The following is taken from David’s interview with Philip Cohen in 10 Super Coaches.
What advice would you give coaches about charging clients?
Often new coaches undervalue their services. I believe in charging clients what you are worth. However, when starting a coaching business, there are two reasons to have clients: to make money and to have someone who can help you expand your skills. I like the idea of having a set fee and being willing to reduce it for a period of time to make it easy for someone to become a client. As they work with you, they will see your value and be willing to pay more.
The following is taken from David’s interview with Ernest F. Oriente in 10 Super Coaches.
What advice would you give coaches about charging clients?
A couple of pieces, number one: my observation, pricing is in your mind in terms of what you’re comfortable with or not in terms of your fees, so there’s a hurdle for coaches to understand about what their value is that they bring to an organization.
Number two, it is important to raise fees on a consistent and regular basis, although I make the distinction that I still have clients from 1995 and 1996 that I have never increased their fees. I only increase the fees to the new clients who are coming in.
The following is an excerpt of one of David’s coaching sessions in Top Coaching Techniques.
David: Think of the cost of them not getting their stuff right. The cost is unbelievable. You probably use that in your sales, but whatever they’re paying is worth it, because the cost of them not getting their stuff right is astronomical.
Client: It’s significantly more. This is why the top executive search firms charge about 33% of salary and we charge 12½ to 15%.
David: Why is that?
Client: Good question. It’s like selling Porsche or Rolls Royce. They have absolute market reputation and they’re dealing with the organizations that can afford to pay that. However, we were a long way from there, so we started at 12% so we could be competitive and get in the door. Raising the price to 15% was the easiest thing I ever did. No one even said anything, and it gave us a massive increase in profits. The reason we do 12½ is because we realize that there’s some value in customers who work with us exclusively, so we give a discount and some other benefits.
David: Imagine if you charged 18 and discount to 15 or 12½. You have just created a bigger discount, a bigger value for them. Then they’ll be saying, ‘Wow, I can get 5 ½ percent.’
The following is a transcription taken from Explode Your Practice.
David: See, what I’m learning about pricing is that you really get, people are looking to you for initial clues on what the value is.
Right.
David: Now if you give them an initial clue that this is worth about $50.00 a month then that’s how they’re going to treat it. If you give them initial clues that this is worth $1,000 a month, you may hit resistance when they look at other things in their life that they compare it to and they go hang on how can that be. So you may need to create a shift in them and you may need to set a certain target market to make sure they’ve got the money to make it easier. But you know, people can pay a thousand a month, and they do for certain things. It might be a holiday or it might be for a Tony Robbins course because it sounds so good.
The following is taken from David’s interview in 10 Super Coaches.
What did you charge your initial clients?
My first ever paying client I charged Australian $25 a week. If you were going to translate that to US dollars it would be pretty similar, you might charge US $20 dollars a week or even $25. (I’m not talking about straight conversion, but I think that would be appropriate).
Then I started saying that my regular fee was $250 a month, and the first couple of people that came in, I said, “Look, this is what I charge, but I’d be happy to do you for half of that fee” and they were thrilled to be working with me for what they saw as half price.
The following is taken from David’s interview with Anna Dargitz in 10 Super Coaches.
Approximately how long did it take you to generate US$30,000 pa in coaching revenue?
4.5 years…If I knew then what I know now, it would have taken half the time.
Over this period, on average how many days per week were dedicated to coaching?
Each year brought increasing responsibilities and opportunities. I worked on creating client programs when I wasn’t coaching and was available four days a week, three weeks a month.
But it wasn’t until I began teleclass teaching and working with SOC about 18 months ago, that I obtained high visibility and my practice really accelerated. Last month I cleared $5,000.00 US dollars and I worked 5-6 days a week. Passive revenue from client programs hasn’t kicked in yet and that’s what is needed to make more and work less.
