7: Pricing Your Coaching Offer
Last week, we did a deep dive into creating and conceptualizing your coaching offer. If you missed that episode, I highly encourage you to listen to it before checking this episode out. This week, we're continuing our Getting Started Series with a topic that I know many of you have questions about and that's why I'm thrilled to explore how to price your coaching offer.
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Last week, we did a deep dive into creating and conceptualizing your coaching offer. If you missed that episode, I highly encourage you to listen to it before checking this episode out.
This week, we’re continuing our Getting Started Series with a topic that I know many of you have questions about and that’s why I’m thrilled to explore how to price your coaching offer.
As part of this conversation, we’re looking at what goes into setting your rates and the three important aspects you need to consider when you are setting your prices for your coaching offer.
- Should you utilize a package pricing approach or a pay-as-you-go approach for your coaching offer?
- The story behind why I personally prefer a package pricing approach
- Should you offer an installment or payment plan for your coaching offer?
- How I determine if I’m going to offer a payment plan for my private coaching services
- Why the idea of “charging what you’re worth” drives me bonkers
- How the value of the results your client will receive factors into your rates
- The importance of understanding how much revenue you need in order to sustain your business and your lifestyle
- Why you should be mindful of what other coaches in your niche are charging without letting that dictate your rates
Now it’s time for you to show the world what it means to be a Coach with Clarity! Screenshot this episode and tag me on Instagram @coachwithclarity and let me know what you’re more excited to explore in future podcast episodes!
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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 want to go back one, take a listen, and then come back and 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 three important aspects when considering how to price your offer. So today, we are going to 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 three big things we're going to tackle today – we're going to 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 going to get clear on what you need to consider when setting your rates. So if you're ready, let's do this.
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, o 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 two 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 want to 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's unique needs, your clients needs, and ultimately what is going to serve everyone best at the end of the day.
In my business, what I found was that package pricing was the way to go, and I want to 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 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 timeline 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've 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 I didn't have his interests at heart.
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.
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 in 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.
At the end of that session, he agreed to move forward with me for a six-month period of time at a set package price, and actually he paid info at the end of that session. So here's where it gets really interesting. We had scheduled our next coaching session for two weeks later, we were going to start our brand new package two weeks later, and he got more accomplished in the two 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 two weeks. And then the momentum that that created, allowed him to create even more change for the next six 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 into 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 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 one time conversation that we had in the lead up to agreeing to a six month relationship, 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 structures 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 the 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 second 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 want to 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 want to 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 three and a half hours on a given day. Sometimes we'll break them up into two different sessions. And then I meet with them two 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 one extreme standard 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 non refundable deposit to hold the slot, and then the remaining balance is due two 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 three months or less. So if a client is working with me for three months or less, then again, they pay a deposit, a non refundable deposit, to hold the slot, and then the package price is due in its entirety, two business days before we have our first 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 six months, I may offer a payment structure. And I want to 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 six months, I require that 50% of my rate be paid two business days prior to our launch session. So half of the package price has been paid when we start coaching together, then n additional 25% is due six 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 has three 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, as 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 one conversation at the beginning, and then the client knows what's expected. And so when that invoice comes, they know “Oh, right, it's six 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 six month contracts, you are creating three 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 six 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 that 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 in 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 want to 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 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 than 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 may be 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 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 business’s 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 at 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, that promotes a sense of security, and allows me to then focus on other things that bring me joy in my life. 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 want to be under charging 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 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 so that you know 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.
Hoo boy, we've covered a lot today in talking about pricing. I think this is the perfect time to take a pause, and then come back for the Clarity in Action moment.
For today's Clarity in Action moment, I want you to take a really good look at that coaching offer that you developed after last week's episode, and I want you to think about the results that are possible for your clients once they have walked through the entire coaching experience with you. And with that in mind, I want you to start playing around with rates for that package.
And I use the word play intentionally because I do want us bringing a spirit of fun and joy to this. Sometimes when we we talk about money or we talk about setting rates, it can feel heavy, or scary or uncomfortable. And that's certainly not the energy that I want to bring into my coaching packages. So again, I want you to play a bit with the rates.
I want you to factor in external data, like we talked about before, what you need for your business to be sustainable, and maybe what other coaches in the market are charging as well. But I want you to take that external data, and I want you to merge it with your own internal wisdom. To an extent, I want you to anchor this offer and your rate and something that feels good and aligned and true. And again, there's no one right number for that. I can't sit here and say, I think you should charge this for your package. That is something that you know, and when you marry that external data with that internal knowing, then you are going to come up with the ideal rate for your package. You can do this now.
If you would like some support in this process, there are a couple things you can do. First and foremost, within the Coach with Clarity membership, we talk about rates and pricing, and we also talk about how to communicate them to potential clients. Within the Coach with Clarity Tool Kit, I have templates and guides about how to have that proposal conversation with your client, and when to have it. A lot of times people will lead with their rates and that is not something I suggest you do in the membership. I walk you through exactly how to have that conversation, and at what point in the process it makes the most sense. So you can certainly get some additional support and guidance by becoming a Coach with Clarity member. You can learn more about that at https://www.coachwithclarity.com/membership.
Or if you would like a more dedicated, hands-on, one-on-one approach to your business, I take on a limited number of private clients every quarter. I have one space a quarter available for a six month client, and I have two or three spaces a quarter available for my half day coaching intensives. So if you are considering private coaching, I would love for you to check out https://www.coachwithclarity.com/coaching. You can learn a little bit more about me and my approach there, and you can also apply for a consult call where we can talk about whether I might be the right fit for your business and what working together privately would look like.
So again, you can learn more about the membership and about private coaching by heading to https://www.coachwithclarity.com. But I hope that today's episode has equipped you with the knowledge, the skill and the confidence you need to go out there and set a price point for your coaching offer that feels good and that will empower both you and your clients.
You have everything you need to do this. I have full confidence in you, and I'm here to support you every step of the way. And next week on the show, you are going to get to listen in as I walk one of my Coach with Clarity members through this process of creating and pricing her coaching offer. So it's almost like getting a sneak peek into behind the scenes of the membership. You are going to love it. I can't wait to share it with you next week.
So you're not going to want to miss that episode. Make sure you have subscribed to the Coach with Clarity podcast if you haven't already. That way it will show up in your feed automatically, first thing Monday morning, and we can start our week together.
All right, my friend. Again, thank you so much for tuning in to the Coach with Clarity podcast. It's always a joy to connect with you this way. If you'd like to continue the conversation, be sure to head to the Facebook group (https://www.coachwithclarity.com/facebookgroup) and we'll continue the conversation over there.
In the meantime, have a wonderful week. My name is Lee Chaix McDonough encouraging you to get out there and show the world what it means to be a Coach with Clarity.