Most Coaches Use The Wrong Pricing Strategy, How To Know What You're Worth In A Few Questions
What do you charge? For many coaches, this is the hardest decision to make. If you go too low, consumers may not take your service seriously. Of course, if you charge too little, you’ll likely be met with suspicion instead of clients. On the other hand, if you price too high, you risk pricing yourself right out of business.
What to charge for your coaching and level of personal service makes most fitness and lifestyle, business and every other type of coach anxious. My point is that pricing related stress doesn’t discriminate.
So, what’s the formula? Well, there isn’t one. You’ve got to consider everything from your competition, your expertise, client base (buyer persona), cost of materials and value your service adds to every client.
How does one quantify so many things at once?
Coaching is a unique industry – it’s a calling in a sense. Unlike the restaurant industry, for example, where you calculate your total cost on that Chicken Alfredo and add the industry standard 65%. New industry means new methodologies for almost everything.
Now you can apply some quick basic math to find out your preferred optimal but not necessarily doable (at first) hourly rate. You can do this by taking the salary you’d like to make and dividing by the number of hours you’re willing to work each day. Don’t forget to include weekends off and a few free weeks throughout the year.
Whatever number you got is your preferred hourly rate. But keep in mind that’s your goal, which is not often attainable right away.
At the very least, you have your starting number to consider.
What Does Your Competition Charge?
As most coaches and providers don’t publicly disclose their rates and some wrap them up into flashy packages, you’re going to need to get discreetly sneaky. Here’s a few discreet methods you may consider:
- Join their newsletters (you should do this anyway, as they are your competition).
- Subscribe to their social media.
- Examine every inch of their websites.
- Get involved in their fan base and ask a few organic questions.
In time if you put in the effort you’ll be able to figure out their pricing.
Here’s the tricky part because to do this next step you need to be brutally honest with yourself. You need to know your actual competition – not who you would like to believe is your competition. If you’re first starting out, you can’t compare yourself with the coach who has sold two million books and has over 800,000 followers on social media. That person is your goal, but not your present competitor.
You need to take into consideration things like your experience, expertise, track record, success history, following and skill set. Find a few coaches that match up with your current situation – they are your direct competitors.
What Are Your Credentials and Skills?
Basically, what do you bring to the table, and how much value do you provide to your clientele? In many specialties and fields, this can be easy to determine. Some specialities have certifications and licenses that carry a preconceived and widely understood rate class. If you’re a one-on-one nutritionist with certifications for specific types of diets, you’ll clearly charge more than a general nutritionist. The same holds true for personal trainers, business and financial advisers and lifestyle coaches.
If you’re entering or already in a niche that doesn’t have certifications or licenses, this step gets a bit tricky but not impossible.
Write up your skill list, you can use the following guidelines:
- Do you have satisfied former clients who have (or could be persuaded) to give you testimonials and/or case studies?
- Have any of your former clients moved up to better known or more qualified coaches after working with you? At first this sounds like a negative, but in truth it makes you look great and proves your value.
- How long have you legitimately spent learning your skills and building your expertise?
- Have you written any published long-form articles or sold any books or ebooks?
Do You Know Your Market?
As any economics 101 student will tell you, the price of a service is created in the magic space of what the buyer is willing to pay, and the seller is willing to accept. If you’re first starting out, and you don’t have a track record of happy clients don’t price yourself out of your market.
If you’re still fresh in the niche, you’re not going to get top-tier clients willing to pay you $500 an hour. You’re simply not at that level just yet. It’s important to stay reasonable, you can always raise your rates if you feel you’ve underpriced your services and time.
If you’re new to this business, you’re most likely targeting newbies. That’s great, as they need direction and guidance as well, and everyone must begin somewhere. Tony Robbins didn’t start out lecturing in stadiums.
If you’re already established and have a strong portfolio of successful clients, you can and must charge a higher fee for your services. A financially higher demographic expects to pay a premium for premium service, and that goes well beyond coaching – that’s any product from clothing to honey.
Always keep in mind that your pricing isn’t concrete. It can adapt and flex based on your clients, commitments and what you want out of life. As you begin to find more and more success as a coach and discover yourself in demand, your pricing should increase. If you’re struggling to attract new clients, you’ll want to reduce your pricing to fill your schedule and earn more testimonials and case studies. More successful and satisfied clients means you can raise your rates.
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