The Great Coaching Rate Debate
There’s an elephant in every room full of coaches. It’s an unspoken question, often looming largest in the minds of those new to the profession. The elephant’s name is “How much should I charge?”
Coaching rates—or fees, if you prefer—vary widely, and opinions on how much a coach should charge vary even more. The incredible disparity in coaching rates confounds new coaches. More importantly, clients are confused as they struggle to identify the correlation between price paid and value received.
As the great coaching debate rages on, certain external factors that profoundly impact the issue are looming larger than ever before. Let’s discuss the factors and potential ICF-led solutions for each.
Factor 1: Coaching is poorly understood
Although certain segments of society, ranging from selected businesses to holistic wellness centers, understand coaching and incorporate it into their operations; the average person on the street often thinks of coaching in terms of sports, the arts or consulting.
Solution: Promote public awareness of “true” coaching: Short of completely rebranding, which is one option, a broad reaching public marketing campaign, sponsored by ICF, could accelerate understanding of what coaching is and is not. Think that a publicity campaign won’t work? Consider the impact of a gecko selling auto insurance or an ice bucket challenge to raise awareness of a terminal disease.
Factor 2: Coaching is a profession with virtually no barriers to entry
Anyone can call him or herself a coach. There is no license or test required. No educational requirement exists. Anyone can enter the coaching business, simply by saying, “Hey—I’m a coach!”
Solution: Promote the value of working with skilled coaches and build pathways to credentialing. In concert with raising public awareness of “real” coaching, promoting an understanding that there are coaches—and then there are true coaches—may help to limit the impact of those who attempt to coach without appropriate preparation. At the same time, ICF can lead the coaching profession to create and promote well defined pathways for the so-called coaches to become true coaches. Helping all coaches get the necessary education for ICF membership and credentialing would be an excellent start to addressing the coaching rate debate.
Factor 3: Coach training is widely varied
Although no training is required to be called a coach, many coach training programs exist. Some are as brief as a day or less while others are robust, intensive university-based programs with rigorous requirements for successful completion. There are also a myriad of programs that fall in between.
Solution: Create an ICF sponsored coach training program comparison tool. Ever try to find credible information to compare coach training programs? It’s easier to comparison shop for a new car! ICF has done an outstanding job in the creation of the Become A Coach microsite, thus the task of expanding the concept to include student reviews of coach training programs and a simple comparison tool doesn’t seem daunting.
Factor 4: Coaching is becoming “commoditized”
David Peterson, director of the internal coaching practice at Google, delivered a compelling message during the 2015 World Business and Executive Coaching Summit (WBECS). There is, he said, “an incredible commoditization of pricing in the mid-range (of coaching). So…for coaches who are competent but not distinctive, there’s a lot of price compression.” This means that the large supply of regular, everyday coaches (those who are not brand name rock stars) is putting downward pressure on coaching rates.
Solution: Execute all of the above strategies. We can’t stop the commoditization of coaching, but we can limit its negative impact by ensuring that those who are recognized as coaches truly are coaches and that the public knows the difference.
Meanwhile, the great coaching rate debate rages on. How much should you charge for your coaching services? Perhaps the answer is as close as your own mirror. Take a good look and ask yourself, “What would I be willing to pay for the value that I know I give to my clients?” Then, set your rate, convey your value and help to promote the many benefits of working with a real coach.
Coach training, like a college degree on almost any subject, still teaches us to be employees. Not business owners or entrepreneurs. Here are a few things to consider that will smooth the road to being a successful coach.
1. Briefly, to decide how to answer your “What Should I Charge Question”, you’ll want to start with
the end in mind… just like you probably tell your clients.
2. Just as the airlines tell you, put the oxygen mask on yourself 1st before trying to help others. To
do this you’ll want to decide how much you need to pay yourself as a salary.
3. You’ll see your income is not your salary. Before you can pay yourself you need to subtract all
your expenses and taxes from your income.
4. Doing this will show you what investment you need to ask for from your clients… so there will be
enough left for your salary so you can coach more and more clients.
For more information and loads of Blogs on this subject go to http://www.BusinessSkillsforCoaches.com. You’ll find out that pricing your coaching services isn’t as complicated as you may think. Actually it’s a fairly intuitive process once someone points you in the right direction.
As a mentor coach, I find the biggest difficulty new coaches face is owning their value. Coaches spend good bank getting their certificate from an ICF accredited school and then they say, now what do i do? There’s a big disparity in coaching fees. As a new coach, you’ve got to master the art and science of a powerful enrollment/selling conversation. Good luck to you all.
There are so many reasons why setting a coaching rate is difficult. I had to wrestle with these factors:
1. In my previous career (speech pathologist), the rates were set for me in the form of a salary. After 25 years of never having to consider what I would charge for my services, I was thrust into that position as a small business owner.
2. Coaching is a helping profession so I had my usual angst about charging someone to help them out.
3. I enjoyed the work so it didn’t feel like work.
4. I didn’t know the market
5. I didn’t know my niche- for multiple reasons.
6. Fear that I would be laughed off the face of the planet if my rate was too high.
7. Fear that I wouldn’t be taken seriously if I charged too little.
That’s a long list, isn’t it? Part of it was getting used to having a business. Part of it was my relationship to money. Part of it was fear.
