The Fairest Approach to Executive Coaching Fees

When it comes to executive coaching fees, there are a lot of approaches. So much for a session. So much per hour. And something called the value-based approach. There are some pros and cons, but if done right, I believe that using value-based fees can be the fairest approach. Besides, it puts your wallet where your mouth is!

Executive Coaching Fees
Executive Coaching Fees

How Do Value-Based Fees Work

Whether with executive coaching fees, consulting fees, commissions or royalties, the idea behind value-based fees is to tie the money you are paid to the value you deliver to your client. Sounds reasonable, right? I am not saying that this approach will work with everyone. It won’t. But it can work well with executives. The reason is that executives think in terms of investments, return on investments (ROI), and value. This is also the way they structure their own compensation. Trust me; no executive with a compensation plan composed of salary, bonuses and stock options potentially amounting to millions of dollars, would have a problem working with a coach compensated in a similar way. If you want to coach a true executive, they need to view you as a peer, and structuring your compensation this way is a step in that direction.

Some Negatives of Value-Based Compensation

There are basically three concerns with value-based pricing, particularly with coaching fees. First, how do you measure the value delivered? Second, how much control do you actually have over the outcome? And third, do you have to wait until the end of the program to get compensated? The solutions to these concerns lie in using value-based fees with the right type of client, planning the engagement properly, and structuring your agreement appropriately.

Success with Value-Based Executive Coaching Fees

First as I indicated above, a big part of success with value-based executive coaching fees hinges on using it with the right type of client. If they don’t think in terms of ROI and value, consider a more conventional approach. This is why I have spoken about this form of fee structure in terms of executive coaching. Second, it is critical that you cast your work as part of a project that will deliver a real return, based on a real investment. Negotiate the return of the undertaking, with and without our coaching. This may be a new way for you to think, but it is THE way executives think. Finally once you have this number, negotiate a percentage of that difference that would be fair compensation for your effort. Really tie this down. Go for a conservative percentage. Remember a small percentage of a large number can still be a big number to you. Then help your client understand that much of the success of the project rests on them, not on you. And because of this, you should be paid so long as you deliver your part of the project. Once you get to this point, insist that you receive half of our fee upon signing the agreement and the second half thirty days later. And if you are dealing with the right client, and if you do a good job, you will have successfully implemented value-based executive coaching fees.

To learn more about how to generate an endless wave of high paying coaching clients, get your FREE Instant Access to our “Life Coaching Business Blueprint”video toolkit when you go  HERE.

Dave Iuppa
JTS Advisors Strategy and Accountability Coach

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