Clients

The Coaching Pricing Model

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costMany people new to the profession of coaching often find themselves, from the outset, unprepared for the challenge of how much to charge clients. This is largely due to the intangible nature of the service and whether one should use the traditional “Cost Plus” or the “Value Added” model of pricing. Let’s explore both.

Cost Plus

This is very much the model that is used based on the costs incurred by the provider, in this case the coach. Traditionally the legal, consulting and accounting profession, calculate an hourly rate based on the direct costs of labor consumed in addition to some calculated overhead allocation. The trouble is within the coaching profession you could hear anything from $50 to $500 per hour. With such a disparity it is small wonder that new coaches are very unsure what to charge because there really is no benchmark. In addition this can be very limiting relative to what a client might actually be willing to pay; aka leaving money on the table. The client might feel they got a good deal but leaves a bitter taste in the mouth of the coach which is never good in the long term.

Value Added

A more favorable model that is emerging is using pricing based on the potential value to the client. This of course begs the question as to how one might determine value. The answer lies in putting considerably more effort in up front to determining what the client wants or what success might look like. In pursuit of this information, one’s coaching abilities will be clearly demonstrated, affordability of client will be better understood and relationships get developed thus aiding the overall selling process. All of this leads to being able to make a better assessment of how the individual / organization could truly benefit from the coaching service. The consequence of this approach is that, more often than not, a price is arrived at that very adequately compensates the coach while at the same time providing the client with a clearer sense of value for money.

So the next time you, as a coach, are faced with a quandary of how much to charge, spend more time upfront coaching them, better understanding the need, building the relationship, demonstrating your abilities and ultimately closing the deal.

The Coaching Pricing Model

by necoaching necoaching No Comments

Many people new to the profession of coaching often find themselves, from the outset, unprepared for the challenge of how much to charge clients. This is largely due to the intangible nature of the service and whether one should use the traditional “Cost Plus” or the “Value Added” model of pricing. Let’s explore both.

Cost Plus

This is very much the model that is used based on the costs incurred by the provider, in this case the coach. Traditionally the legal, consulting and accounting profession, calculate an hourly rate based on the direct costs of labor consumed in addition to some calculated overhead allocation. The trouble is within the coaching profession you could hear anything from $50 to $500 per hour. With such a disparity it is small wonder that new coaches are very unsure what to charge because there really is no benchmark. In addition this can be very limiting relative to what a client might actually be willing to pay; aka leaving money on the table. The client might feel they got a good deal but leaves a bitter taste in the mouth of the coach which is never good in the long term.

Value Added

A more favorable model that is emerging is using pricing based on the potential value to the client. This of course begs the question as to how one might determine value. The answer lies in putting considerably more effort in up front to determining what the client wants or what success might look like. In pursuit of this information, one’s coaching abilities will be clearly demonstrated, affordability of client will be better understood and relationships get developed thus aiding the overall selling process. All of this leads to being able to make a better assessment of how the individual / organization could truly benefit from the coaching service. The consequence of this approach is that, more often than not, a price is arrived at that very adequately compensates the coach while at the same time providing the client with a clearer sense of value for money.

So the next time you, as a coach, are faced with a quandary of how much to charge, spend more time upfront coaching them, better understanding the need, building the relationship, demonstrating your abilities and ultimately closing the deal.

Keys To Success No. 5 – Building Relationships of Trust

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All sales start with a simple conversation. An effective sales cycle, according to Michael Port, author of Book Yourself Solid, is based on turning these simple conversations into relationships of trust with your potential clients over time. We know that people buy from those they like and trust.

If you don’t have trust, then it doesn’t matter how well you’ve planned, what you’re offering, or whether you’ve created a wide variety of buying options to meet varying budgets. If a potential client doesn’t trust you, nothing else matters. They aren’t going to buy from you—period. If you think about it, this may be one of the main reasons you say you hate marketing and selling. You may be trying to market and sell to people with whom you have not yet built trust.

  • What are your potential clients thinking?
  • Do they really believe you can deliver what you say you can?
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Keys To Success No. 4 – Choose Your Ideal Clients

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  • Are You Attracting Your Ideal Clients?
  • Do You Have Clients That Drain Your Energy?
  • Are You Booked Solid With Your Ideal Clients or Are the “Duds” Getting in the Way?
  • Have you considered a Red Velvet Rope Policy?

It may be time to consider one. Michael Port, author of Book Yourself Solid, highly recommends a Red Velvet Rope Policy that allows in the most ideal clients, the ones who energize and inspire you. It also prevents the ones that are “not ideal” from working with you. This may sound like a crazy concept. You may be thinking, how am I going to grow my business and say no to some potential business. It works!

Many coaches have taken on this challenge and are amazed at how powerful a concept it is for both personal fulfillment and business growth. Read more

Key To Success No. 3 – “Who Knows What You Know? “

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One of the elements to becoming booked solid is being considered credible within your marketplace. As a professional service provider, it is essential to consider the importance of exactly who it is that knows what you know in your area of expertise. Not only do potential clients need to know what you know, but also your marketing and referral partners.

So, what would you like to become known for within your target market? Be as specific and focused as possible. Here are some questions to help you get started.

  • In what areas are you currently an expert?
  • Where do you need to develop your expertise?
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Coaching 101 – What is it?

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In the purest sense coaching is about utilizing specific skills and tools effectively to facilitate a discussion of client self discovery, and support them towards the attainment of desired results. Coaches may certainly share their knowledge but the undertone is one of empowering and enabling on the part of the coach, and then accepting responsibility and taking action on the part of the client. The real work of coaching is not what happens during sessions, it’s what clients do between sessions.

At iPEC Coaching we look at two fundamental sets of skills.

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