Business of Coaching Series
In the Indian context of pricing Marshall Goldsmith has something interesting to say. He says that on the streets of India, particularly in urban areas, you can get a cup of coffee on the streetside from a thela for roughly INR 20. And if you cross the road, you may find a Starbucks where they’re selling coffee for INR 300. And guess what? There are takers for both in equal measures. So, the market exists for all kinds – and is even growing. It all comes down to being able to communicate the value. Where the thela coffee lures in someone looking for a quick local, inexpensive refresher, the Starbucks sells the ambience that provides for an intimate conversation – an informal official meet or even a date, for instance.
The same principal even applies in online business coaching. There’s a market for different price points – and it comes down to how you’re able to communicate the value.
So, if you’re an online business coach (or any other kind of coach, really) before you go about pricing your services, here are some aspects to factor into your value:
When an online business coach is to be hired, particularly by a corporate, the credentials are going to be an essential aspect of consideration. By credentials I don’t mean just your coaching certifications, but also your expertise and experience (that is relevant to your current role) and your profile in general. A new coach with little past experience, for instance, will never get matched to a client of a senior profile.
So, if you’re an entry level coach, there is only so much you will be able to charge to begin with. For this you will need to assess what is the perceived value of your service for your ideal client.
So, as a coach, you will have to see what you are doing to determine that value for yourself. It always helps to know what coaches of different calibres are charging within your network.
At the end of the day, aside from the objectivity of credentials, a certain subjectivity also comes in as a big factor when looking for the right coach-client partnership. And this is easy to ascertain in a chemistry session – a standard practice in online business coaching. Such a session allows a potential client to connect with the coach a little informally to see if they’d be a good fit. Some things a person may seek when hiring a good online coach is whether they’re comfortable to share aspects of their life/work/business with the coach without hesitation. Another thing is whether or not they’re able to relate to them and believe they can add value to their life.
As coaches you can even recommend your potential clients to have such chemistry sessions with a few other coaches before determining whom to finalise. They can see which approach best suits them, who’s questioning style they relate to. All of this is to help a client determine where they can get the best result for themselves. And it doesn’t mean one coach is bad compared to the other – it just means they should pick one that is best suited to them.
Towards the end of such a chemistry session the question of price may come up. For this, as a coach, you have to see how you can communicate value effectively. This will of course be visible in this chemistry session to some extent, but you will also need to set the ground with your marketing efforts to steadily convey that value to your potential client over a period of time, which is much more reliant than hoping to convert a client in just one session or phone call.
At the end of the day, it is important to remember that clients care more about their results than you or your methodology. All conversations need to clarify what a client wants out of coaching – and for you to demonstrate that you’ll be able to take them there.
So, we’ve been speaking about communicating value and this is perhaps at the core of how to price for your business. Every coach would greatly benefit if they chose to focus on value instead of the number of hours or coaching sessions. Think about the value exchange for the client investing in your online business coaching. If they are going to put in a certain amount of money into getting coached or mentored by you, what kind of return will they be getting? How much of their life/business/career will get impacted? And how much would all that be worth if you were able to quantify it?
For instance, if a client is going for leadership/executive coaching through their company, the company would need to know how they would benefit from investing from their budget into hiring a coach. Let’s say you are a coach who can help the client in such a way that the organisation is able to see 10x the return – in a multitude of ways such as team performance, client servicing, etc. Then you need to set pricing in terms of value instead of hours or sessions and communicate the same in a manner that clears it to the one in charge of hiring you. The same goes for an online business coach – how are you able to communicate the value of another business owner benefiting in their business by hiring you as their coach to help guide them? What is the ROI?
What this essentially entails is that one needs to do sufficient market research to see what is being generally charged by online business coaches who are in a niche/industry similar to yours. For instance, the learning & development team in corporates usually have a budget that is allocated by virtue of levels and more often than not the market determines the average price.
Typically for a senior manager level the cost may be around the INR 5,000-8,000 range. Now, this is just to give you a basic idea about price ranges and not to put you in a box. Having a rough idea about market dynamics ensures that you are not grossly under or overcharging – either of which can work against you in the long run. How much you charge, over & above these factors, then depends on what you’re comfortable charging and how much relevant experience you’ve had before being certified as a coach and the value that you’re able to deliver to the client with your online business coaching.
We hope you found our pointers around pricing your coaching services helpful! What else would you like us to cover in the upcoming posts in the Business of Coaching series? Let us know in the comment section.
- How do I set a starting point for my pricing?
One way to look at this is – think of the package you were earning at your previous job and divide that by 250 days (no of average working days in a year) = that becomes the rate you can charge per hour.
Another aspect is your own experience & knowledge as a coach. And even if you ascertain the correct rate for yourself, you can see if you want to offer a certain discount initially to be able to get more experience.
Also consider the organisation and client’s familiarity with coaching. Put your judgment and see if the senior-most person is involved in coaching and where the organisation’s maturity is when it comes to the coaching culture – those are factors to consider while pricing.
- Should I be factoring in the competition when pricing my coaching sessions?
Yes, but it would be better to do market survey on what is the kind of price a person is willing to pay for similar kind of service that you are offering and then price somewhere in that bracket.
- Can I charge different clients different rates? How do I plan that?
You could, since each and every engagement may be different, as opposed to a product you’re selling. If the effort, time, hours differs between clients, so can your pricing.
- How do I navigate situations where clients negotiate on pricing?
If your client is negotiating on pricing, you may not have been able to articulate the value of coaching you bring to their journey effectively enough. So, think of how you can communicate that effectively.
If you’re convinced of the value you bring, then you have to turn the conversation from it being a cost to the client to showcasing it as an investment they are making for their growth.
Even if you’re able to, they may still come back and say they’re convinced but have a budget to adhere to. Then you need to ask what do you gain from this coaching engagement and what do you lose? Then accordingly take a call.