Well, hello again, my friend. I'm so happy that you're joining me for another episode of the Coach with Clarity podcast. My name is Lee Chaix McDonough, and we are continuing the Getting Started series with a topic that I know many of you have questions about, and so I am thrilled to dive deep into how to price your coaching offer. So today, we are going to be looking at what goes into setting your rates and what you need to consider when you are setting your prices for your coaching offer. Now in last week's episode, we did a deep dive into Creating and Conceptualizing Your Coaching Offer. So if you missed that episode, you may wanna go back one, take a listen, and then come back. Start this episode right from the top because now we are going into how to price that offer that we created together last week. So I want to talk about 3 important aspects when considering how to price your offer. So today, we are gonna look at, number one, whether you should price your offer as a package price or if you should use a pay as you go approach. Secondly, we are going to look at whether or not you should offer an installment plan or a payment structure for your coaching offer. And then finally, we are going to look into exactly what you need to take into account when you are setting your rates. So those are 3 big things we're gonna tackle today. We're gonna look at whether you should do package pricing or pay as you go. We are going to talk about payment structures and installments, and we are really gonna get clear on what you need to consider when setting your rates. So if you're ready, let's do this. 

So let's start with that first topic, whether you should have a package price for your offer or whether you should allow your clients to pay for each session as they hold it with you, so a pay as you go approach. Now first and foremost, I want you to know that you need to choose a strategy that works best for you, for your business, and for your clients. I have a strong preference between the 2 options, which will become clear as we talk about it. But at the end of the day, you are the CEO of your business, and so you need to make the decisions that are going to support your business structure, your clients, and your lifestyle. So I do wanna say that I don't think that there is a right or wrong answer to this question. I think what you choose will depend on your business' unique needs, your clients' needs, and ultimately what is going to serve everyone best at the end of the day. And in my business, what I found was that package pricing was the way to go, and I wanna share a story with you to explain why I came to that conclusion and why it is the approach that I recommend for the vast majority of my clients.

When I was first starting out as a coach, so this was probably back in 2016. I was working with a client that I absolutely adored. He was one of my very first clients, we did some extraordinary work together. But because he was one of my first clients and because I was coming from the world of therapy where you typically charged for each session as you held it. He and I had created a pay as you go arrangement. So at the end of every single session. He would pay my rate, and we would schedule our next session, and we would do it all again the next time. And as much as I enjoyed working with him and as much as he enjoyed working with me and I knew he was getting benefit from our sessions, I also knew that he was not creating the change in his business or in his life as quickly as he wanted to, and those shifts were just taking longer to happen, and I couldn't really put my finger on it until I worked through it with my own coach. And she made the suggestion, and it felt really radical at the time. But she strongly advised me to move him away from a pay as you go approach and into a coaching package. So instead of having kind of session after session with no clear end date to the relationship. Instead, I would engage him in a conversation and get really clear on what his goals are for the coaching relationship, what an appropriate time line would be to achieve those goals, and then create a coaching structure and a payment structure in support of those goals and that timeline. Now I'll be honest with you. I was skeptical, and I was scared. I did not look forward to holding this conversation with a client with whom I'd been working for months and had what felt like a really strong relationship. I was afraid that he would object to switching from pay as you go to package pricing. I thought maybe he would think I was greedy or self serving or that I didn't have his interest at heart. And all of those fears were perfectly understandable, and I worked through them with my own coach and realized that there were advantages to moving him towards a package plan. It provided more structure. It provided more accountability. We knew what we were working on in a defined period of time, and it would allow us to have the discussion about payment once and then move forward. It wouldn't be something we were revisiting session after session after session. So I scheduled some extra time at the end of our next coaching session and let him know that I wanted to talk about some shifts that I was making in my business and how that would affect our work together. And so at the end of the session, I explained that I was moving away from a pay as you go approach and towards package pricing. And I walked him through what that would look like and placed it in the context of his business goals, his vision for his life and how it could ultimately serve him. And it was a difficult but necessary conversation. I think it was hard for both of us because naturally, he wanted to continue working with me, and he understood the logic behind making that switch. But anytime we ask a client to make a substantial financial investment in themselves, it's more than just about the money. It's also about their faith and their process and in themselves and if they are willing to invest in their own development at that level. And he had a lot of fear about whether he could make this work. 

