(This article is written for new Life and Executive Coaches, but the thought process is equally relevant for any profession. The numbers may just be different)
New coaches, consultants and trainers find themselves drained of colour at the thought of having the money conversation.
Several times per year I deliver a workshop on starting a coaching practice and I always ask this direct question; “A client is ready to work with you right now. They are ready to write the cheque. What’s your fee?”. The answers I get ranges from €35 to €1,000.
What would influence that number? Is it driven by what you think your clients would pay? Or is it influenced by what you think you are worth?
Perception of Value
I recall a conversation with a learner some months ago. She had worked as an internal coach in an organisation and now planned to progress on the ICF path by studying with Kingstown College. She told me that her friend had been quoted €75 for a coaching session. “I wouldn’t pay that for coaching!” She exclaimed proudly.
I responded “Based on that, I think you may be quite surprised if I tell you what my fee is!”.
She was.
Anyone for a massage?
There was a simple example I used that shifted her perception of the value of a coaching session. I explained that a coaching session was typically 60-90 minutes in duration. I asked her to quickly Google a hotel spa close to her and find the rate card for a massage of the same duration. She discovered that it would cost €150.
Holding the silence after that proved very effective.
Bottom line; if you’re not bringing more value than a 90 minute massage, then you may need to review your methods as a coach.
You may choose to serve a market that does not have a large budget for coaching (e.g. unemployed or young adults). That’s ok. Set your fees accordingly. But avoid setting a lower fee for a market that needs to see a higher fee in order for you to be an effective coach with a personal brand to match.
How to have that money conversation
You have just completed a great chemistry session with a potential client, they ask you what the cost will be. You begin to stutter. Assuming you could even get that noise out of your mouth! 🙂
Having some go-to responses will ensure that you remain confident and effective in this part of the contracting. Here are some thoughts for you.
Treat it like a coaching conversation: Ask questions.
How about finding out what your client can afford to spend on coaching per month? A better question would be, what can you invest in coaching for yourself each month? With that information you may find that there is a budget for one or two sessions per month. Here’s a related idea; does the client need to pay immediately, or could they pay over a number of months? For example, the client has a budget of EUR 250 per month and that’s your session rate. But they would benefit from the 4 sessions within a two month period. Is there any reason why they can’t have a scheduled bank transfer continue for the following two months to complete the full payment?
Perhaps the issue or the ambition has a value for the client. What financial investment would you make to realise that goal? What financial value would you place on overcoming that issue?
Previous experience may helpful to know. What have you invested in this type of intervention before? Your client may have worked with a psychotherapist or a mentor before and is expecting to pay a substantial fee per session. You won’t know unless you ask.
Accountability is often something that the client wants and needs. What financial investment from you would ensure that you are fully committed and accountable to our work together? To put this another way, if you client thinks that the coaching session is cheap, is there any down side to them just pushing the actions out by another month? Perhaps highlight this to your client as part of your negotiation to boost their commitment to the coaching relationship.
Does your fee allow for discounts?
Clearly the above conversations will help you understand if your client has a budget that is close to your rates. But, when you initially set your rate for a coaching session, do you have the head room to offer a deal if you need to? What if an organisation approaches you with 10 team members for coaching? They will possibly expect to be able to negotiate the fee. If you have set your fee too low, there is no room to negotiate without becoming very busy for a much smaller fee. With experience, you may find yourself setting a non-negotiable fee.
Average fees for coaching
According to ICF surveys, the average fee for a coaching session in the United States is $231 and in Western Europe that lands at $288. New coaches tend to launch at about $120-150 while those with more experience are above $330. The most sought after coaches command a significantly higher fee. This would be reflective of what we see happening in our markets.
POSSIBLY THE MOST IMPORTANT PART FOR YOU TO READ…
Your problem isn’t your problem.
The problem is that you think that’s your problem, and now the problem that you thought was the problem has distracted you from the real problem, and now you have a problem!
Seriously though, which of these is the more accurate description;
- Have you lots of potential clients contacting you and you don’t know how to ask for your fee? Or
- Are you still trying to attract clients to have that conversation in the first place?
If option (A) describes you then this article is really helpful.
If option (B) is closer to reality, then you would dearly love to have the problem addressed in this article!
In that case you need to relieve yourself from the fear of asking for €350 per session and go back 5 steps to think about marketing yourself. And that’s an entirely different conversation.
Don’t let the fear of step 5 stop you from doing the work for step 1.
Let me know your thoughts in the comments, I’d love to hear them!
By Alan Brereton
Alan Brereton is an Executive Coach and Head of Marketing at Kingstown College which is an ICF and EMCC accredited educator. As a coach he works with executives and with coaches who are transitioning from 9-to-5 to self-employed.
