Setting Your Coaching Fees

One of the most common questions I get from new coaches is “How do I set my fees?” While this is not an exact science and is a judgment call only you can make, here’s some ideas and guidelines for setting your fees I’ve put together from twenty years of training and mentoring relationship coaches.

  1. Practice clients

When you’re in training you need to coach “real” clients to develop your skills, and practicing with your fellow trainees is not enough. We suggest being honest with the people in your network that you’re in training to become a coach and need practice clients; you’ll be amazed at how supportive they can be. Be sure to ask for referrals. This important activity, by itself, can launch your new coaching business.

Practice clients are usually free, but we highly recommend creating a formal coaching relationship using your Coaching Agreement, etc., that includes the following-

  • Full disclosure that you’re a coach in training
  • Permission to record sessions for instructor/mentor feedback
  • Duration of free service (we suggest maximum 3 months, converting to discounted service if they wish to continue)
  • Agreement that client will provide a testimonial if satisfied with the results of your coaching
  • Agreement that client will provide a referral if satisfied with the results of your coaching

 

  1. Discounted fees

Discounting your fees is only appropriate when you’re starting out during the short transition from free practice clients to paid clients, typically no more than 3 months. After that, do NOT be tempted to discount your fees to get clients because you don’t believe they can or will pay your full fee, this is a self-fulfilling prophecy that prevents you from having a successful coaching practice, and is a disservice to your clients because their results are directly proportional to their investment. If you lower your fees to what they think they can “afford,” you are sabotaging their results. If they strongly want to work with you, you strongly want to work with them, and they truly, truly, truly can’t afford your full fee, consider Pro Bono instead (see below).

Some guidelines for discounting your fees-

  • Only during transition from practice clients to fee clients to get your practice started, no longer than 3 months
  • Limit duration of discounted service , we suggest maximum 3 months, converting to full fee service if they wish to continue
  • Agreement that client will provide a testimonial if satisfied with the results of your coaching
  • Agreement that client will provide a referral if satisfied with the results of your coaching

 

  1. Pro bono

Here’s a radical idea- instead of discounting your fees, just GIVE AWAY your services!

We’re serious. Do you WANT to discount your fees? Wouldn’t you rather have your clients value your services enough to stretch to pay your full fee? Discounting your fees devalues your services and impacts your relationship with your client. Do you feel differently about your discounted clients than your full fee clients? You know you do.

It’s common for people who say they can’t afford your full fee to have no problem paying for expensive cars, vacations, etc. If they truly are living at the poverty line there are government and non-profit alternatives. YOU are not a non-profit so don’t act like one.

It’s also common for motivated clients who really want to work with you but can’t afford it to find a way, most commonly getting financial help from a friend or family member. People don’t like asking for help, which is understandable, but YOU shouldn’t take the hit because they don’t want to reach out to their support system.

Here’s an alternative for those prospective clients who say they can’t afford your full fee-

“I have a busy practice and don’t discount my fees, however, if you’d like to work with me and truly can’t afford it I do have a few pro bono slots in my practice. The waiting list is about six months at this time. Would you like an application?”

Often, the prospective client would rather not “apply” and wait six months, and will decide to either work with you at your full fee or move on to another practitioner who will haggle fees with them. If they truly want to work with you and can’t afford your fees and apply for a pro bono slot, you’ve got a motivated client who will be gratifying to work with.

Some guidelines for this to work:

  • Don’t discount your fees, ever.
  • Do have two pro bono slots and let your referral sources know (you’ll get a lot of goodwill AND referrals, far better results than by discounting your fees)
  • Have a written agreement/contract with your pro bono clients
  • Make your pro bono services time limited- maximum 90 days/3 months
  • Reserve pro bono slots for truly urgent cases, not mild or “maintenance” cases
  • In your written agreement require they give back in some way- testimonial (if appropriate), referral, etc.
  • After 90 days if they wish to continue working with you require they pay full fee
  1. Individual Coaching Fees

Setting your fees for individual coaching is a decision unique to you and your business. I can’t provide you a number but here are some considerations:

