This article will explore tips for setting your coaching prices so that you and your clients are happy with the arrangement.
You run your own business and sell coaching services, but coaching prices can be a complex topic to negotiate.
- This article will explore tips for setting your coaching prices so that you and your clients are happy with the arrangement.
- What are some typical coaching fees?
- 3 Common Mistakes Beginners Make When Setting Coaching Prices
- Focus On The Value To The Client
- Different coaching business pricing structures to consider (including pros and cons)
- Charging an hourly rate for coaching sessions
- Charging monthly package rates and retainer fees
- Tiered packages
- 10 Tips for Pricing Your Coaching
- 1. Charge monthly
- 2. Set a reasonable price for your coaching services
- 3. Weigh the benefits and disadvantages of listing your rates on your website
- 4. Results speak louder than words
- 5. Consider your target market
- 6. Offer a variety of services at different price points
- 7. Offer discounts and freebies sparingly
- 8. Offer a free trial or money-back guarantee
- 9. Consider how much your business costs to run and your desired monthly income
- 10. Raise your rates gradually over time
- Now it’s over to you! How will you charge for your coaching services?
On the one hand, you want to charge enough to provide good value for your clients while also ensuring that you are not undercharging and leaving money on the table.
We’ll look at what factors to consider when pricing your coaching packages and some guidelines to follow when negotiating with potential clients.
By following the below tips, you can feel confident in charging what your time is worth and provide excellent value for your clients.
What are some typical coaching fees?
The coaching industry is multiplying, and with that comes a wide range of prices for coaching services.
Typically more experienced coaches with credentials may charge higher rates, while those just starting may charge lower rates.
Many coaches also offer package deals ranging from $500 to $5000 per month. These packages can include a set number of coaching sessions, access to additional resources (such as an online course or community forum), and email or phone support between sessions.
Some coaches also offer group coaching programs, typically priced per person. For example, a group coaching program for five people may cost each person $250 per month.
As we’ll discuss below, pricing is highly dependent upon all the benefits the coach provides, their target audience, and the industry in which they operate.
3 Common Mistakes Beginners Make When Setting Coaching Prices
When starting as a coach, it can be tempting to charge much lower rates to attract more clients. However, this can be counterproductive in the long run. Coaching is a valuable service, and clients will appreciate knowing they are getting good value for their money.
Charging too little can signal that you are not confident in your abilities or do not take your work seriously. It can be challenging to raise your rates later if you have already established a reputation as a low-cost provider.
2. Setting Rates Without Considering Your Experience and Skills
Coaching rates vary widely, and there is no one “right” price. Factors that should be considered when setting your rates include your experience level, the type of coaching you offer, and the services you provide.
New coaches may want to start at lower rates than those who have been in the business for a while. However, it is essential to ensure that your rates reflect the value of your services.
3. Not Negotiating with Potential Clients
Coaches often feel uncomfortable negotiating rates with potential clients. However, it is important to remember that both parties can benefit from working out a fair price arrangement.
Potential clients may be willing to pay more for coaches with an extensive background in their field or offer premium services such as phone consultations or unlimited email support.
By negotiating a rate that reflects the value of your services, you can ensure that both you and your client are happy with the arrangement.
Focus On The Value To The Client
Setting prices for your coaching services can be tricky, particularly as the coaching profession becomes more competitive and crowded. A competitive pricing structure is the first step to attracting clients.
Although this can be a tricky process, the final price should accurately reflect the value of your service to clients.
You can charge higher fees for your coaching services if you are more focused on providing results for the client.
For example, if you’re a career coach that helps a client to land a new job worth $50,000 in salary than their last job, you can charge a 5-10% fee for your services. In this case, your coaching fee would be in the $2,500 to $5,000 range.
Different coaching business pricing structures to consider (including pros and cons)
There are several different pricing models for coaching services, and while many overlap, they are generally different from one another. To help you determine your pricing strategy, let’s look at three of the most common pricing structures coaches use.
