MM #77: How to Set a Competitive Fee for Your Coaching
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2. FEATURE: How to Set a Competitive Fee for Your Coaching
Many service professionals are uncomfortable putting a dollar figure on the work they do. There’s a fine line between pricing yourself out of your market – and selling yourself short. You can hear me coaching on this very topic in “Explode Your Practice.” Here’s a quick summary that will help you find the right balance.
Your clients look to you for initial clues about the value of your services. If you give them the idea that it’s worth $50 per month, that’s how they’ll treat it. On the other hand, if your initial clue tells them your services are worth $1,000 per month, you may hit some resistance. They might think of other things in their life with a comparative cost, and say, “Hang on, how can that be?”
You may need to create a shift in their thinking and you may need to target a market that is certain to have the money. Some people easily spend thousands of dollars for a holiday, or for a high-profile course – they can also afford it for coaching if it’s positioned correctly.
Naming Your Price
An average price for coaching seems to be $300-500 per month. If you back your services with a money-back guarantee, you will have a better chance of charging this or higher. (The drawback, however, is that your client’s commitment may be lower now that they have a backdoor if things don’t work out).
I started coaching at AU$250, which is about US$210. I later raised it to AU$300, where I stayed for a long time, scared to go higher. When I finally decided to go to $400, I had a lot of clients so I went ahead. They didn’t blink, because $300 is still a lot of money for some people. The difference between $300 and $400 wasn’t as big as I had expected.
When I went from $400 to $550, I was again surprised when people responded with, “Okay, that’s what it costs.”
You have to get your clients to consider the results. For instance, I had a client – a manager – who had taken dramatic steps forward inside herself. She was finally starting to say no, to take some time off, to find her peace. What’s that worth? What was it worth to her employer, who was picking up the tab, to keep a valuable employee? Suddenly $2,000 doesn’t seem so outrageous.
Now I’m at the point where I need to screen out clients – and setting my fee high helps to do that. What if you’re not quite there?
Here’s an example: Say you’ve decided on a fee of $300 per month. Tell clients if they pay three months in advance, you’ll charge just $200 per month – a total of $600. It’s like they are getting a month for free. Taking it further, you can charge $175 per month if they pay six months in advance.
Unless you are screening out clients, you probably shouldn’t post a monthly cost of $300 on your site. With a pre-pay discount, however, you can say, “My prices range from $150-300 per month. Contact me for details.”
Collect Up Front
Assume that your clients will want to pay up front. If they ask about a month-to-month plan, you can be agreeable but explain that system is more expensive. By preferring up-front payments, you are supporting your clients by making sure they follow through. If they just don’t go for that, THEN you can offer a lower trial rate – in this example, $200 – for the first month, with the expectation of a three-month contract if all goes well.
As a higher-end coach, I let people know there are cheaper coaches. One of my clients pays month to month because that’s all she can afford at one time. I’ve encouraged her to consider someone less expensive, and she said, “You know what? I want to keep going with you. My guess is that you pay for what you get. By paying this amount of money, I know I’ll take it seriously.”
Resistance
If a potential client says coaching seems expensive, ask, “What’s it worth to you to achieve this goal? What’s it worth to you to have these changes in your life? Are you ready to commit to having these goals?”
And: “What’s the cost of NOT working with me?”
Once they have made that commitment internally, you should have a client.
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Action: What are your services worth?
- Decide on a flat fee structure. For example, one month (3 sessions) for $400. What feels right to you? How many sessions? How much?
- Now, what kind of discount will you offer to clients who pay 3 months up front? Six months? Or is there another pre-pay structure that works better for you? (For instance, 9 months if you are working around a school year.)
- Post what you plan on doing at the blog then check back in there with your results.
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