“How much do you charge?” A question dreaded by most life and business coaches in the world. You don’t want to scare a prospect away with fees that are too high or too low, and how you respond means the difference between getting a client or getting crushed.
When you set your coaching fees, your mindset takes over:
- “My clients can’t afford it.”
- “I am not experienced enough to charge more.”
- “I wouldn’t pay that much myself.”
…and other stories we tell ourselves. I recently discovered a great article by Kathleen Schulweis, an executive coach who specializes in workplace bullying, on the 8 ways to think about your coaching fees and charge more with confidence:
“A recent Harvard Business Review report noted coaching fees range from around 100 bucks to over 3K for a session. That’s quite a range. How do you figure out your sweet spot-the place your clients are willing to pay for your services? Ah, this is not a simple question, nor a simply answered question. But here’s what I know:
- You can’t charge more than you can comfortably ask because your discomfort will show through and hurt your credibility
- Your mindset influences your ability to set fees, therefore, as your confidence grows, so will your fees
- You have to determine if you’re a commodity service or a professional service: we bargain for commodities, we respect professionals
- Consider Packaging your Services: Many in private practice charge by the hours per month. But that’s not the only way to make a living
- Pay attention to your “league”. Are you in the majors, minors or varsity league? Plan out what it will take to move up, if you want to.
- Align yourself with bigger league players and practice, practice, practice. Even if you’re on the bench for a while, you’re hanging with the home run set and that increases your credibility.
- Work your skills and talents: All you do should be based on, please, your unique abilities, not other people’s pre-written seminars or models. It’s very difficult to be credible as a trainer IF you haven’t developed your own materials.
- Develop your unique skills: Coaching and training models can and should be adapted to suit the needs of your clients and the strengths you bring to the work. Your creative adaptations will make you uniquely qualified to serve your clients and charge your worth”
(Article source: Confidence Connections Coaching)
The most important point I want you to take away from this is that there is no such thing as “hourly coaching fees” – thinking this way makes coaching a commodity. Create ways to add more value to your coaching programs, so that your fees become irrelevant.
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{ 12 comments… read them below or add one }
Thanks for this very helpful information. I am just starting my business which includes coaching and training services. These insights are very helpful to me and I will be sharing your post with others who are in the business of coaching too.
Hi Milana
I have one fee level for business clients and it is at the higher end for business coaching in the UK- £500 per month. I include 2 one hour sessions and unlimited contact in between to share successes, answer questions and deal with anything urgent. My coaching business is at http://www.wow-coaching.co.uk
Personal clients (of which I have a few) pay half that.
For solopreneurs, I tell them I have two fee levels and that we will discuss after the first session what fee level is appropriate for their needs, and their financial circumstances. I also talk about the value for them in having the fee being a stretch: if they pay on the higher side for them, they are more likely to commit to the process and benefit more.
I am also a coaching supervisor (see http://www.coachingsupervisor.co.uk). I am running an offer currently where the initial session is given free in return for a donation to a charity: the clients choice or my choice. Beyond that I offer a few coaches, coaching supervision on either a pay what you choose basis, or at a premium of 20% on top of what they charge their clients. I switch between the two variations. As coaching supervision is monthly, the outlay for coaches is quite low. If readers don’t know about coaching supervision, there is an MP3 on the website as well as full details.
Hope this is useful information.
Karen
Hi Milana;
Thank you for these great points. Coming up with pricing is a tough exercise. Any time we talk about money, there’s so much more to it.
One other point I find useful is to give people an idea of an end point. It can be time-based, outcome-based or procedure-based. The last 2 are better because they put the responsibility squarely with the client as to how long it will take, as they continue to pay for monthly coaching.
Having a program really helps clients see where they are in relation to where they are going.
One of the biggest mistakes I made when I started out was to think that my clients couldn’t afford my fees. I sat down and worked out how much money I needed to make to ensure I was financially viable as a business. It soon became obvious that if I wanted to charge low fees then I would struggle with my mortgage and bills. So I looked at how many hours I wanted to work to maintain my Work/Life Balance and how many clients I needed maintain my existing lifestyle. It seemed pointless to work harder and longer as a self employed person and get less than I could whilst working for an employer. There was one piece of advice that struck a cord with me though. As an employee I was not worth my hourly equivalent rate. My value to my employer was 5 to 6 times what I was being paid because that is what he was charging for my services. I took my annual salary, divided it by my working hours, ensuring sufficient holidays and was surprised at how high the fee was. I had felt uncomfortable charging much above my hourly rate and now I realised that my fees were less than a fifth of what my ex-employer was charging. I set my fees accordingly and have never been short of work. My clients have never questioned them either but if they did I would send them away. I have never ever had a client who could not afford my fees and my fees are significantly higher than my nearest competitor.
Wilf Archer
Wilf – Right on! I think some of the worst advice conventional freelancers and business owners receive (still) is to calculate their fees by some very conservative formula based on their current hourly wage. It’s bad advice for the reason you mention – the base numbers are often wrong. It’s also bad advice because it fails to take into account what the underlying model is.
As employees, we sell our time to someone who, in essence, packages our labor into something greater that is priced to the market based on VALUE not cost. This is equally true for the $75 per hour senior copywriter and the $5 per day worker in a sneaker-making factory. To break the cycle, we need to truly “employ” ourselves and think of our labor in that way, as an ingredient not our whole business. To succeed, we must find something of value that uses our labor but is worth much more to our customers than any standard rate for our occupation.
