How Much Does an LMS Really Cost?

More than a quarter of corporate LMS users are either “dissatisfied” or “very dissatisfied” with their system.

That’s a lot of dissatisfied users.

According to Bersin by Deloitte, there are more than 700 learning management systems (LMSes) on the market. You’d think that every company would be able to find an LMS perfectly suited to its unique needs.

But obviously that’s not the case. Why?

One reason is that there are a lot of factors to consider when choosing an LMS. Almost 70% of subscribers have never used an LMS prior to their current one, meaning most organizations are still trying to get their bearings when they’re thinking about making a change or instituting a new system.

Let’s look at the costs and features of a few different learning management systems, then dive into the overall cost and savings your organization will see.

How Much Does a Learning Management System Cost?

Here are the costs of six different learning platforms, along with a few details on each (we’ll look at more specific benefits and drawbacks below):

LMS 

Monthly Cost

Value Rating

Details

Continu

$3-$7 ⭐⭐⭐⭐⭐ Flexible pricing on a sliding scale, custom support, full-suite of features and integrations

Litmos LMS

$2

⭐⭐⭐

Numerous integrations and features, less user-friendly than competition

WizIQ LMS

$16

⭐⭐

Various integrations, mobile-friendly, but users pay extra to white-label the platform

Inquisiq R4

$199

Costly, dated, less user-friendly design

Axis LMS 

$299

Expensive, fewer features than competitors

eLeap

$5

⭐⭐

Integration capabilities aren’t clear, less customization flexibility, some outdated design features

LMS providers organize their pricing in different ways. Some have a fixed rate, regardless of company size, while others have sliding scales based on the number of users. Others may vary their prices based on the key uses of the platform. So you’ll need to take that into account, too.

Remember that choosing the right LMS for your company requires understanding your needs. What, exactly, do you want your LMS to do? Which features do you want most, and which are optional?

LMS Feature Comparison

To get a better sense of what different platforms offer, let’s take a look at the standout features of a few different systems.

(All of the systems below also include single sign-on with SAML authentication and guaranteed interoperability with SCORM/AICC-compliant code.)

Continu:

  • Lets you create customized learning tracks or courses for each learner
  • Automates lesson delivery and assessment
  • Includes your company’s branding
  • Integrates with Slack
  • Syncs learning schedules with Google Calendar, iCal, or Outlook accounts
  • Integrates with most HR information systems
  • Includes an assigned customer success manager to help you get the most out of the LMS

Inquisiq R4:

  • Lets you create customized learning tracks or courses for each learner
  • Automates lesson delivery and assessment
  • Includes your company’s branding
  • Syncs learning schedules with Google Calendar, iCal, or Outlook accounts
  • Integrates with most HR information systems

LMS 365:

  • Lets you create customized learning tracks or courses for each learner
  • Automates lesson delivery and assessment
  • Integrates with most HR information systems

NetDimension:

  • Lets you create customized learning tracks or courses for each learner
  • Automates lesson delivery and assessment
  • Syncs learning schedules with Google Calendar, iCal, or Outlook accounts
  • Integrates with most HR information systems

RomyLMS:

  • Lets you create customized learning tracks or courses for each learner
  • Includes your company’s branding

The Savings Impact of an LMS

Here’s some great news:

Any LMS is going to end up saving you money in the long run (and often in the short-term, too). Especially if it’s well-suited to the needs of your company.

Here are just a few ways that an LMS can impact your overall savings:

Reduced employee salary

Any LMS will almost certainly pay for itself many times over.

Consider this: according to Salary.com, the median salary for a training manager is over $98,000. These positions “typically require 5 years experience in the related area as an individual contributor” and “1 to 3 years of supervisory experience,” meaning you can’t hire someone fresh out of college to handle your company’s training processes

An LMS might not entirely eliminate the need for a training supervisor, but it can narrow the position’s requisite skill-set. An effective system does the hard work for you, and whoever oversees the learning platform need not be a $100k talent.

Large companies might employ several people to oversee their training, and these companies stand to save even more.

