How to price coaching services is one of the most frequently asked questions I get.
One of the worst moments in a new coach’s life is that silent moment between when you quote your rate to a potential coaching client and his response.
“Will she work with me?”
“Did I go too high?”
And when he says “When do we start?”, a new set of doubts creep over you:
“Should I have gone higher?”
“Did I lowball the price just to get a client?”
You know the feeling. You’ve got the new client and it turns out to be more work than you thought.
Be sure that you know your worth of the results you help your coaching clients to get and communicate it to the client upfront.
Here are 3 ways to come up with a price for your coaching services.
1. Charging by the Hour
If you charge your coaching clients hourly, how do you know what to charge them? Did you pick a number out of the air? What was your rationale?
For coaches who choose to bill hourly, I recommend the following approach to determine what you charge:
a) Calculate what you want your salary to be.
b) Add to that any subcontractor expense that you may have: freelance writers, web designers, etc. This is your “labor total”.
c) Add all your expenses: phone bill, advertising, promotion, rent, self-employment tax, supplies, tools, etc. This is your “non-labor total”.
d) Add your labor total to your non-labor expense total.
e) Add in any profit goal you may have for your business.
f) Letters (d) plus (e) equal your Total Required Revenue.
g) Divide your “Total Required Revenue” by the number of BILLABLE hours for the year. Remember that you will not be billing 40 hours/week. The result will be the amount you need to charge per hour to make your salary goal.
If you bill hourly, take the time to complete the above exercise and, if necessary, increase your rates accordingly.
2. Pricing Coaching Packages
Coaching packages are a great way to price your services. You should still use the formula above. Then break your packages down according to the formula. For example, if your hourly rate is $100 an hour, create a 3 session package for $297 and a 6 session package for $557.
Give your packages names such as “Success Package $297”, “Ultimate Goal Package $557”. Or Silver, Bronze, Gold packages, etc.
3. Compare other coaches in your coaching niche.
One idea is to check out life coach salaries and the average prices that other coaches are charging. You can check out this Life Coach Salary link for more information.
Here are some tips when pricing your coaching services.
1. Try not to bargain.
It can be hard when you have a few coaching clients or need more money, but whatever you do, do try not to bargain with your clients/prospective clients over your pricing. When you bargain, you immediately lower your perceived worth with that person and will set you up for a relationship of nitpicking over every nickel and dime.
2. Provide a “solution” and not a “service.”
Ensure your coaching clients understand the benefits they will receive from working with you. You are not providing them a service; you are providing them a solution.
The difference is that people value solutions more than they do services. Whenever discussing price with a potential client, focus on the benefits, the “solutions” that she will receive as a result of hiring you.
Will she have more free time? Will her business see an increase in profits or clients? Know the benefits and speak to them!
3. Be prepared to say “Goodbye”.
Not everyone is going to accept your terms. Deal with it. They weren’t meant to be your clients anyway and would have just taken up the time that you could use for a better-qualified client. Save your time and energy for those who recognize your worth – you’ll both be happier and more productive.
Pricing your services is one of the most emotional things you’ll do as a coach. Be sure to take the time to review the client’s coaching goal, before just blurting out a price – doing so will save you a lot of time and frustration down the road.
Plan of Action:
Calculate what you want your salary to be. Go back to #1 and start from there. Then come up with a price for your coaching service.