and partners to identify areas for improvement and cost optimization.

Understanding the Cost of LMS Systems: Popular LMS Pricing Models

There are several basic types of pricing plans. To make things easier, we’ve put together a comparison table of the most common pricing models and how much you would pay for them, based on the number of learners in your organization. Scroll through the article to get a detailed analysis of each pricing type.

1. Pay per learner

The pay-per-learner model is also often called a pay-per-seat model. Its principle is simple: you pay a fixed price for a certain number of learners added to the system. The benefit of this approach is that you can easily predict your monthly and yearly expenses for the learning management system.

Pay-per-learner prices are tiered: as the number of users goes up, the rate goes down. The number of learners is usually calculated per month or year.

Pay-per-learner pricing example

As an LMS is a service you will stick with for a while, most providers encourage you to pre-pay yearly at an additional discount. Let’s say you have 100 learners in your TalentLMS account. Paying for a year would reduce your cost from $2,268 a year to $1,788, saving you $480.

Here’s a typical example:

Takeaway

This model is widely used because of its simplicity. But in some cases, this simplicity can cost you a lot. By paying per learner, you pay for hundreds of people added to the learning management system upfront. However, that doesn’t give you any guarantee that those employees will actually log in to the system and study. So, a pay-per-learner approach makes sense when the number of learners remains relatively the same for long periods of time and eLearning is a requirement at your company.

2. Pay per active users

Pay-per-active-user pricing is the second most popular model; it addresses the problem of the previous pricing model. As opposed to per-learner plans, which are charged irrespective of usage, it allows you to add any number of users to the LMS; you’ll only be charged for the ones who logged in to the system during the pay period.

One thing you should know before committing to this model is that the price is usually bundled. For example, you expect to have 250 active users each month, so you choose the corresponding plan. Even if you don’t hit 250 but have, say, 200 users, you’ll still have to pay for 250.

Pay-per-active-user pricing example

Let’s suppose you’re going to train 120 employees in the iSpring Learn LMS. 37 are salespeople; they’ll be the most active learners, who need to maintain their knowledge of products and sales techniques and have instant access to presentations and promo materials uploaded to the LMS. The remaining 83 employees will be divided into groups, and their training will be spread evenly over a year. So, each month, you expect about 80-90 active users, including up to 5 new team members who will have to take an onboarding course.

The iSpring Learn pricing plan that fits that number costs $5,483 per year. This price also includes a 1-user subscription to an authoring toolkit, iSpring Suite, and technical support.

Takeaway

The per-active-user model is convenient when you need to train different groups of learners each month, if, for instance, you’re a large enterprise and need to train your customers or partners. Plus, you don’t need to worry about inactive accounts because you won’t be charged for them.

3. Pay as you go

In this case, the cost of the learning management system is directly linked to its usage. You pay little in off-peak times but may have to pay a fortune when there is a rush of users.

The pure pay-as-you-go pricing model isn’t very popular among LMSs, despite allowing you to be footloose and fancy-free. eLearning isn’t typical SaaS, as launching it requires too many resources (in personal effort, if not just money) to use it only occasionally.

Pay-as-you-go pricing example

Upskill LMS is among the few that stick to this model. It charges no license, no setup, and no hosting fees. Instead, they offer to pay for learners to take training courses with “credits.” For example, you will need 3 course credits to sell a course to one learner. For each SCORM course, they charge one additional credit. One credit amounts to $3, so you’ll pay up to $9 for each user who buys your content. You can also buy credits in advance and in volume to get a discount.

Takeaway

This model can benefit those who sell their e-courses, as it guarantees that LMS costs go up only during periods of increased revenue. This way, you can be sure that you’ll always be able to afford the change in price.

4. License Fee/Subscription

This is probably the easiest pricing format: you buy a periodic license for an LMS, pay a set (often annual) fee, and add as many users and courses as you want.

However, flat rate pricing (single price, single set of features) is relatively uncommon, and most vendors offer two or three flat-fee plan types to choose from. The price depends on the number of features included in the package. With each upgrade, new functionality is unlocked. Plus, when dealing with this pricing model, you need to keep in mind that the variation in the prices of different LMS providers at first sight can be really significant (if not terrifying).

