A Short Guide To LMS Pricing Models

February 24, 2023

Choosing an LMS has become similar to picking an engagement ring—you need to find the right one for you and your organization.

After the pandemic hit, LMS demand skyrocketed, and every company now sees the value in online training and development. An LMS must be tailored to your specific needs to function optimally. That way, you will make the most of your system in no time.

So, here’s a detailed guide on the LMS pricing models and their cost structure to help you make the best decision for yourself.

Pay Per Learner

It is a package deal where you pay for a fixed number of learners. It is a great way to have predictable billing for a fixed number of employees. However, it will only work if you have a set number of learners who are obligated to train.

Pay-per-learner is a stable model for most corporations. But, if your employee number is unpredictable, for example, if you have tons of freelancers working with you, this might not be the best fit for you. It may generate a higher bill than expected.

Also, if you don’t follow up on whether your employees are genuinely doing the course, it can result in a higher bill as you have to pay for every person registered in the system, whether they follow up on the course or not. So, you end up pulling a bit of dead weight.

Pay Per Active User

This is the best model for eCommerce companies or organizations with customer training initiatives. It is perfect for organizations with an uncertain or unpredictable number of users. In this model, you only pay for users who actually use the tool during your billing cycle.

Since you only pay for people who are active on the LMS and learning, you get the most out of your money. It also provides a history of inactive users, allowing you to pull up the records and figure out what’s wrong.

However, if you like to stick to a budget, this might not be for you as it tends to fluctuate a lot depending on the number of active users.

License Fee/Subscription

A license fee is a great model as the company can own the software as per the contract in return for a pre-decided cost.

LMS software Lattice has a similar model that offers a one-time license purchase option. You can check out more information on the Lattice pricing model here.

Large organizations wanting to operate the LMS themselves often use tools with subscriptions. It also arises out of the legal needs of big companies.

If the company is not self-sufficient enough, this may not be a good idea. Thus, such tools would not be a great fit for smaller companies or companies with fewer resources in the technical department. In this model, there will be no one outside the company to turn to.

Pay As You Go

This pricing model does precisely what the name suggests. You will pay for what you use.

This pricing model is best for small companies or startups that are unsure about the demand. This model is highly customizable to the user’s needs and is popular among small businesses. It’s a great asset if you want to start small and then go big.

Open Source

Who doesn’t like free things? Especially if it’s an entire LMS. It’s not like there aren’t any costs. However, the prices are partially for the setup, customizations, and add-ons.

Open-source is excellent if you have the technical backing and are looking for customizations suited for your company that you can build along the way. It needs a solid technical force behind it, and the cost of building and maintaining it can add to your expense. Also, the chances of the tool crashing are high, as it may not have the same polish or vigor as the commercial LMS.


Have you decided on your pick yet? Which one do you think is made for you? Let us know.


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