7 Pricing Secrets All Coaches Should Know

Kevin Oubridge
Director
Blue Chip Coaching Limited
Blogger
Share this content

What do you charge for your coaching?

A cheeky question, I know. But one that all coaches working with corporates must answer at some stage. And when you do, it’s better to be comfortable and confident in stating your price.

Unfortunately, if you are like a lot of coaches, you are distinctly uncomfortable and totally lacking in confidence when talking money.

Why?

It’s just a number, after all. Except we all know your price is far more than this. It’s a statement of what you’re worth. It can also be the difference between success and failure in selling your services. Pitch it too high and your potential client may become another missed opportunity. Pitch it too low and you might be kicking yourself, realizing at a later date you could have got more. Still, you’ll know for next time.

Unless of course next time is further business with the same client company. In which case you are tied to your original price. And if next time is with a wholly new prospect, well, it turns out that knowing you could have got more with your last client doesn’t help. You pitch your price too low again!

This is crazy!

A coach who gets tangled up on stating their price is like a pilot who’s scared of flying. It just doesn’t make sense. You add huge value to your corporate clients, why shouldn’t you be confident in charging an amount that reflects the difference you make?

It turns out, it’s all down to mindset. Something you’ll have to work on yourself. However, understanding the following 7 secrets of pricing will help you:

1.   Know the total hours you have to play with

This is very simple! There are 52 weeks in a year and it’s standard practice to work 40 hours a week.

                                                  40 X 52 = 2,080 hours

2.   Deduct holidays and development time

From this total you need to subtract 8 bank holidays if you work in the UK, although this will differ in other countries. In addition, allow yourself 4 weeks holidays. This makes a total of 5 weeks and 3 days, so be generous to yourself and make it 6 weeks in total for holidays.

Add to that a minimum of 2 weeks for your development – coaching and marketing conferences, presentations and courses. Now take the 8 weeks for holidays and development from your total.

                                                  2,080 – (8 X 40) = 1,760

3.   Deduct the stuff it’s easy to overlook

What about lunch? Okay, you won’t take lunch every day of the 44 weeks you have left but you should most days. It’s unhealthy not to. Let’s say you take 200 one hour lunches of a possible 220.

In addition, let’s say you take 5 days sick (40 hours) and spend another 20 hours waiting in for deliveries and going to the dentist and incidental stuff like that.

That’s another 260 hours where you can’t earn.

But there’s more. You need to allow time for general admin, such as planning, working on your website, doing your accounts, sorting out insurance, researching and writing marketing materials. It all takes a lot longer than you think. Let’s say 100 hours.

And then there’s what I call the general disjointedness of everything. You won’t move smoothly from one timed activity to the next. You arrive at client offices early and have to wait. You coach one client after another in the same offices, with a half hour break. You fiddle about with your mobile between invoicing a client and getting on with the next activity. It all adds up. Let’s say over a year it accounts for another 100 hours.

So, that’s 260 + 100 + 100 you need to subtract from your running total.

                                                  1,760 – 460 = 1,300

4.   Deduct time spent on marketing

In our coaching practice the coach follows a standard marketing process to sell an Accelerated Success coaching programme. The process involves qualifying calls and brief meeting, a 90 minute Strategy Session with all genuine prospects, preparation for this session and follow up meetings, report writing, report back meetings, admin & scheduling, and travel.

We have found that following our process a single coach can comfortably market an absolute maximum of 15 programmes in a year, bearing in mind that you also have to deliver the programmes you sell.

We’re pretty well set up, winning further business from existing client companies, which reduces our time spent on marketing and selling. It still takes a minimum of 13 hours to win a new coaching client, and it can take 20 hours or more. And sometimes we fail to sell a coaching programme at all. Not often, but it does happen.

A single coach sells 10 programmes in the minimum time of 13 hours, and 5 that take 20 hours to sell. They have 5 failures after the qualifying stage but before the Strategy Session, at 2 hours each, and 2 failures after completing the whole process, at 20 hours each.

                                                  1,300 – 280 = 1,020

5.   Focus on delivery

One of our standard coaching programmes involves 12 hours coaching, plus 3 hours of start-up and review meetings with the coaching participant and line manager. Every hour of these 15 hours takes 4½ hours to deliver – preparation time, writing up coaching notes and emailing to participant, admin & scheduling and 2 hours travel. Sometimes we coach people at the same offices, meaning there is less travel, but sometimes travel time is more than 2 hours, which evens things out.