Licensing fee example

Teachable’s business plan, with an unlimited number of users and maximum feature set, costs $5,998 per year. In comparison, Topyx’s Essentials plan costs $18,750 per year. For that price, they offer you 2,000 user accounts, 100 GB of storage, and tech support. Topyx’s Expanded plan for $33,550 per year grants access to all the features of the company’s product: an unlimited number of users, eCommerce, webinars, dedicated support team, and so on.  

Also read: Teachable Alternatives You Must Consider

Takeaway

As you can see, it’s absolutely necessary to do your homework and estimate the value of the additional features offered in packages. The prospect of not worrying about the number of users and other things might be tempting enough when buying an all-inclusive package, but if your company is new to eLearning or simply doesn’t need many extra features, this can be a waste of money. On the other hand, if you choose a plan with too few features, it may be really expensive to upgrade. Aside from paying the difference between the current plan and the desired one, some LMSs charge additional fees for migrating data or implementing new features.

5. Open source (Free) LMSs

Actually, “open source” isn’t a pricing model. The term means that the source code of the LMS is open and can be freely distributed and modified. We’ve added it to the list because open-source LMSs are often contrasted with those that have closed code. The main benefits are flexibility, meaning you can customize it any way you wish, and a cheaper price. Just keep in mind that it’s not an out-of-the-box solution.

If the software is open source, it doesn’t necessarily mean it’s free. Open-source vendors declare: “Pay for service, not for code.” That means that the real cost of an open-source LMS involves customization, integrations, and maintenance, and as such, these LMS platforms require extensive configuration to suit a given organization. Craig Weiss described the main costly challenges of open-source LMSs you’ll have to face, and the largest of them is that you need to have strong technical skills to work with such LMSs. Otherwise, you’ll have to hire someone who knows programming languages.

Open source LMS example

The best known open-source LMS software is Moodle, which is designed for educators and is distributed free of charge. Its corporate offshoot, Totara, is also open-source software but offers extensive functionality for business environments. They provide flexible pricing based on your needs.

Takeaway

As it’s rather hard to provide you with even an approximate price, since it differs greatly depending on a particular project, here’s a formula that will help you get the lay of the land:

How to Choose the Best LMS Pricing Model

The variety of LMS pricing plans may look like a confusing salad of the quantity of users, courses, and features. Before committing to a learning management system purchase, follow these steps to figure out the plan that meets your needs.

Step 1: Tally up the users you plan to train

Before opting for an LMS platform, figure out how many learners will use the system during a billing cycle, such as a month. Will this amount be stable throughout the year?

Step 2: Determine how long each user will use the LMS 

Will all your users be the same people, or will they vary? If you plan to use an LMS for onboarding courses only, the total number of active learners may be somewhat stable, but the users will be different.

Step 3: Estimate how many courses you’re going to upload

In many cases, the cost of a learning management system is based on the number of courses uploaded and the space needed for data storage. If you conduct training regularly throughout the day, then look for an LMS provider and a plan with a high or unlimited data storage allowance.

Step 4: Define essential features and integrations

Do some preliminary research to make a list of features you need. This will help you save time in negotiations with providers who don’t offer the necessary features. Also, this list will help you better estimate the real value provided with each pricing plan.

9 Popular LMSs: Price Highlights 

We explained above how various LMS pricing models function and mentioned several examples. Next, we’re going to present the prices of nine popular learning management systems on a single list. We hope it will make the search for a proper LMS solution easier for you.  

1. iSpring Learn

iSpring Learn offers three types of subscriptions based on the number of users. You can register any number of learners and pay only for those who actually log on to the system during a given month. 

Also, you can request a custom plan to match your needs more closely. 

Pricing

Here are the prices, if billed annually:

$4.57 per user/month (100 users)

$3.57 per user/month (300 users)

$3.23 per user/month (500 users)

If you want to learn more about iSpring Learn’s pricing plans, visit our pricing page.

Also read: The 11 Best HR Tools for Streamlining Your Workflow in 2024

2. Adobe Learning Manager

Adobe Learning Manager has two pricing models based on registered or active users. Several review websites mention that the cost is $4 per registered learner per month. You can request more detailed pricing on their website.

Pricing

There are two pricing models on the Adobe website: Registered users and Monthly active users.

3. Blackboard Learn

Blackboard Learn is a highly regarded solution for higher education, and its pricing depends on the number of licenses. It doesn’t have a free version but offers a free trial. 

