Written by: Karen Cappello, Executive Contributor
Executive Contributors at Brainz Magazine are handpicked and invited to contribute because of their knowledge and valuable insight within their area of expertise.
To all my amazing coach friends and peers, this should resonate deeply with you… You’ve been a leader in the corporate world for as long as you can remember. You’ve coached and mentored others along the way. And yet, you’ve always considered it a part of your job. After all, you’re not used to charging for your services. Just writing that takes me back to my early coaching days :)
Now that you’re an Executive Coach, it’s a whole different ball game. You’ve been thinking about your pricing model…You want to make enough to fund the lifestyle you are accustomed to and yet you don’t want to charge so much that no one is willing to pay.
So let’s talk about it.
How do you find a way to price your services so that your ideal clients will happily pay, and you will be able to replace and EXCEED your corporate income?
Here are the insights I’ve picked up along the way!
Let’s Look At The Return on Investment
It’s always good to look at the Return on Investment of the coaching project to begin getting insights into how to price it.
As an overarching principle, the Return on Investment for coaching is absolutely PRICELESS, and I believe that's why it's so hard to put a price on it and ask for the engagement.
Any price we charge is not going to even be in the ballpark for the financial and transformational gains our clients receive.
With that said, there are ways to QUANTIFY the value of coaching. Think about some of these costs that coaching can help with:
Replacing an employee – According to SHRM, replacing an employee costs 50-60% of their salary, and the overall costs can add up to 90%-200%.
In a CAP study, up to 213% of the annual salary for highly educated executive positions is over $500,000 (For example, that’s the cost to replace a $250k CEO).
So here’s a fun exercise to try out.
Just as we did with the above, connect your client’s quantitative and qualitative gains to each of the following categories:
Saving time
Onboarding and training time and costs
Learning and development time and costs
Losing time with an unfulfilled role
Intangible cost of impact on employee morale
And remember, there are also returns that will last years and years into the future!
A Very Insightful Anecdote…
Years ago, I worked with a leader on getting a new position at a different organization. We came up with a list of criteria that she wanted, including a raise in salary which was 1.5 times what she was currently making.
Within 9 months, she got a job at the salary she envisioned. Her immediate ROI was $75,000 minus the cost of the 9 months of coaching, which was somewhere around $10,000. She was in that job for a few years until moving on to another position.
After 3 years, the investment yielded over $200,000. And, when she went to her next position, she could now negotiate from that salary level. Think about it, the coaching engagement led to a very lucrative position that positively impacted her negotiating power for her entire career from that point on.
This is a pretty insightful way to look at it!
When we start thinking about the TANGIBLE benefits of coaching, along with all the confidence, leadership skills, and transformative thinking that it provides for our clients, we can see the Return on Investment is almost infinite!
To the Coaches Who are Hesitant to ask for the Pricing They Desire…
I’ve learned that there is a VALUE in asking potential clients about what's at stake if they don't make a change and what their challenge is costing them.
In most cases, it’ll be clear that they haven’t even thought about that, and need a gentle nudge toward the realization of just how beneficial working with you could be!
I see the value of these questions as twofold: You may have heard the saying, “the first sale is to yourself.” As a coach, YOU will realize the financial value that is provided to the client both during and after the coaching occurs.
Secondly, your prospective client will realize the monetary value of making the investment in coaching. That makes it easier for them to say ‘yes’ and feel great about it.
Thank you so much for taking the time to read this!
If you’d like help in determining the ROI of your coaching, or how to have a conversation that conveys to your clients the TRUE value of coaching, I’d love to support you! Please message me and let’s have a chat.
Karen Cappello, Executive Contributor Brainz Magazine
Karen Cappello, MCC, BCC, is a business and executive coach, communication specialist, motivational speaker and coach trainer. She collaborates with leaders and executive coaches to promote highly beneficial business outcomes. With over 30 years of experience and expertise in business management, financial planning, and higher education, Karen has brought a broad-based background to her coaching clientele.
