Pricing is often the deciding factor when selecting a learning management system (LMS). Budgets only stretch so far, after all. Most LMS proposals look alike until you line them up. One vendor charges per learner, another per active user, and a third bundles implementation into year one and bills support separately. The headline price rarely tells you what you’ll pay over the life of the contract.

But just as budgets vary, so too do LMS pricing models—and any sneaky additional costs suppliers may surprise you with. 

Use our free LMS pricing comparison guide to line up proposals like for like, and read on for each pricing model, the costs in the fine print, and how to choose the model that fits how your people will use the system.

TL;DR

• LMS pricing follows seven main models: per learner, per active user and pay-as-you-go for cloud systems, and subscription, single payment, or freemium for self-hosted ones.
• The license is rarely the full cost. Implementation, integrations, content, support, and maintenance often sit outside it.
• Per-active-user pricing suits user numbers that change through the year, but bundles are usually prepaid, so unused seats still cost you.
• Compare proposals over your contract term, including tax, with every vendor using the same cost breakdown.
• You may not need to replace your LMS. Some skills and development platforms run alongside it, so price adding one as well as replacing it.

Are you buying or investing in LMS software?

When it comes to buying a learning management system, we prefer to think of the purchase as an investment. There are a couple of reasons behind this thinking.

Firstly, it’s important to remember an LMS is a long-term commitment. Most suppliers will offer year or multi-year contracts as a way to build a relationship with you and learn about your organization’s needs.

Secondly, business sizes and needs vary across industries, and so do the corresponding eLearning platforms and how they are managed and regulated. There is no one-size-fits-all solution, but there is a solution that’s right for your industry, training and outcomes.

Thirdly, there’ll be a return on investment for managing your training programs on an LMS. If there isn’t, you should be looking to calculate one. And considering that L&D professionals have more spending power than ever, it pays to understand how you can optimize your budget.

Much like getting to the checkout at a store in the United States and finding your reasonably priced item now has GST tacked on, additional costs can come as an unwelcome surprise when purchasing an LMS.

If you have a budget set and approved by C-Suite—and KPIs for the L&D function to boot—it’ll be hard to go back to them with your tail between your legs and ask for money or explain you didn’t do your research properly.

Not only are succession planning and capability development stalled in this scenario, but funds may have to be pulled from other worthwhile projects or departments to change LMS solutions. And if assurances were made that a particular LMS would solve for skills and capability gaps, faith is lowered in the L&D team’s ability to act on business outcomes. Conducting an LMS pricing comparison at the start of a procurement process is a little investment to save a lot of pain down the line.

Understanding LMS pricing models

To avoid paying more than you expect, you’ll want to conduct due diligence before committing to a price point for an LMS platform.

Because here’s the thing about LMS pricing. You don’t just get to say, “We want to pay per month” because that’s the billing frequency that suits you. The LMS cost is usually dependent on two things:

1. How the LMS is hosted or deployed
2. Additional functionality you need in the system.

The first factor comes down to who’s maintaining the system: You or an LMS vendor. The former scenario usually has a smaller upfront cost with larger ongoing expenses on an inconsistent basis. The latter may require setup fees, but it’ll usually mean you pay a subscription for someone else to do the heavy lifting.

The second covers third-party content, integrations, plugins, and non-standard features. These will be costs on top of any LMS pricing model but will contribute to the total price you pay for the LMS.

We’d also suggest you think about the use case for your learning management system. Many LMS pricing packages are geared towards internal applications (i.e., corporate training), which doesn’t directly translate to the more transient nature of customer, client, and partner training. Press vendors about the options for external use cases to see if they account for fluctuating usage.

Hot tip: A comprehensive LMS pricing comparison guide will be your best friend in this process. 

Cloud-based pricing models

Otherwise known as metered models, these pricing models are generally subscriptions, based on the scope of your organization.

There are various LMS pricing models you may see cloud-based vendors offering:

• Pay-per-learner
• Pay-per-active learner
• Pay-as-you-go
• Modular.

Pay-per-learner

The most popular pricing model thanks in part to its simplicity, paying per learner means you pay a fixed figure for a certain number of users.

As you increase the number of users in the system, the cost is lowered for each individual. It’s a good option if you need to budget for monthly or yearly expenses, since it allows you to onboard hundreds of users upfront.

The pay-per-learner model is right for you if…

Your number of users stays relatively constant over a long period of time and a learning management system is a highly-used tool in your organization. 

But be wary of…

Potentially being overcharged. Remember what we said about ROI? If users aren’t accessing the LMS, then you’re essentially paying for people not to use it. You can’t see return on an investment that’s throwing money at the wind.

Pay-per-active-user

While the last model charges irrespective of usage, paying by active users allows you to add an unlimited number of users to the LMS. You’re only charged for the ones who log into the system during the billing period—i.e., the active users.

The pay-per-active-user model is right for you if…

Your user base fluctuates seasonally, such as in large enterprises with graduate programs or businesses with sales teams who need routine access to new product information. 

But be wary of..

One specific catch. The price is still prepaid and bundled, so even if you purchase a plan for a forecasted 300 users and just 200 log into the system, you still have to pay for the 300.

