Q: we are looking at offering a certification program that will consist of 9 individual courses. The timeline of the program will run from September through December and will consist of a total of 29 Hours.
We have offered this certification program in the past but the courses have been offered on an individual basis. So, if a course does not have enough enrollments to run then we cancel the course and those who are interested in getting their certification have a difficult time in obtaining their certification because of cancelled classes. I feel that offering a certification program and not being able to fulfill the certification for someone is not good customer relations.
In an attempt to offer an option to those who truly want the certification I have grouped the courses into one program and will be offering the certification as a package at a cost of $1,600, which is slightly less if they take the classes on an individual basis. It is hoped that by offering the course in this method, we will know if we have enough interest in the class based on enrollments to run the class and those who enroll in the class will be assured of the opportunity of obtaining their certification.
I have two questions:
1. When we set a minimum number of participants to run the class what do we do if someone cancels just one week prior to the class starting? What is your thoughts on a cancellation policy? If one drops out then we may not have enough to run the class.
2. What if someone starts the class, takes one or two classes and then wants to drop out for some reason? What is your thoughts on refund practices in this type of situation? If we offer a refund, then we could possibly be in a losing situation again.
A: First, price the certification program at $1,595, not $1,600. Discounts for certification/certificate programs as compared to individual courses usually run around 20% to be seen as worth it to potential customers, so think about $1,495 because that is also under a price break and generally a price under a price break picks up more registrations.
Second, it looks like you have invested a lot of time in creating the courses and the program. Now you need to invest enough promotion and just moral support for this program to make it successful over the long run. Certification/certificate programs are very popular. At the $1,500 level you should be able to make money on it. From the wording of your questions, it seems you are hesitant and looking at minimal enrollments and downside risk. While certainly programs fail, just thinking about a possible single cancellation a week before suggests you may not be promoting and supporting the program enough.
Third, if you do not have enough income to pay your teachers on the date of the first class, you cancel the program. Obviously you have an additional source of revenue from the individual class fees. Obviously if you cancel a whole certification that sends a bad message to potential customers. But you either cancel the whole program, or- - again if you are playing this for the long run- - you simply run the program at a loss, create some graduates, create some good messages to potential customers, and do better promotion the next year.
Fourth, if someone drops out and requests a refund you can create a refund policy that meets your needs. You can keep the money and allow the student to take other classes. You can offer partial refund. You can offer no refund. You can have a strict policy and then if you are making money be lenient and create an “exception” that will create good will with that particular student.
Lastly, take a look at how well you are promoting the program, and to whom. Promotion costs should be no less than 10% of your expected income. At the $1,600 price level, this program should be a winner.