Whatever they pay you, that’s what you’re worth
Best advice I got early on. I first looked at it that I charged way too little, but after a while I realized that I wouldn’t have gotten that base set of clients if I charged more, so it all worked out.
That being said, I still raised them more, realizing I had to put a premium on one-to-one time and keep the older rate for group sessions.
“You can’t charge more than you can comfortably ask because your discomfort will show through and hurt your credibility”
This took me a while to get to. I used to cringe/avoid/hesitate talking about price, which is crazy when I look back at it.
Great thoughts, thanks Milana
Great ideas Milana….this is very helpful.
One thought I would add is that I have interacted with hundreds of coaches over the last 2 years and I have found that a coach’s fees are in direct proportion to the confidence they have around their ability to produce a specific result with their clients. When my partner Kim and I started coaching we charged a nominal rate; once we started seeing results with our clients, our confidence in ourselves grew and our fees increased accordingly. At the end of the day, when can assist a person to transform their business, or help them to be peaceful and happy, that’s HUGE. And you deserve to get compensated for it. I would invite coaches to ask themselves, how confident am I in my ability to produce over the top results for my clients? You’ll know the answer immediately, and your price point will be easier to establish.
Hi all
Nice question and something I’ve given a lot of thought to regarding my program called Packaging Your Passion. Currently, I am charging $400 per month for 6 hours of coaching time plus unlimited support via email in between sessions. Though I recently changed my fee from $375 t0 $400, I am still undercharging right now. I may need to revisit this over time, but I simply LOVE what I’m doing and having a ton of fun, and I do want to make sure it’s affordable for people. Here’s a description of my program to see all that I do for and with my clients:
The program serves as a “one-stop-shop” for helping people create their online business by coaching them through each step of the process, including planning and creating their web site, ebooks, courses, video, membership sites, publishing a book, and anything else they want to offer.
By bringing together my experiences as an online business coach, life coach, and computer teacher for the past 10 years, I’m able to offer a unique virtual program that, through the magic of “screen sharing,” the client can simply watch, listen, and share as we put the pieces of their business together right there on the spot, in real time, from anywhere in the world.
I have found that this is the easiest, fastest, and most effective way to help coaches, teachers, writers, artists, and others transform their passion into an online business that creates multiple streams of income. It also brings a strong sense of play to the process as the client simply watches and listens while their project comes to life in real time!
Thanks for letting me share
Carl
Thanks for this very useful source. I am just starting my business which includes training services and software house in my country. These insights are very confiential knowledge to me and You will be sharing your post me more than need the business of coaching too.
So many think
Dear Milana,
Thanks so much for this very timely article. After struggling for over 4 years as a Spiritual Life Coach, and coming very close to throwing in the towel, I am in the process with the help of my VA of restructuring my entire “practice” into a “business”, and I mean from the ground up. We are overhauling everything, from the website, to pricing, to target market, etc.
I was fortunate to be able to work closely with you for a year in your “Inner Circle” and have tons of notes, etc. from that time, which I simply never implemented because I was still in a “practice” mode and needed to be in a “business” mode. I had just graduated from Coach Training Alliance and couldn’t wait to get going, but what I realized after a short time working in your “Inner Circle” was that coaching schools often spend too little time on the business end of things and most of the time on the “practice” end of things. The result is that you end up with a very small business/practice, in which you work your butt off for very little compensation.
There’s an easier way and you have been the champion of that easier way for a long time now.
I am once again fired up about coaching and building a business and have you to thank for that. I look forward to every email I receive from you because I never know what “golden nuggets” it might contain.
I also dream of the day when I will once again be flush enough to afford working more closely with you in whatever you are now calling your “Inner Circle”.
Thank you for everything and I miss speaking with you and hearing your challenging suggestions for building a rock solid business.
By the way, I had the chance to attend a free teleseminar hosted by Rhonda Hess recently touting her program, “How to Choose and Champion Your Ideal Coaching Market”. It was a good 90 minute session with lots of questions and answers, but it was mostly review for me, and I couldn’t help but think, “Milana went over this with me years ago!” Nonetheless, I wasn’t in the “space” to really “hear” you at the time and Rhonda’s session got me fired up again and reminded me that I already have all the tools I need “to choose and champion” my “ideal coaching market”, and I got them all from YOU!
All this is to say, that I may not have had “ears to hear” during the time I worked with you, but it was very valuable time nonetheless because of what I took away from our time in the “Inner Circle”, and I consider you my Mentor Coach on every level. I look forward to implementing those things I took away from our sessions in my new coaching BUSINESS!
Look for many new things to be coming from me in the months and years ahead. The “hawk” is preparing to soar! Thank you again and I wish you, as always, many blessings. I look forward to keeping in touch with you. Peace,
Gavin
Dear Milana:
Thanks so much for posting my article on confidence and fees and business growth, and especially thanks for giving me full credit and a link back to my site. I’ve had many visitors as a result of your generosity. You clearly practice what you teach.
I love all the comments this post and your offerings have generated. I am reading your Manifesto right now and it’s a great piece. All the best, Kathleen
You’re very welcome – it was a great article, Kathleen!