So, actually, it became a great opportunity to do some deep coaching around this issue. And at the end of that session, he agreed to move forward with me for a 6 month period of time at a set package price. And, actually, he paid in full at the end of that session. So here's where it gets really interesting. We had scheduled our next coaching session for 2 weeks later. We were gonna start our brand new package 2 weeks later. He got more accomplished in the 2 weeks between our pay as you go session and the start of our coaching package than he had achieved in the months that we had worked together. It was extraordinary to see the action that he took and the changes that he made just in those 2 weeks. And then the momentum that that created allowed him to create even more change over the next 6 months of our coaching relationship. I was blown away, and so was he. And what we realized was that when he invested financially, not just in coaching, but in himself, when he had his money on the line, he was much more energetically engaged in the coaching process. He was literally bought in to the process, and he was willing to do whatever it took to ensure that he got that return on his investment. So he was taking stronger action, he was taking it more frequently, and he was creating the change that he wanted. And, of course, some of the actions that he took didn't necessarily work out as he planned, and we needed to go back and tweak some things. But even with those, he was constantly moving forward. He was constantly making progress. And moving him from a pay as you go approach to a package approach actually improved his outcome. It allowed him to create more powerful results than he had been up to that point. So that was an extraordinary shift for me to witness, and I realized that moving to a package pricing model was not just about serving my needs and my business, but it also had a powerfully positive impact for my clients’ as well. It also meant that talking about finances was a onetime conversation that we had in the lead up to agreeing to a 6 month relationship it. As opposed to taking up time at every session to go over the rate and take payment and all of that. No, we did it once, and then that freed us up in terms of time and mental energy, and we did not have to have that conversation again until the end of the coaching package where we explored whether we wanted to continue working together or not. So moving to package pricing actually saved us time and energy, and we were able to devote the entirety of our session to coaching, and we didn't have to worry about the logistics of payment. 

And then also what I noticed was that when I moved to a package pricing model, it did lead to these little influxes in revenue in my business. And those influxes allowed me then to turn around and invest in my business in different ways. I was able to really dive into my own coaching. I was able to add some additional structure and services to my business that ultimately strengthened it, which then in turn allowed me to turn around and serve my clients even more powerfully. So by moving to package pricing, yes, I was bringing a larger revenue in at one time, which I was then able to turn around and invest so that my clients benefited, my business benefited, and I benefited too. So I hope that in sharing this story of transitioning one of my earliest clients from pay as you go to package pricing demonstrates the real advantages to taking a package pricing approach to coaching. You may find that with your clients or with your niche, a package model isn’t as effective and if that's the case, then you certainly can continue with the pay as you go approach. But I would strongly encourage you to consider the benefits of package pricing, not just for your business, but also how it could potentially empower your clients to create deeper, sustainable change in a faster period of time because, ultimately, that was the biggest takeaway I had from my transition to package pricing. 

Now when we are talking about package pricing, we are talking about a larger initial investment. And so that brings me to the 2nd point I wanted to talk about today was whether you should offer a payment plan or offer installment payments for your coaching packages, and I definitely have a lot of thoughts on that. First though, I wanna clarify that I am talking about this in the context of individual or private coaching. For courses, memberships, group programs, a payment structure may look a little different. So I wanna talk about this today strictly in terms of individual coaching, whether you should offer a payment plan and if you do, what that payment plan should look like. In my business, I have found that for short term or single session offers, payment plans are not advisable. One of the things I offer in my private coaching practice is a half day deep dive intensive. It is a fantastic opportunity for my client and for me to really dig into their business, to get clear on their business values and their vision, to set some clear goals, and to create an action plan that my client can then go implement. Those intensives are extraordinary. And generally speaking, they're 3 and a half hours on a given day. Sometimes we'll break them up into 2 different sessions, and then I meet with them 2 weeks after for a 45 minute follow-up session to make sure that the plan we've created is working well for them. And if we need to make any tweaks or incorporate anything new, we have time built in to do so. But for the most part, we are doing the bulk of our work together in 1 extended session. For something like that, I don't find that paying over time serves the client well because then they've had the session that they're continuing to pay for after the fact, and energetically, that just doesn't always feel very good. And for my business, it's not something that helps me sustain the revenue and the momentum I need as well. So what I generally do for those sessions is that I require a nonrefundable deposit to hold the slot, and then the remaining balance is due 2 business days prior to our session. So the balance is paid in full before we have our session. That has worked very well for me. It's also worked very well with my clients, and it allows us to show up and focus deeply on their business during the time of our session. I use a similar strategy when I am conducting other short term offers for my clients. And in my case, short term is generally 3 months or less. So if a client is working for with me for 3 months or less, then again, they pay a deposit, a nonrefundable deposit, to hold the slot. And then the package price is due in its entirety 2 business days before we have our 1st session together. 