Pricing

Prices are available only upon request.

4. EasyLMS

EasyLMS pricing is a tiered pay-as-you-go model and is dependent upon the number of features you purchase. 

The Academy extension contains learning paths, various access levels, a results overview, and other additional options. Every plan already includes it. 

Pricing

With EasyLMS, packages are called ‘owls,’ and the cost for a package starts at $105 per month or $1,150 per year.

• Business Owl: $105/month or $1,150/year
• Corporate Owl: $159/month or $1,690/year
• Enterprise Owl: $275/month or $2,750/year.

5. LearnDash

LearnDash is a plugin that enables turning a WordPress site into one’s own learning management system. Its pricing is tiered and depends on the number of sites in the plan. 

Pricing

The yearly cost starts at $199.00 for a single-site package. Each plan includes updates and support.

• 1-site license: $199/year
• 2-10-site licenses: $399/year
• Unlimited number of site licenses: $799/year

Also, you can purchase add-ons separately or as a bundle. The bundle with all add-ons for one site costs $299.

6. Moodle

Moodle is an open-source LMS, and you can download it for free. Moodle offers three ways to set up the LMS: you can partner with one of the Moodle certified partners, use the Moodle cloud, or download it directly. You can either self-host the system or buy Moodle cloud hosting. 

Pricing

Here are the available tiers for Moodle’s LMS cloud hosting. 

• Starter: $120/year (50 users, 250 MB of storage)
• Mini: $210/year (100 users, 500 MB of storage)
• Small: $390/year (200 users, 1 GB of storage)
• Medium: $910/year (500 users, 2.5 GB of storage)
• Large: $1,720/ year (1,000 users, 5GB of storage)

Also read: How to Create a Moodle Quiz: A Step-by-Step Guide

7. Totara

Totara is an open-source LMS, a ‘corporate version’ of Moodle with extended functionality, e.g., performance management and mobile apps. They offer flexible pricing based on your needs.

Pricing

Totara has custom pricing, so prices are available only upon request.

8. Litmos

Litmos has three pricing packages for different business sizes. Additionally, you can buy add-ons such as Salesforce connector, ready-to-go collections of learning materials, services, additional tenants, and Litmos Data Subscription.

Pricing

To get Litmos LMS pricing, you need to fill out the lead form.

9. Bridge

Bridge provides solutions for companies in three distinctive realms: learn, perform, and learn+perform. They constitute three separate plans with different features that are billed annually. They also offer four products that you can buy in addition to the chosen package: authoring, video, surveys, and AI skill development tools.

Pricing

Bridge LMS pricing options are available upon request.

4 More Questions to Estimate the LMS Cost

We’ve collected a list of the most commonly asked questions. Getting answers to them will provide you with a better understanding of learning management system pricing and help you find out the real LMS costs.

1. What features are included in each pricing plan?

As we already discussed, some learning management systems are available in bundled packages, each offering a range of different features; the higher the price, the more robust the system. If you’ve done your homework and defined the features that are crucial for your project, you’ll be able to estimate the relative value of each plan offered by a vendor.

2. Are there any extra expenses I’ll encounter after purchasing the LMS?

Before opting for a learning management system, you may want to ask the LMS sales team for a quote for all the services you need. Sometimes vendors charge additional fees for the LMS’s setup, training, technical support, hosting, upgrades, and add-ons.

3. How can I upgrade or downgrade my pricing plan? Are there any special conditions?

As for upgrading per-user plans, you have to purchase an upgrade when you exceed the number of users included in your current plan. Try to figure out what will happen to users who register after the limit has been reached. Will they be able to log in to the system, and if not, will it save their contact details? 

If you wish to downgrade, find out how often that’s possible and if there are any fees involved.

4. What are your cancellation and refund policies?

Don’t hesitate to ask if there are any exit costs, just to make sure that you won’t fall into the trap of a Learning Management System that may no longer meet your needs in the future.

To Sum Up

Finding the right balance between price and value can make or break your digital learning project. In this article, we have explained the most popular LMS pricing models, though you may find that offers from LMSs with the same pricing models can differ greatly due to hidden costs. So, whatever pricing plan you’d prefer in the future, you’ll want it to be totally transparent.