Pay-as-you-go

Pay-as-you-go is best exemplified by the ski season: The cost is minimal during off-peak times but substantial when a rush of users access the system.

The pay-as-you-go model is right for you if…

You create and sell your own content, as it guarantees costs only go up when your revenue does.

But be wary of…

The lack of predictability. Though it gives you room to breathe during times of lowered usage or revenue, the pay-as-you-go model isn’t all that complementary to the nature of eLearning, which moves fast and demands a long-term investment.

This means the resources required to launch and maintain it often aren’t balanced by the usage, and ad hoc billing makes it tricky to budget for.

Modular

With modular pricing, you buy a core LMS and add modules for the features you need, such as advanced reporting, mobile learning, e-commerce, or a content library. Each module carries its own price, per user or as a flat fee, so you’re choosing both which modules and how many people use them.

The modular model is right for you if…

You need a core LMS now and expect to add features later, and you’d rather not pay for features you won’t use.

But be wary of…

Costs that grow as you add modules. Check what the core includes and what each module adds, and price the full set you expect to need by year three.

Self-hosted pricing models

These models are usually all-inclusive, at least in the sense that you purchase the software outright and own all the data.

But, it also means that past that initial cost, you’ll bear the burden of maintenance yourself.

There are three learning management system pricing models in this category:

1. Subscription fee
2. Single payment
3. Freemium.

Subscription/licensing fee

Purchasing a periodic license for an LMS, paying for a monthly or annual fee, and adding the number of users and courses you desire is known as a subscription model.

Most suppliers will offer two or three flat-fee plans to choose from. Like a phone plan, with each increase in price you unlock new functionalities. This model is often available for cloud-based systems as well. 

The subscription model is right for you if…

You’re budgeting for an upfront payment but don’t know the exact number of users.

We’d say to avoid this model if you’re new to eLearning, as you may end up paying for features you don’t need or blowing your budget if you find you need to upgrade. 

Single payment

Also called perpetual licensing, with this model you pay a one-time fee to download the LMS software.

Self-hosted LMSs under this category save time on implementation and training, but as with the following ‘freemium’ option, you are then burdened with the responsibility and costs of ongoing maintenance, software updates and managing features. 

The single payment model is right for you if…

You have a large user base and plan on using the same LMS, features and all, for a long period of time.

Freemium

Anything free still comes with a cost down the line, and that’s especially true of learning management systems.

Freemium and open-source LMSs both start free, but they work differently. A freemium LMS gives you a free basic version and charges to unlock more users, features, or support. An open-source LMS gives you the code itself, free to modify, which you then host, configure, and maintain.

With open source, the real cost is the time you’ll spend on hosting, integrations, customization, and maintenance, even if you have strong programming skills. With freemium, it’s the upgrades you’ll need as you grow.

The term ‘freemium’ means that the LMS code is open source and can be freely modified. Freemium models are enticing as they can be freely distributed and modified at your will—but we’ve found many organizations don’t realize they’re paying for code, not an out-of-the-box LMS.

The real cost, then, is the time you’ll spend on integrations, customization and maintenance, given open source learning management systems require extensive configuration, even if you have sound programming knowledge.

The freemium model is right for you if…

Open source suits organizations that want full control and have developers to support it. Freemium suits small teams that can work within the free tier’s limits.

Additional costs to consider 

It’s not just the freemium model that has additional or hidden costs. There are many factors that can impact the total of an LMS pricing plan.

• We know a change in active users or registered users will likely bump up recurring costs, but it can also impact third party licenses, too.
• Enabling new proprietary features from a cloud-based LMS provider can cost you.
• Switching LMS vendors or systems and migrating data will cost you.
• Depending on the provider, certain standard features (like user management) may require you to go up a tier in pricing plan, too.
• Self-hosted systems need ongoing maintenance for bug fixes, updates, and upgrades, and changes beyond configuration usually need a developer.

And that’s not all.

Training & support

Some of the things you may find are missing from LMS pricing plans include:

• Any combination of email, phone, live chat or ticket support
• A knowledge base for DIY fixes (think videos, tipsheets and how-to guides)
• In-person system training, both as part of implementation and ongoing
• A dedicated Account or Customer Service Manager (who would champion your requests)
• Community forum, particularly for self-hosted learning management systems
• Technical support for bugs.

These might be considered perks, without which you’re left to trawl through pages of developer talk to self-diagnose and resolve issues.

Content creation

For many organizations, content authoring matters. It isn’t a standard LMS feature, though, and some vendors blur the line in how they describe it.

There’s a difference between content authoring and course authoring. Many systems will offer the latter as a feature, wherein you can import training materials or pull them from the LMS catalog to create training courses or programs that are hosted in the learning management system. You may be able to download this course, but it’ll only be compatible with your LMS unless you break it down by individual resources.

Content authoring usually needs its own software, a content authoring tool. It lets you create courses in line with eLearning standards such as SCORM and xAPI, each of which has several versions. Content built to those standards can include multimedia, be reused in other systems as a zipped file, and collect data from online and offline learning.