Now if I'm working with a client for a longer period of time, and typically I work with my private coaching clients for 6 months, I may offer a payment structure, and I wanna share the structure I use. It was initially taught to me by my very first business coach. It was the structure that I used with her, and it's one that I now use with my clients and recommend that my own clients use with their coaching clients as well. When I take on a new client for 6 months, I require that 50% of my rate be paid 2 business days prior to our launch session. So, half of the package price has been paid when we start coaching together. Then an additional 25% is due 6 weeks after our launch session, and the remaining 25% is due 12 weeks after the launch session. So what this means is that the client of has 3 months over which they can stretch out the payments, but they are paid in full by the halfway point of our coaching package. Energetically that serves them well, it serves me well. It allows me to provide them with some flexibility while still ensuring that I'm having regular revenue come into my business. It really does create a win-win for everyone involved. And, again, some of my clients want to just pay the entire balance in full at the start, and that's certainly an acceptable approach. But for my clients for whom that's difficult or not possible, being able to offer them a payment structure and to give them that flexibility allows me to meet them where they are. So, again, we have that conversation at the very start. We're clear about what the dates are when the additional payments are due. I have an invoicing system so that they receive invoices before those next payments are due. And by automating it, it just makes it so easy. We have that 1 conversation at the beginning, and then the client knows what's expected. And so when that invoice comes, they know, “Oh, right. It's 6 weeks, time for that 25% payment.” So that is what has worked very well for me in my business. I really credit my original coach with providing me with that option, and it's what I share with my own clients when they're asking me how to set a payment structure. Now if you are not working with your clients for an extended period of time, if instead of 6 month contracts, you are creating 3 month contracts. You absolutely can apply this to your own rates. In your case, maybe it would look like 50% at the start and 50% at the 6 week mark. You can have some flexibility here with your clients. Again, what you want to do is create a system that is going to serve both of you. I know some clients who have monthly rates. So every month, their client is billed the exact same amount for the duration of the coaching relationship. That's actually something my coach does with me. And for some of my clients who have transitioned away from a full coaching package and into one of my retainer programs, that's also an option that I offer for them. So, again, monthly may work for your business as well. There's no right or wrong answer here. With pricing, there is no one right or one only way to do this. At the end of the day, it comes down to what serves your clients, what serves your business and what serves you. So I hope you will take all of my guidance and my experiences and my stories and use them not as the gospel that you need to follow, but as inspiration for how you can create structures in your business that will allow you to create a strong, sustainable business while providing powerful coaching for your clients. 

Okay. So we have covered package pricing versus pay as you go pricing. We have talked about if and when to create a payment plan or an installment plan for your clients. Now let's talk about how to set your rates. And I wanna talk about a couple things that I see particularly newer coaches do when they are setting their rates. Some coaches are exclusively market driven. And by that, I mean, they are looking at what their competitors are charging in a similar niche or for a similar audience, and they are using that information and only that information to dictate their rates. So for example, if they are a health coach and they know that other health coaches in the area are charging anywhere from $100 to $200 an hour for coaching, then they're setting their rate at $150. That's the average, and that's what's going to work for them. So I see some coaches determining their rates only based on what other people are charging. Then on the flip side, I see some coaches who are creating their rates around their own self worth, and this works both ways. I see some coaches who really undervalue, the power of their coaching. They think because they're too new or because they have limited experience or they don't have a huge following, then that means that they can't charge a premium rate. Then on the other hand, I see some coaches who are advocating to charge what you're worth. And I have to tell you that phrase, “Charge what you're worth,” drives me bonkers because my worthiness is not connected to my coaching rates. I am worth so much more than any monetary value. So for me to charge what I'm worth, it doesn't even make sense because my worth is not defined or dictated by money. So this idea of charging what you're worth, I just think is vague and unhelpful and just perpetuates the idea that we are as good as what we do or what we produce, and I reject that concept wholeheartedly. There is so much more to you then what you do or what you produce or how much money you make. Your value, your worthiness is not about the bottom line. So I reject this idea of charging what you're worth. I do think that it's incredibly important for coaches to understand the value of the results they provide through coaching, and that's a very different viewpoint. That is not about worthiness or self worth or how good you think you are. This is about the actual tangible results you are able to help your client achieve, and that absolutely is something that needs to be factored in when you are setting your rates. In fact, I would say first and foremost. When you are considering how to set your rates, you examine the value of the results you are providing, and you are estimating the return on investment that your client can expect to make based on coaching with you. That return on investment maybe financial, especially if you're a business coach. If you are putting together a $5,000 coaching package and you're confident that through the coaching relationship, your client will gain skills and develop the mindset to take their business to the next level and generate revenue that's 3, 5, 10 times the amount of what they've invested in you. Well, that's a pretty good return on investment, and that's certainly something to consider when you are setting your rates. But, again, we are looking at the transformation the client can expect to achieve through coaching with you, and we explored that in last week's episode about creating your coaching offer. So, again, if you need a refresh, go to last week's episode and check it out. 