  • Don’t set your fees based upon your comfort level, what YOU would pay, or what YOU could afford. Try this exercise- Come up with a number that YOU would feel comfortable charging, double it, and chances are that should be your fee.
  • Don’t set your fees based upon “the competition” as you have no competition. If you’ve selected a specialty and niche and designed your coaching services to effectively serve your niche, your clients can only get what they need from you. Even if a few other coaches in the world have the exact same specialty and target audience, your marketing brings you potential clients for your coaching business and they won’t know about any others that you consider “competition.”
  • Keep in mind that your clients results will be directly proportional to their investment, and the more they stretch to pay your fee the more motivated they will be to follow through and get results. Charge enough to support their success.
  • “Sell Programs Not Sessions:” do NOT accept clients for one session at a time, do NOT have or publish an hourly rate for your coaching, instead, market a branded program to your niche, minimum 3 months, that has a bit of structure and specific benefits and deliverables.
  • Coaching Packages- Instead of selling your services by the hour or by the month, provide coaching packages bundling your services to be most effective. Be sure you have a minimum duration required to be effective, we suggest 3 months.
  • Provide fee options such as monthly payments, single payment up front (with full pay discount), discount for cash/check/eft (passing along savings from transaction charges) and perhaps a Fast Action Bonus (discount for enrolling with you during strategy session).
  • Provide payment options such as credit cards, paypal, etc. Also consider EFT solution such as Veem.com (best deal for same currency transfers) or Xoom.com (best deal for international transfers).
  • Lastly, we would be remiss if we didn’t remind you to raise your fees annually. Select a date every year and set a new higher rate for your coaching services. Costs always increase and your fees should as well, otherwise you can find yourself many years down the road charging the exact same fee from when you started.

 

  1. Group Coaching Fees

In today’s world we have a variety of group options in addition to meeting in person with your group each week, including online programs that provide a range of possibilities for your direct involvement with the client. In general, your group fee should reflect the following:

  • How much of your time is involved
  • Meeting in person, on conference line, or online
  • Marketing oriented group to attract potential clients vs. actual coaching group
  • Client agenda focused group (general coaching) or group focused on particular goal/result, such as for your coaching program
  • Packaging the group with your program and/or individual services means you wouldn’t charge individually for the group
  • In the old days a guideline I used was ¾ of your individual monthly fee for a weekly group. So if your individual fee is $500.00 your group fee might be around $375.00.

 

  1. Workshops and classes

In general, there are two types of workshops and classes you might conduct for your niche – marketing oriented to create clients, and coaching oriented as part of your coaching program or package. If you are conducting a coaching oriented workshop or class you would not charge your clients extra, it would be included in your services to them. For marketing purposes your goal is to fill seats with motivated potential clients and need to find the sweet spot between charging too little and charging too much. If you charge too little they won’t value the experience as much and less likely to take the next step and hire you. If you charge too much you will drive away potential clients and greatly diminish profitability- typically the profit is in your full fee services, not in workshops unless you have a large audience.

 

  1. Products

Typically, products such as books, ebooks, audio programs, video programs, online courses, etc. are low cost ways to reach your potential clients and your goal is to make them an easy buying decision. A good strategy is to have a “retail” price and a “discount” price available for a limited time. Your online course might be $375.00 retail on your website, and you conduct occasional promotions for $95.00. And typically you would gift your clients with your products and invite them to share with their friends and family.

 

  1. VIP Days and Retreats

Again, there are two types of these events, marketing oriented (to create clients) and coaching oriented (to serve your clients). Coaching oriented VIP days and retreats are typically high touch/high cost, included in your highest coaching package or charged separately from your coaching services. Marketing oriented VIP days still require a significant investment, but typically can include follow up support, so really you are creating a client. Marketing oriented retreats require charging enough to offset your costs and to infer value, and are best offered when you have a solid plan for enrolling participants into your coaching program. VIP days and retreats can be any structure and timeline, from many days to a few hours. For example you can conduct a ½ day retreat by conference call, or a two-hour “Get It Done” VIP day, both of which can be offered affordably and still be profitable for you.