It took awhile but now I feel comfortable. Some of the breakout speakers at the ICF Midwest conferences were instrumental at helping me answer some of those questions!
Seek information then put yourself out there!
In my opinion, coaches who are mental health professionals are able to charge more based on the related training in mental health. My firm only uses licensed mental health clinicians who are also trained in Emotional Intelligence Assessment and Coaching.
We specialize in coaching physicians in Emotional Intelligence for leadership or impulse control. Both of our coaching programs are for six months and the fee is $5500 when offered at our Los Angeles office or $6500 plus expensive when offered on site. The fees must be paid in advance and there are no refunds.
We use Pre and Post EQ-i-2.0 assessments as well as 360 EQ assessments.
As a starting coach, just having finished an ACTP program in October 2015, I wanted to ‘nail’ this from the start. To all who are struggling, i want to recommend the Coaching Package Power program lead by Jamie Smart, Clarity Coach, which is a 12-week program. Thanks to that, I’ve seen through all my misunderstandings about selling, what money really is, where my security as coach really comes from (hint: it’s not from the money), and much much more, and in a couple of weeks time i went from being comfortable to charge about 70-80 EUR per hour, to actually signing up 3 clients for 6 to 9-month Coaching packages of 2000 EUR. And this is just the start… I know that my fees will increase substantially as i have more & more impact on my clients. To anyone interested, feel free to contact me for more info re. Jamie’s program or reach out to him directly at info@jamiesmart.com
Yes, the age-old question. How much do you charge? In my case, I charge a decent fee that allows me to support a good lifestyle, and the minimum time commitment to work with me is 6 months. I have a lot of expertise in my niche area, a great deal of business experience going back 30+ years, and 11 years of coaching experience. I’ve seen many coaches start out in business and not succeed. IMO, you have to treat coaching as a professional business and charge a decent fee, whatever that is for you.
The simple answer to the pricing dilemma – it depends.
Many of the “it depends” answers are above. Here’s a few more that haven’t been identified yet.
1. When we think of coaching, most people automatically assume individual coaching. Although this is where a bulk of the market resides, coaching also resides outside of this domain. For instance, Group Coaching is growing, and disrupts the time-for-money equation a bit.
2. I propose a “what is the association” question. Here, clients coming through a referral are generally willing to pay more for your coaching service – trust is already baked into the equation.
3. Who is paying the bill? If your clients are individuals their association with money may be different if a corporation was paying the bill. Although if you do work with large organizations, they may also dictate their rates – take or leave it.
Pricing is never easy. Answering “what is a product or service worth” is always challenging. Personally, I’ve worked through 4-pricing models for my Peer Insight program. I think I have it right – but time will tell.
The starting point is to know whom you serve and what solutions—problem or potential—you ameliorate. The market determines what these people pay for your help getting them from point A to point B. When you know what outcomes you create and for whom you create them, it’s easy to determine what the market will pay.
The biggest mistake I see newer coaches making is that they are selling coaching. Coaching is a process, and nobody knows how much a process is worth. However, people can place a value on a promotion or other outcomes.
I work with a lot of coaches to get clear on their value and charge it confidently.
Kind Regards,
Corey
http://www.stanford-coaching.com
Corey, well stated. Thank you for bringing that perspective to the discussion.
yes
It is interesting content
Great article and comments.
Moving from being a ‘I help everyone with everything’ type of coach is the first step to positioning your service as a unique solution for your perfect clients.
It makes everything easier because you can then create your positioning, pricing and programmes from that place of the value your client gets.
I see so many coaches charging by the hour and it’s extremely difficult to create a business or even a well paid job from that place without burning out and being glued to your phone.
The article I wrote for my monthly ICF blog recently gives some tips about premium positioning so you don’t repel those high paying clients.
Hope it helps.
https://coachingfederation.org/blog/index.php/5575/
I’d like to comment about ‘real’ coaching. I think sports coaches are also real, but not all the same as an ICF coach. Our definition is our definition and we can influence the discussion but not own the term coach. I like using the term ICF coach and the concept of explaining what is different about an ICF coach. We can all own what an ICF credentialed coach or ICF member should be (Ethics. competencies, ongoing development, professional affiliation and commitment etc) and the value that can bring in helping clients achieve their goals…and the valuable benefits for them.
I also like the comments above about value based pricing. If you are coaching a CEO and don’t have a suitable charge…you will likely be considered unsuitable to coach at that level. You cant be any good if that’s all you charge ! This is where your niche comes in… if your niche is CEOs in a topic area then you set your rates to that market. If you want to coach struggling small business owners you’ll have another rate structure by necessity.
What I like best about your article, Lil, is that you cut through the bramble of “rate” to the essence of the issue: defining the practice and value of coaching, and how these vary based on the training and expertise of coaches. Until the coaching practice is better distinguished from consulting and training, and until the competency levels of practitioners are more transparent to consumers, no standardization of rates can occur. I also like your ideas for how to accomplish those changes.
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