But once you are clear on the change the client can experience of and what the end result looks like for them. We can look at the value of that and factor that in to setting our rates. That's the first thing I want you to consider is the value of the results your client will receive through coaching with you. The second thing I want you to consider is what you need to bring into your business in order to sustain business operations and your lifestyle. It's very important as entrepreneurs, as CEOs of our businesses, that we understand the revenue, the income coming into our business, and the expenses going out. We need to make sure that when we are setting rates for our businesses, we are doing so in a way that promotes our businesses' sustainability. We need to make sure that we're able to cover our bills. We need to make sure we are paying ourselves because when we are generating income, when we are not just bringing in money into our business, but also paying ourselves a salary, we are then able to support our lifestyles. We can pay the mortgage. We can pay tuition. We can pay student loans or other debts that we have. And in doing so, we are then able to foster a lifestyle that allows us to live out our values. So I know that when my business is generating revenue and I'm able to take home a percentage of that, I can contribute to my household expenses. And that promotes a sense of security and allows me to then focus on other things that bring me joy in my life. And that's why we are in business. Right? We want to foster joy and independence and satisfaction and fulfillment. Whatever values you hold dear, your business can help you live those out. But in order to do that, there needs to be revenue coming in that covers the business expenses and allows you to support your lifestyle. So, obviously, that needs to be factored in when you are setting your rates as well. You do not wanna be undercharging for your services because that may mean that you do not have sufficient revenue coming in to keep your business sustainable and to keep your lifestyle sustainable as well. So those are things we need to factor in. We need to look at the value of the results you're providing as well as what you need to sustain your business and your lifestyle. And then to an extent, I do want you aware of of what other coaches in your area, both in terms of your niche and also in terms of your location, are charging.

I do not want that to dictate your rates. Again, it’s one of those things to be mindful of where you fall on the spectrum of pricing, but it should not be the number one factor that drives your rates. Because to be honest with you, I don't really care what other coaches out there are charging for private business coaching or for coach education. I really don't, because I know beyond a shadow of a doubt the value of the coaching that I provide and the coach training that I provide. And I know what it will allow my clients and my students to accomplish. So I ground my rates in that deep knowledge of the value of the results. And, yes, I am aware of what other coaches and what other programs are charging. I need to do that. That is part of making sound business decisions, but that is a secondary consideration for me. I'm aware of it. It's on my radar, but it is not driving my decision making, not nearly to the extent that the other things we've talked about do, and that is the value of the results you're providing and what you need to sustain your business. 

Outro:

I have to admit, it was kind of fun to listen back to that episode. And really to all of the older episodes were rebroadcasting right now. I have not listened to most of these episodes in about three years since they were originally aired. And so I am really proud of the fact actually that I can go back and listen to an episode from 2020 and the concepts that we're talking about are still just as relevant today. So I think if I were to re-record this episode today, I would probably spend a little more time talking about how to price yourself in terms of what the market is doing. And here in 2023, one thing we are seeing more and more of, especially versus 2020 are low ticket offers, we're seeing a lot of $9 offers, $9 memberships, and the like. And so that can bring up a lot of questions for coaches who are looking to price their coaching offer. So what I might talk a little bit about more today is the fact that these low cost offers, these introductory offers are designed to introduce people to you in a low cost and low risk way. So that you can continue to nurture that relationship and eventually move them in to some of your higher priced programs. I think this can be a very smart strategy. In fact, it's a strategy I've used before, not so much with $9 offers, at least not yet. But I certainly have $27 and $37 offers such as the Client Creation Kit, which by the way, if you haven't checked that out, it's really good, you should totally do that. Just head to coachwithclarity.com/CCK, that stands for Client Creation Kit, you can check it out, we'll make sure there's a link in the show notes for you. 

