7 Pricing Secrets All Coaches Should Know
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.
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.
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