Charging an hourly rate for coaching sessions
Initially, you might consider charging an hourly rate for your coaching services.
By doing this, you’ll know exactly how much you’re earning and how much you’re spending. This way, you can focus on offering the most value for your clients.
As your coaching practice grows, you can eventually increase your hourly rate.
Here are some tips to help you set a reasonable hourly rate:
Know your client. Some clients will be willing to pay you more than others, particularly those with high salaries. You’ll also want to know how much your ideal client is willing to pay because business executives are more likely to pay for your coaching services than college students.
Establish boundaries. Hourly rates are best for new coaches who are unsure how long their services will take. However, hourly rates can result in overcharging since there’s no way to work extra hours for free.
Cons – 3 Problems With Hourly Rates
Charging by the hour poses several problems:
While charging clients an hourly rate guarantees that the coach gets paid for their hours with a client, it also signals that time is a valuable commodity.
Charging clients hourly will likely cause frustration when a project takes longer than expected. You’re unsure how many sessions will take to achieve the coaching clients’ desired results. In addition, it puts the coach in an approval cycle.
Hourly rates don’t reflect the results you provide for clients; instead, they focus on the time you spend with them.
Charging monthly package rates and retainer fees
Most coaches suggest moving away from hourly pricing and towards value-based pricing, i.e., charging clients monthly rates and retainer fees for coaching services.
Monthly packages give the coach greater control over how much time they spend with each client.
The best way to price retainers is to consider them a percentage of financial upside.
A five-fold return on investment (ROI) means that if you charge a client $1500 per month, you must create at least seven times that amount of value in the first year.
On the other hand, if you charge $10K per month, you should generate $50K in new revenue in a year.
Cons of monthly coaching packages
While monthly rates offer more control and stability, they can also leave room for error. For example, if a coach overestimates the hours required to work with a client, they may work for free.
From the client’s perspective, they may wonder if more sessions and monthly coaching are necessary. Typically, they’ll want to achieve their desired results as quickly as possible.
Additionally, monthly rates don’t always reflect the service’s value. Sometimes, it’s worth paying a higher hourly rate for a shorter coaching engagement that delivers better results.
In addition to offering your clients a choice of pricing options, tiered packages allow you to validate your coaching offer and make it more valuable.
For a coaching business, a three-tiered pricing structure can make your offering more appealing to potential clients while keeping costs low.
Consider the following steps to make the most of tiering in your coaching business:
Create different prices for different levels of support. Tiered pricing is a great way to increase your sales revenue. One example of differentiated pricing is adding more features to your coaching package.
Consider the types of coaching you offer. Do you offer a free consultation or a one-on-one coaching session? If so, what are the benefits of each?
Cons of tiered packages
Tiered packages can be confusing for clients and lead to analysis paralysis.
When presented with too many options, potential clients may have difficulty deciding and choose not to buy anything at all.
To avoid this, keep your tiers simple and make sure there is a clear benefit to upgrading to the next level.
10 Tips for Pricing Your Coaching
Setting the correct pricing for your coaching services is crucial to increasing your revenue and keeping your client base. This isn’t as simple as putting a fixed price on your website. There are many variables to consider, including the industry you’re in, your location, and your ideal client type.
Listed below are ten tips for pricing your coaching services:
1. Charge monthly
Monthly retainer fees are an effective way to increase your income without charging outrageous fees. Monthly retainer fees can vary from $500 for new coaches to $20k for elite practitioners.
This method allows you to charge clients predictably, but it can also make clients feel like they own you, making it difficult to set a price.
A monthly retainer fee gives you more control over your time. But carefully evaluate your pricing structure before settling on a monthly fee.
2. Set a reasonable price for your coaching services
Concentrate on attracting clients who need your services, want them, and can pay. While college students may not have the money to invest in coaching, managers in companies often do.
If you want to make your services accessible to a broader range of people, consider using a sliding scale for your pricing. This means you would charge different rates based on a person’s ability to pay.