But I know that my goal is to continue to support the people who buy that lower ticket offer in the hopes that as they grow, they may want continued support in a more personalized fashion. And that's where my one on one and small group programs come in. So when we are pricing, lower cost offers, we want to do so thinking that this is a new relationship with someone who, yes is officially a paying client of ours, but who we may want to nurture into a more intimate coaching relationship, either one on one small group, that sort of thing. It can be tempting, then to think that we've got to price our actual coaching offers, our one on one offers and our small group offers lower as well, because we have lowered the bar to entry with these smaller offers, these $9 offers and the like. I would encourage you not to do that, do not feel any pressure to lower the cost of your one on one coaching because of all of these low ticket low cost offers out there. I see them as being two very separate types of offers. Yes, they are connected in that ideally, you are creating a pathway for your ideal client to walk down in order to connect with you in one on one coaching or small group coaching. So if they start with that lower ticket offer, that's great, but the goal is for them to continue. And to do that we need to nurture that relationship. But it doesn't mean that we should lower or water down the pricing of our one on one offers. So I would probably talk a little bit more about that where I to record the episode today. And who knows? Maybe I will do an entire episode about that very topic in 2024. I think that could be pretty interesting. 

And I think if I were to re-record this episode today, I would also talk more about not lowering your prices, particularly because if you price yourself too low, in a given market or in a given niche, you may be sending an unintended signal to your future clients that because you are lower cost you are lower quality. And that is the last thing that we want to do. We really want to find that sweet spot where our pricing signifies that we know what we're doing. We're trained, we're ready to go. We can provide exemplary service without out pricing the market and pricing ourselves so high that it's unrealistic for people to work with us. I can't give specific numbers because honestly those numbers vary whether you are providing life coaching, relationship coaching, small business coaching, certainly, the metrics that are used for pricing in corporate coaching or executive coaching are probably going to look different than those we use for life coaching. So this is a case where in my one on one work with my private coaching clients, we will create a customized pricing plan for them taking all of those factors into account. And I think this is a perfect time for me to mention that if you are looking for one on one support. I do have two spaces remaining in 2023 for one on one coaching. So if that is something you think you might be interested in, please reach out. You’re welcome to send me a DM on Instagram or Facebook or Threads. Wherever you're following me, I'm @CoachWithClarity. Or if you prefer, you can send me a good old fashioned email. The address is info@coachwithclarity.com and just let me know that you are thinking about working with a business coach and you'd like to talk about one on one services, and I guarantee I will reply as soon as I can. But that would be my suggestion is to make sure that you are not underpricing yourself, because then you may have a price signaling problem, where you're suggesting that the quality of your work is less because the price is less. And that's certainly not the case and something we want to avoid. 

Well, my friends, I hope listening to this episode about pricing your coaching offer has been helpful. And in two weeks, I will be back with another episode and our Back to Basics series, all about finding your ideal client. And I can tell you having surveyed my email list and speaking with many listeners that this tends to be the number one question that comes up, which is how do I find clients. So in two weeks, we are going to dive into that. And of course, I will be bringing you my updated suggestions for 2023 and beyond. So I hope you will join me for that episode. The best way to ensure that it finds its way into your podcast feed is to subscribe or to follow the show. Wherever you listen to your podcast, there's probably an option to do so. So just click that little button, click that little plus sign or whatever it looks like. And that way you will have subscribed to the Coach with Clarity podcast for free. This is a free podcast. And then new episodes will automatically show up in your feed so they'll be ready and waiting for you on Mondays. So go ahead and do that now and then in two weeks, come back and let's talk more about finding your ideal clients. And until then, my name is Lee Chaix McDonough reminding you to get out there and show the world what it means to be a Coach with Clarity.