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Localized price testing

Udemy sees a world where every student is able to find the right teacher. We’re excited to announce that starting on August 9, 2017, we will begin localized price testing that will enable more students around the world to enroll in your courses. To facilitate these tests, we’ve updated the terms and conditions of the Deals Program. Specifically, the terms will change to remove the $10USD deal floor in Brazil, Mexico, India, South Africa, and Turkey to reflect market conditions in those countries. If you don’t want to remove the $10USD floor in these markets, you would need to opt out of the Fixed-Price Promotions Program.

We will also adjust the current price-tier matrix in the following markets (Brazil, Mexico, India, South Africa, Turkey, and Norway) to reflect market conditions. List prices that are displayed on your course landing page in the local currencies of these markets will be adjusted based on the updated price-tier matrix which will be active on August 9, 2017.

Why should we test localized pricing?

Student signups in 2016:

55% of our paying students live outside of the U.S., yet our pricing has been based primarily on the purchasing power of American students. Someone in California would be comfortable spending $12 for a movie ticket, whereas someone in India would normally spend $3 for a ticket to the same movie.  As a global marketplace, we need to meet our students where they are at prices that are intuitive to them. We believe that doing this will help our instructors have greater reach and tap into a wider audience.

This approach isn’t new for digital media. Spotify for example charges ~$10/month in the US and the equivalent of ~$5/month in Brazil, Netflix at ~$10/month in the US and the equivalent of ~$7/month in Mexico, and Amazon Prime at $99/year in the US and the equivalent of ~$8/year in India. It’s important that we optimize prices in different markets, rather than go for a one-size-fits-all approach.

Marketplaces like ours are dynamic, and pricing models are always evolving. We need to run targeted tests, learn from them and iterate. These tests will help us gather more detailed insights, and we’ll use the results to inform how we approach localized pricing in the future.

How does the Price-Tier Matrix work?

When you set your list price in a given currency, you’re setting your list price at a particular tier. The list price that students see in other currencies is calculated using the price-tier matrix based on the tier that it maps to. As part of this test, the price-tier matrix will be adjusted to reflect market conditions in Brazil, Mexico, India, South Africa, Turkey, and Norway.

What are the next steps for you?

Here are our recommendations to make the most out of localized price testing:

  • List prices in local currencies in these markets will be automatically adjusted, and no action is required on your part. If you’d like to, you can adjust your course list prices in the Price & Coupons section of your Course Management Dashboard.
  • Use percentage off rather than fixed price numbers in your promotional announcements (e.g., “75% off my course” instead of “Get my course for $10”). This will make your promotions more easily understood by students around the world.
  • If you’re running promotions in local currencies in these markets, we’d recommend using coupon codes that are valid only until August 8, so that you can revisit your promotional strategy once the localized price test begins. If you need to modify a coupon code you’ve already created because it may no longer be competitive or valid, we’re happy to help. Reach out to us by filling out this Coupon Request Form.
  • 70-90% of enrollments in these markets happen through fixed-price deals, so we would encourage you to keep your courses opted into these tests since fixed-price promotions are a powerful lever to maximize your revenue potential on Udemy. We’ll also be running targeted marketing campaigns in these markets from August 9.

We’re excited about localized pricing and its potential to expand your global reach. Email us at instructorsupport@udemy.com with any questions. We’re always here to help.