6 Big Mistakes Coaches Make When Setting Their Coaching Prices

“Alisa, I’ve been giving this some thought since we last spoke and I worry that people will not be able to afford my coaching services.”

Wow, what a way to start a conversation. “Hello to you too!” I thought to myself before answering. “Let’s have a look at this together. How much do you intend to charge?” I asked. The answer surprised me — “I haven’t decided yet”.

The first time this happened, my jaw dropped. The analyst in me was not prepared for something my logical brain could not understand. How can you worry that someone will not afford your price when you don’t even know what that price is?

After a few months of having pricing conversations with coaches, I could keep a poker face after hearing something similar. No, I haven’t exercised my jaw muscles, but I learned that when it comes to coaching prices, we tend to fall victim to all sorts of (irrational) fears that lead to mistakes.

Here are six mistakes coaches make when setting their coaching prices.

1. Assume that clients cannot afford their prices

See the example above. Whether you charge the equivalent of a cup of coffee or a six-figure sum for your coaching, there will always be some people who cannot afford it. That’s the glass-half-empty way of looking at it. At the same time, there will always be people who can afford that price and would happily pay it.

There is a client for every price point. I picked up this saying from one of my mentors and I truly believe it’s true.

Assuming none of your prospects can afford to work with you means that you’re either trying to sell the right thing to the wrong people, or the wrong thing to the right people. That is why a well-defined niche and a relevant and attractive coaching offer are so important.

2. Charge on a per hour/session basis

Charging per hour or per session seems to be the default for a lot of new coaches. Reminiscent of our times as employees, being paid by the hour feels right and it’s easy to quantify.

There is only one problem: clients don’t pay coaches for their time. It is not spending one hour with you that people are looking for. If that were the case, clients would be willing to pay the same price for an hour of coaching or for an hour playing scrabble with you. But they don’t, do they? Instead, they pay for the consequences of being coached by you.

Those consequences, i.e. the results they can expect from working with you, cannot be broken down into hours or sessions, but need to be looked at as a whole. Your prices should reflect the overall value your clients get from working with you, not how many hours they spend being coached.

3. Compare their prices with those of other coaches and professionals

I understand why you would want to do this. Coaching is not a regulated industry yet, and therefore there is no official market rate for how to price coaching services. Looking at what other people in this space are doing might give you an indication of how much to charge for coaching.

Even if you get this information though, you won’t know how those prices were arrived at and you certainly can’t assume that they will be the right ones for your target market.

Your prices should be set with your client in mind, not your competition.

Also, if you’re tempted to “borrow” someone else’s prices, make sure you’re not getting more than you bargained for: their money beliefs and blocks, assumptions about the market, level of self-confidence, etc. Yes, pricing reflects that and more.

4. Make it about themselves

How many times have you heard the advice to charge what you’re worth? What if I told you that you’ll never be able to do that?

You are worth infinitely more than you could ever charge. As a human being, you can’t put a price on your worth. It is, as MasterCard-y as it sounds, priceless.

Therefore, instead of trying to price the unpriceable, set your coaching prices based on your target market (see the next point below).

5. Don’t research the market and their ideal client

Market research is one of the crucial skills you need if you want to make money as a coach. How well do you know the coaching industry and what is the demand for the type of coaching you offer? What is the level of disposable income your clients have? What is the magnitude of the problem you can help them solve and what are the (opportunity) costs of not solving it?

Until you know the answers to these questions, you won’t be able to appropriately price your services. I talk more about coaching price influencers and differentiators in this video.

6. Don’t take financial viability into account

In an attempt to make your coaching services super affordable for your clients, you might accidentally jeopardise the financial health of your business

.A low price will not necessarily attract more clients, so think carefully before deciding to lower your prices or offer discounts.

Especially if you offer 1:1 coaching, there is a limit for how many sessions you can deliver before you run out of hours in the day. Therefore, you need to take your financial goals into account and make sure that the price you’re charging allows you to meet those goals given the time limitations I mentioned above.

I talk more about money goals for coaches and how they translate into number of clients in this video.

Setting your coaching prices is not going to be easy. There are many variables involved and you’ll need to do a lot of research work and even go through a couple of trial and error rounds before you get it right.

On top of that, it’s a sensitive subject. People don’t like talking about it. If the topic of pricing your coaching services is of interest to you, you can check out this series of articles where I address it in more detail.

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This article was originally published on Medium.

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