Reduced costs for training

Training costs vary for companies, but let’s imagine it takes 20 hours to train a new employee with basic onboarding (that’s conservative by most standards).

A manager or coworker that dedicates 20 hours at $40/hour will cost a company $800 for initial onboarding. And that doesn’t include the cost of lost productivity on the part of the trainer.

An LMS that automates this process brings that cost down to $0. That’s an immediate savings of $800 for a single onboarding.

Effective learning platforms also boost retention, meaning the new employee will be better able to do their job and you’ll pay less for follow-up training. Plus the manager or coworker that would have been training the newcomer will be doing what you hired them to do.

Learning management systems reduce the cost of every part of training, from the initial orientation to the follow-up. The more training you do, the more you’ll save.

More effective employees

Because of the increased effectiveness of LMS-based learning, employees trained this way are going to be better at their jobs.

That means salespeople will be better able to sell. Customer service reps will better meet the needs of the customer. Executives will improve their ability to lead.

No matter which type of employee you’re training, they’ll be better at their job. And that means increased revenue.

It can be difficult to quantify the ROI of a learning management system when you start thinking about employee effectiveness. But you can be absolutely sure that you’ll see improved performance.

How to Assess LMS Costs for Your Company

The average company ends up spending 59% more than expected on its LMS.

Striking the right balance between functionality and affordability is no small task. Companies can choose anything from a basic, free platform to an expansive, complex, and costly legacy system. But figuring out how much it’s all going to cost can be incredibly confusing.

With that in mind, here a few pricing considerations to keep in mind when selecting your learning management system.

What type of LMS do you need?

With hundreds of systems on the market, a company’s LMS options are diverse.

A compliance system will offer different capabilities and be priced in a different way than an informal learning or blended learning tool, so it’s important to determine exactly what you’re looking for before you start shopping around.

Talk to the people who do the training at your company, and make sure to review both what you’re doing now and what you might be doing in the future. A system that’s flexible and scalable will make things that much easier.

Make a list of features that you’d like to have—do you want mobile access? detailed reporting metrics?—and consider systems that meet as many of your needs as possible.

Who will be using your LMS?

The composition of your user base will play a significant role in the cost of your LMS.

Are you planning on using the system primarily to train internal team members? Provide orientation materials to customers? Share information with external vendors? All of the above?

There are platforms that specialize in each of these areas, and they all price their products a bit differently. And, of course, there are systems that will work in any context.

How do you want to pay?

In addition to a wide range of capabilities, learning management systems also cover a variety of pricing models.

An LMS provider might charge a per-user fee, a monthly subscription fee, a fixed cost based on usage volume, an active-user model, or others. In our experience, most companies encourage their users to sign on at least once a month, so the two user-dependent models usually work out to be around the same price.

Think about your training program and which type of pricing model will be most efficient for you. You may have to run some calculations, but the potential savings is worth investing time in.

Be sure to think about your company’s growth, too. Will you be bringing on more employees, or ramping up your training? That could change the pricing model you prefer.

What are the hidden costs?

Be sure to read the fine print when investigating a learning management system. Many vendors levy additional charges for installation, CRM integration, support services, white labeling, and admin training, all of which are critical to successful LMS use.

Make sure you inquire about these kinds of hidden costs up front, as they can easily cause your bill to balloon if you’re not careful.

Upfront Costs Become Savings Quickly

Paying for an LMS—even an affordable one—can be quite daunting. But as we’ve seen, you’ll quickly recoup the expense in reduced training costs, higher employee retention, and increased employee effectiveness.

It’s why one company paid us $250,000 before we even had a product. Because they saw that the savings could be enormous.

Run some numbers at your company, and you’ll likely find the same.

 

At Continu, we know that picking the right LMS can be a daunting process, but we’re here to answer any questions you might have along the way. You can also check out the Quora thread that first inspired this blog post for more insights.

 

Dann is a long-time freelance writer with a passion for doing more with less. He writes about productivity and efficiency for businesses of all sizes.