For example, you could charge $500 per session for clients who can afford it and $50 per session for clients on a tight budget.
3. Weigh the benefits and disadvantages of listing your rates on your website
Should you list your rates on your website? It depends on your business model.
Some coaches feel that listing their rates gives them an air of credibility and transparency and attracts better clients. Others believe that potential clients will be turned off by listed rates and prefer to discuss pricing during a consultation.
4. Results speak louder than words
Which can command a higher price – a business coach claiming they can help clients add an extra 50 or 100 thousand dollars in annual revenue or one with five actual case studies to show?
The latter, of course.
Clients pay more when you have a proven track record as a coach.
You can use case studies as social proof to attract new clients and charge a higher rate.
What if your results are difficult to measure?
If you’re a life coach or relationship coach, it may be difficult to measure the results of your coaching tangibly. In this case, you can focus on the value you provide.
For example, if you help a client save their marriage, that’s priceless. If you help them strengthen their relationships, that has tremendous value.
5. Consider your target market
Who is your ideal coaching client? If you’re targeting high-level executives, you can charge a higher rate than if you’re targeting small business owners or college students wanting career guidance.
The reason is that executives are used to paying for premium services and have a higher budget for coaching. They also tend to be results-oriented and are more likely to see the value in coaching.
6. Offer a variety of services at different price points
Do you offer a one-time coaching service or an ongoing program? What’s included in your Coaching Sessions – an email exchange, a phone call, or an in-person meeting?
The structure of your coaching will affect how much you can charge.
If you only offer a one-time service, you’ll be able to charge less than if you provide an ongoing program. The reason is that with a one-time service, the customer only pays for the value they receive at that moment.
With an ongoing program, the customer pays for the value they receive now and the future value they expect.
Generally, the longer the program and the more contact you have with your client, the higher the price. Remember, it’s not just about how long you work; it’s also about the outcomes you can provide within the agreed time limits.
7. Offer discounts and freebies sparingly
While offers and discounts can attract new clients, they can also devalue your services in the eyes of potential clients. If you offer a discount, make sure it’s for a limited time only and be clear about what the client is paying for.
For example, you could offer a free 30-minute consultation or a discounted rate for a package of coaching sessions.
8. Offer a free trial or money-back guarantee
When starting out, it may be challenging to attract high-paying clients. One way to overcome this is offering a free trial or money-back guarantee.
This shows potential clients that you’re confident in your ability to deliver results, and this approach will help you gain experience and more money over time.
There is no industry standard when it comes to offering money-back guarantees, but we’d argue that a great coach should be able to stand behind their work with a 100% satisfaction guarantee.
9. Consider how much your business costs to run and your desired monthly income
Be sure to account for the costs of running your business when setting your rates. This includes the cost of marketing, travel, office space, and employee salaries (if you have any). You will also need to factor in taxes and other associated expenses.
While making a profit is important, be sure also to consider the impact your pricing will have on your clients.
If you’re having trouble deciding how much to charge, consider these questions:
– How much does it cost you to deliver your services?
– What are the going rates for similar services in your area?
How much do you need to earn to cover your business and personal living expenses?
– How much are your clients willing or able to pay?
The most important thing is to be clear about your pricing before meeting with a potential client, which will help avoid any awkwardness or confusion down the road.
10. Raise your rates gradually over time
As you gain experience and results (make sure you document those case studies!), you must raise your rates accordingly. Coaches who don’t raise their rates risk becoming devalued and underpaid over time.
Of course, you don’t want to raise your rates too high or too often, as this could price you out of the market or deter potential clients. A good rule of thumb is to raise your rates by 10-20% every year or two.
Now it’s over to you! How will you charge for your coaching services?
Now that you understand the factors in setting your coaching prices, by following these guidelines, you can feel confident in the rates you set and ensure that your coaching business is profitable. What price point will you start at? Let us know in the comments!