When figuring coaching fees, it is easy to think that price is the basis your prospective client uses in selecting you as their coach. If the prospect pushes back and says “your fees are too high” it is tempting to just lower your proposed fees to get the engagement. Don’t do it. Don’t think of your coaching as a commodity. That is the easiest way to go broke in coaching.
What’s a Commodity, and Why You Don’t Want to Be One
Webster’s defines a commodity as “a good or service whose wide availability typically leads to smaller profit margins.” Commodities of a particular type, crude oil versus winter wheat for example, are distinguished only on price. If you compete solely based on the size of your coaching fees, you are treating your coaching as a commodity. And since there is always someone willing to settle for lower margins, you have decided to go broke as a coach.
The Impact You Have on Your Client Determines the Worth of Your Coaching
The true worth of your coaching is determined by your client and the impact that your coaching has on them. For example, let’s say you have two clients. The first makes $250,000 per year. The second makes $25,000 per year. Through your coaching, each client increases their income by 10%. Your coaching is worth ten times more to the first client than to the second. Now you can set any particular coaching fee based on a fixed hourly rate, on a percent of increase in client income, or you can give your services away, but your coaching services are not a commodity.
Prospective Clients Actually Judge Your Quality Based on Your Coaching Fees
People often judge the value of something based on its price. This is true of fashion and automobiles, and it is also true of services like coaching. Ironically, a client may actually be more motivated to follow your coaching and get better results, simply because your coaching fees are higher, and they want to make sure that they get their money’s worth.
So the next time you are tempted to lower you fees just to get a coaching engagement, don’t!
JTS Advisors Strategy and Accountability Coach