Some LMSs include a content authoring tool or integrate with one. Check that a vendor offers content creation as well as course management, and whether it costs extra.

Implementation

The cost of implementation varies wildly by supplier and whether your choice of LMS is cloud-based or self-hosted. Implementation costs may include (but notably aren’t limited to):

• External consultants or specialists
• Hardware installation
• Customization of software
• Data migration
• Data storage
• Integrations with other software like HRIS.

How to choose the best LMS pricing model

Nobody wants to be caught out paying more than they have to, least of all for an expensive, long-term investment like an LMS.

Our LMS pricing comparison guide can help you work out the finer details. In the meantime, here are four factors you’ll want to consider when reaching out to vendors.

1. Non-negotiables
2. Total users
3. Engagement expectations
4. Integrations.

Define non-negotiable features and integrations

Research what features you need, what’s nice-to-have, and what’s probably unnecessary. This will save you time on negotiations, demos and sales pitches from suppliers who don’t have what you need.

It’ll also help you better understand the real value of each pricing model—a cloud-based learning management system may seem expensive upfront but the vendor’s development roadmap might support things like capability development and talent management in the long run. 

Determine your intended number of users 

Most of the LMS pricing models we mentioned above are based on the number of users in the system. As such, it’s crucial to tally the total number of users during your ideal billing cycle (e.g. a year) and determine if this number will be stable, fluctuate or likely to grow. 

If an LMS can’t scale for your projected number of active users, then it’s likely not going to be a good investment.

Calculate the time users will spend in the system 

Ask yourself (and your stakeholders):

• Will user access be seasonal, like for compliance training or product training?
• How will ongoing employee training and professional development impact engagement?
• Will users only access certain parts of the system, say for onboarding?

If it’s the latter scenario, it means the core number of users will be relatively constant, but the users themselves will be different. If you don’t understand what end users will be using the LMS for, you may choose a solution that’s ill-fit for your needs. And a solution that’s ill-fit for your needs is just a waste of money, period.

Know what integrations you need

LMS integrations connect the eLearning world. They are what enable security (through Single Sign On), data transfers between your LMS and HRIS software (that’s API), video conferencing (via Zoom or Microsoft Teams) and third-party content (like Go1, Skillsoft, and LinkedIn Learning).

In short: Integrations will make the learning experience better and enable your LMS to talk to other software you already use, but they are considered optional and come with a cost since many are Software-as-a-Service businesses.

Ask how each vendor connects to the platforms you already use, because custom integrations add cost. Acorn’s Universal Adapter connects your external platforms without custom builds, shows their content alongside your own, and syncs completions back so reporting sits in one place.

Key takeaways

Learning management systems are incredibly useful but complex products. You’re rarely paying for what you see on a vendor’s website.

Everything from your future needs to the needs of other organizations using the same system impact LMS pricing. That’s on top of the myriad of LMS pricing models out there, which depend on the type of LMS you’re buying. In short: The same pricing model can look very different between systems.

Vendor-developed cloud LMSs will usually appear more expensive as they charge recurring fees per user or based on usage. However, technical support is often included or can be added onto your pricing plan—so you need only worry about the learning management part of the LMS.

Self-hosted systems require more elbow grease but have the illusion of more control. Most are licensed or sold as an off the shelf solution, so it’s yours to modify at will. If you don’t have technical and development capabilities in your workforce, however, you’re not going to be able to customize, configure or optimally use these LMSs.

Navigating the confusing world of LMS pricing comes down to due diligence. Do your research, use some tools (a request for proposal and pricing comparison guide can help build internal consensus, by the way) and remember you’re making an investment in your organization’s success.

LMS pricing FAQs

What are the main LMS pricing models?

Cloud-based LMSs are usually priced per learner, per active user, pay as you go or by module. Self-hosted LMSs are sold by subscription or license fee, as a single payment, or as freemium or open-source software. The table above compares all seven.

Are there extra costs to budget for with an LMS?

Plan for implementation and configuration, data migration, integrations with your HRIS and single sign-on, content and authoring tools, training, support beyond the basic tier, and maintenance if you host it yourself. Some vendors also charge a higher tier for standard features, or for exporting your data when you leave.

Is per-user or per-active-user pricing cheaper?

It depends on how many of your people log in. If most users are active every month, per-user pricing is often simpler. If usage rises and falls through the year, per-active-user pricing can cost less, though bundles are usually prepaid. Work out the cost per active user over your contract term to compare them fairly.

How do I compare LMS proposals fairly?

Send every vendor the same cost breakdown, ask them to mark what’s already included, and compare the total over your full contract term including tax. Our free LMS pricing comparison guide is built for exactly that.

Do I need to replace my LMS to add skills and development?

Not always. Some skills and development platforms (like Acorn) run alongside the LMS and HRIS you already have, so you can price adding one as well as replacing your LMS.

How is Acorn priced?

Acorn sells two ways. Acorn Base gives you the platform, implementation, and a shared Customer Success Manager, and suits teams that already know how they want to use it.

Acorn Altitude adds a dedicated Strategic Account Manager and Acorn’s help building your capability and skills framework, for organizations that want Acorn as a strategic partner. See acorn.works/pricing for details.