Getting started in the coaching industry can be tricky. Beside getting started as a coach, you’re also setting up a new business, and that’s a whole different beast to figure out. Like in other industries, settling on a price for one’s coaching services isn’t a cut-and-dry process.
To help you get a holistic understanding about what goes into determining one’s coaching fees accurately, we’ve put together 5 major pricing strategies that will take you to your answer. Get ready to take notes – this is going to be full of insights!
1. Consider business goals
This is going to be the driving force in determining the pricing strategies for your coaching fees. Every decision is going to be ultimately influenced by what your business objective is and the same goes for when you are determining your pricing strategy.
For instance, if the goal is to establish a premium coaching brand, setting higher fees might be appropriate. On the other hand, if the aim is to reach a larger audience and create more accessibility in coaching, a more affordable pricing structure would be favourable.
By understanding your business goals, you can make informed decisions about your pricing strategy for your coaching business. This will help ensure that the fees you set support your long-term vision and help you achieve the desired growth and success.
Here are few examples of different business goals according to an article on the Inc.:
- Increase profitability
- Improve cash flow
- Market penetration
- Larger market share
- Increase revenue per customer
- Beat the competition
- Fill capacity and utilize resources
- New product introduction
- Reach a new segment
- Increase prospect presence
- Increase prospect conversion
2. Do a market price analysis
While the first strategy is rooted in your business objectives, this one ensures that your pricing strategy takes into account the market landscape of where you’ll position your coaching service – you want to be competitive, after all.
If your market is broad and comes with several competitors with offerings similar to yours, it would be smart to consider the market price when pricing your offers. In such cases, it becomes crucial to optimize operational costs in order to maximize profit margins.
On the other hand, if you possess a highly valuable and distinctively niche coaching service, it may be more suitable for premium pricing, which calls for a different approach altogether.
3. Tie fees to specific results
As a coach, it is vital to shift your focus from the number of hours worked or the specific tools or exclusive methodologies utilized and instead, prioritize the results your clients aim to achieve. For instance, imagine the significant financial gains a company could experience by increasing its executive team’s effectiveness by 25%. By identifying such tangible costs associated with the client’s problem, you can then fix your fees basis the specific outcome or result you intend to deliver.
This approach is commonly referred to as results-based coaching. It aligns the value of your coaching services with the concrete benefits and returns your clients can expect. This approach enables you to demonstrate the measurable impact of your coaching and establish a stronger value proposition for your clients.
4. Consider existing coaching formats & models
When pricing your coaching practice, considering different coaching formats and pricing models can assist you in coming up with a fair and effective pricing structure. You can start by looking at different coaching formats to offer, like 1:1 sessions, group coaching, or online courses. Each format would need different amounts of time, involvement, resources, access & personal attention, and that can factor into how much you need to charge.
Other than formats, you can also explore different pricing models such as charging by the hour, offering package deals, basing fees on the value you provide, or tying fees to specific performance outcomes.
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5. Consider your financial needs
Once you have recognized the value you bring to your clients’ lives, it is equally important to determine your own financial needs and goals. Think about what financial goals will enable you to continue serving your clients without distraction or stress. Balancing the value that you provide with your own financial sustainability & stability will allow you to establish pricing that aligns with you and your goals.
Tonya Echols, the founder of Vigere, encourages this mindful approach to pricing in order to foster a healthy balance between the value you provide vs the financial stability you seek.
Of course, you can use a combination of the above strategies: by aligning the coaching format and pricing model with your expertise, what the market demands, and how valuable you are to your clients, you can set fees that truly reflect the quality of your service while staying competitive and fulfilling your financial needs.
Sources: Luisa Zhou, Forbes, HBR, Inc.
1. How do I plan my coaching fees?
Consider these 5 aspects while planning your coaching fees:
- Your long-term business goals
- The value you provide to your clients (the transformative impact of your coaching’s results)
- The market demand for your offering
- The type and duration of your coaching engagements
- Your financial goals
By balancing these factors, you can arrive at coaching fees that work for both you and your clients.
Simply.Coach is an enterprise-grade coaching software designed to be used by individual coaches and coaching businesses. Trusted by ICF-accredited and EMCC-credentialed coaches worldwide, Simply.Coach is on a mission to elevate the experience and process of coaching with technology-led tools and solutions.