This works out at 67½ hours per programme and 1,012.5 hours for 15 programmes.

                                                  1,020 – 1,012.5 = 7.5

Of course, it doesn’t work out at ZERO hours left but it’s close enough.

6.   Analyse the results

So, in summary, you start with 2,080 hours in a year. You whittle that away to less than half available for coaching delivery, of which less than a quarter is actual coaching hours. And that’s if you’ve got a marketing & delivery process that works and is fully up and running. You could spend a lot more than 280 hours on marketing, leaving you less time for delivery.

Even with a well bedded in marketing process you might sell only 10 or fewer coaching programmes per year. And if you charge for your coaching by the hour or day or some other way, who knows how much you will sell.

However, let's take 10-15 programmes as your target range. Charging 3K per 15 hour programme works out at 30-45K income per year, of which I suggest you allow at least 5K for your operating costs. This leaves 25-40K per year.

If you charge 5K per programme, that works out at 45-70K per year.

And 10K plus per programme is 95-145K or more per year.

If you don’t sell by the programme, 3K per 15 hour programme works out at £200 per coaching hour. 5K is approximately £335 per hour, and 10K is approximately £670.

7.   Set your price

Clearly, different coaches will be in very different situations. We work with leaders in global IT companies. They make a real difference to business success, meaning we can charge a higher price than if we worked with less senior people in the same or similar companies, or with leaders in smaller companies.

In addition, some sectors will be prepared to pay more than others. For example, a telecommunications company might be prepared to pay more than a manufacturing company. Hopefully, you will know your target market and it’s down to you to find out what they’ll pay.

It may sound a bit strange, but you could always ask them!

Whatever you set your price at, next time you are asked your rate you will know why you charge what you charge. All you then need to do is get comfortable with saying it and confident you are worth it.

Want to learn how to grow your coaching practice?

Download The Alligator’s Bite - it's FREE! I reveal the step-by-step process you can use to win Blue Chip coaching clients and build long-term relationships, where you win further business year on year. You’ll also receive regular Blue Chip Tips blog posts to your email.

About Kevin Oubridge

I work with executive coaches who do the marketing stuff you're supposed to but aren't winning any business.

You want to win clients you like working with, get paid what you're coaching is worth & build long-term, highly productive relationships with your client companies where you win further business year on year.

Check out Blue Chip Tips my regular blog on growing your coaching practice.

Also have a look at The Leadership Coaching Alligator Handbook. Over 200 pages, where we reveal the process, tools and know-how we used to grow Accelerated Success, our thriving coaching practice.

 

Replies

Please login or register to join the discussion.

26th Feb 2014 19:52

Great formula and advice. Real #s. I think this gives anyone confidence in charging their fees. I think the gold is in having/knowing a market that is willing to pay much more than your minimum needs. (I like your clear writing style Kevin).

Thanks (0)
27th Feb 2014 10:41

Thanks for the comment Kenn. Glad you think it will give people confidence in charging what they're worth. Although we all talk about charging based on the value you bring, you need confidence to do that, and knowing the time and financial costs of delivering your coaching services is a start in building that confidence.

Thanks (0)
avatar
17th Mar 2014 18:31

Kevin

Congratulations on a really useful and relevant reality check for coaches and pricing, well presented.  Knowing your value added is a must for coaches.

Dave Grundy

Tuit Achievements

 

 

Thanks (0)
18th Mar 2014 10:01

Thanks Dave. Glad you like it. I agree, knowing your value added is a must for coaches. If you haven't already read it, this might also be of interest to you 7 Steps to Measuring ROI in Coaching.

Kevin

Thanks (0)
09th Apr 2014 09:47

Hello Kevin,

Great post - I like it when information is backed up by solid numbers. I wondered if you'd thought of training marketplace websites such as our site www.trainnation.co.uk to help reduce marketing spend? Leveraged properly it would certainly assist in keeping the marketing effort in check.

Thanks,

Steve

Thanks (0)
09th Apr 2014 10:18

Thanks Steve

Might have known there'd be an online fix. Anything that can reduce the financial and time costs of marketing has got to be worth looking at.

Kevin

Thanks (0)