Just how do you set your fees as a coach? Does it depend on your experience, your own self worth, or what the 'market' itself dictates? Do higher fees give the impression of success - and the coach giving better quality? Olivia Stefanino looks at the arguments and asks whether it's time to set some industry guidelines.
Maybe it has something to do with the fact that as a Gemini, it's all too easy to see both sides of the argument - so help me out here – because I've been wondering about how coaches actually decide what to charge their clients? While there are many persuasive arguments, I simply can't decide which is the most convincing.
Before we investigate the matter from a number of different perspectives – and I'm sure there are many more than those I've thought of – it's probably worth pointing out that coaches are currently charging wildly different rates and often for pretty much the same service. A quick straw poll I conducted recently revealed that coaches' fees generally seem to be ranging from £500 upwards for a session - through to 'nothing for friends'.
While no one has the right to dictate what level of fee is actually 'appropriate', with such a variance in charges, it's hardly surprising that there's an underlying suspicion about coaching in the marketplace.
Is it simply that coaches with high self-esteem feel comfortable with charging more? Or is there something else going on?
Four of the most common persuasive arguments used by coaches when they're justifying their fees are:
Persuasive argument one:
"Coaching is about the value you bring rather than the fees you charge."
Even though some coaches don't actually measure their effectiveness, most of them do – by agreeing desired outcomes with their clients before the coaching process begins. If the client has previously failed to achieve a goal on their own, but feel that with a coach's help they can fulfil their dreams, then the coach's time and expertise does indeed have a value. There's a clear equation between how much a client wants something and how much he's prepared to invest in getting it. What is it worth to achieve the goal? And how expensive is the pain of not achieving it?
Story: A man was choking to death when a nearby doctor came to his rescue by performing the Heimlich manoeuvre. Much relieved, the man thanked the doctor, saying: "You saved my life. I can't ever thank you enough. How much do I owe you?" The doctor replied, "Tell you what. Just give me a tenth of what you'd have been prepared to pay me two minutes ago!"
Persuasive argument two:
"In today's society, people tend to value most those things for which they pay the most."
It may be a case of 'Emperor's New Clothes' – and the argument goes someway to explaining the current obsession with 'designer labels'. Perhaps unsurprisingly, when people pay for and value the advice they get, they follow it and get the results they desire – which means that that they feel they're getting excellent value for money. And then they tell everyone about it!
But when they don't pay and as a consequence don't value the advice they get, they don't follow it and don't get the results they desire – which means that they feel the advice (or coaching) was a complete waste of time. And then they tell everyone about it!
Story: A woman struggled with her coaching business – not least because her husband didn't take her new work seriously. The more he belittled her, the less confidence she had. The result was that she attracted fewer clients and in the end, she had trouble even giving her services away for free. However, after signing up with a coach of her own who helped her work on her self confidence, she began to see the real value which she brought to clients and after a few months, she began to feel comfortable with charging for her time. The strange thing was that as she began to charge more, she began to attract more clients!
Persuasive argument three:
"It all depends on what the market expects."
When it comes to setting fees, a coach's own life and business experiences definitely come into play. Even though they may well be offering the same quality of service, a coach who focuses on helping celebrities will probably expect – and be expected – to charge far more than someone who's decided to focus their coaching activities on one parent families.
Story: Two men had very different working lives. One was a City high flier while the other never managed to earn much more than the minimum wage. Both men had an interest in the healing arts and as they approached middle age, they independently decided to train as kinesiologists. The association with whom the men did their training recommended that in their first year as qualified practitioners, they should be charging no more than £35 for an hour's session. The City high flier was appalled at the idea of earning so little. His low-earning chum was equally appalled at the thought of so grossly overcharging!
Persuasive argument four
"It's your expertise and experience which governs how much you can charge."
It's all too easy to fall into the trap of thinking that you're simply swapping time for money – and at the end of the day, for all of us, time is the one commodity which can't be replaced. Each day, we're all given exactly the same number of seconds, minutes and hours. From that viewpoint, it's hard to argue that one person's time is more precious than someone else's. However, it's a very different story when you take someone's life experience, studies and expertise into the equation.
Story: An engineer gets called into factory as the plant has broken down. Within 10 minutes, he's isolated the problem, given the machine a good kick and everything's running smoothly once again. "That's a relief," says the director, "we'll make sure we pay your invoice straight away." However, it was a different story when the very same director saw the size of the bill. "Why," he exclaimed to the foreman, "the engineer was only here for 10 minutes and all he did was kick the machine. How dare he charge us £1,000? Tell him that I'd like him to itemise the bill." The engineer happily obliged. The subsequent invoice read, "Kicking the machine: £50. Knowing where to kick the machine: £950".
Is it time for coaching institutions to set guidelines regarding the fees coaches charge?
Olivia Stefanino is the author of 'Be Your Own Guru' and has run leadership and coaching programmes within both blue chip organisations and SME's over the last 10 years. To download her free tips booklet '127 ways to harness your personal power' visit www.beyourownguru.com