Among the decisions that affect your coaching business success most, pricing strategically is up there with targeting a narrow and viable audience and creating a stand-out niche.
It’s a moment of maturity for a coach to “do the math” and make sure their pricing allows them to earn their desired annual income.
Early on, I just wanted to make a quick decision about pricing and not think about it any more. I followed the lemmings off the cliff. I just did whatever I saw other coaches doing.
You too?
I get that. Coaches are focused on service, helping people and, well … coaching. Why should you know anything about strategic pricing or running a fiscally sound business? Maybe now is the time to learn.
Let’s talk about the strategies that support smart pricing decisions so you can earn that six figure income you want.
It’s Time to Do the Math for Your Coaching Business
So, let’s say you are about to price a coaching program … before you go any further, are you offering a Signature Program custom made for your target audience instead of just a bunch of tiered coaching session packages? If not, re-design your offer.
A Signature Program is a much more effective way to offer coaching to your audience without having to convince people to buy coaching, which is a miserable approach and not very fruitful. Learn more about that in the previous Episode 274, if you haven’t already, at ProsperousCoach.com/274.
Before you slap a number on your offer, consider your pricing strategy. Yes, this is a bit of Pricing 101, but bear with me. I know you’ll learn something truly helpful.
Cost plus pricing is where you calculate your costs then increase or mark up the price so you are paid well beyond your time and cost investments.
Is this mercenary? No, it’s about sustainability – staying in business.
Have you ever considered the costs behind your services?
Most coaches do not at the beginning.
Sure, coaching is relatively low overhead as businesses go, but you’ve had start up costs for:
- coach training
- perhaps working with a business mentor like me
- and, hopefully creating a professional and client-winning website
Then, there are ongoing annual and monthly costs for various apps to run your business smoothly. There’s also things you might not consider like the cost of your cell phone, wifi, home office expenses, working with a CPA and taxes. All of these things should be factored into your pricing.
Is that blowing your mind already? What I know for sure, is that if you take the time now to act like the CEO of your coaching business, you will:
- feel EMPOWERED in your business
- make better decisions
- and stay in business as a coach longer than your coaching cohorts who do not do this
Episode 111, called Smart and Not So Smart Coaching Business Expenses provides a list of likely expenses for you.
It’s time for you to do the math.
I’m not going to go into that process here. Instead, listen to Episode 57 called Coach, Is it Time to Give Yourself a Raise? I walk you through how to do the simple math so you can price your services intelligently.
Value based pricing is where you set your price based on the value of your offer to the client.
Perceived value is a subjective thing. But you can assist your prospects in perceiving more value in your offer and assist your clients to squeeze a lot more value from working with you. Do this by strategically bundling your Signature Program so it has more than just a set of sessions. This was also covered in Episode 274 mentioned earlier.
Dollar per hour pricing is a special kind of trap that many coaches put themselves into and don’t know how to get out of it.
Competitive pricing is where you set your price based on your competition.
Don’t use this approach for your coaching offers.
If you have strategically niched and narrowed your audience so you stand out in the crowd, and created a customized high-ticket Signature Program that describes, in benefit-rich language, the specific BIG problems you help your clients solve on the way to specific big goals they know they want, you need not compete!
I will say that last part again …
You don’t need to compete with anyone if you strategize your business from the ground up!
This is what I do with coaches ya’ll! And, this is how you succeed as a coach in today’s crowded marketplace. And it makes every aspect of your business more fun, meaningful for you and your clients, and profitable.
So, no competitive pricing for you, Coach!
Instead, mix the cost plus pricing with value based pricing strategies to determine the price of anything you offer and you’ll come out on top with eager prospects and satisfied clients.
3 More Tips for Coaches About Pricing Coaching Services
- Have you noticed the power of odd-numbered pricing when you purchase something?
It’s weird, but for some reason odd numbers are more attractive to human beings than even numbers at the moment of purchase. It is ingrained in our thinking. There’s an emotional response to it, even if it’s not logical.
So, instead of pricing your Signature Program at $5000 — I’m talking USD here — price at $4975. Weird, right? But it works!
2. Free yourself from payment plans.
If you want to attract a more motivated clientele express your prices as single pay up front. After a long time of offering a payment plan I finally realized that the clients who paid for my programs with a payment plan became difficult clients.
In the end, after being challenging week to week and not really taking in anything, those payment plan clients either dropped out or I had to fire them because they weren’t showing up fully for the work.
I believe it’s because they weren’t fully invested up front either financially or energetically or emotionally. They had one foot out from the start. A part of them was not fully ready to transform.
You may worry that if you don’t offer a payment plan, less clients will enroll but I have noticed that when people truly want the outcome you provide they will find a way to make it happen. That makes it up to you to articulate what you do in a way that resonates.
No more talking about the virtues of coaching. That just doesn’t work. Instead try a less salesy way to attract clients.
3. Price high to attract high caliber clients and earn well.
A 5-month high-ticket Signature program might be priced at $5,975 — paid up front!
Does that sound like too much to you? It is not if:
- You want to earn enough to stay in business.
- You don’t want to spend all of your time finding and enrolling enough clients.
- You consider all the costs of your business plus the time that will go into, not only your sessions with clients, but all the marketing and admin to attract, enroll, onboard and serve them well.
I know this may be a lot to take in and it may be something you didn’t really want to deal with in the first place. And I know for a fact that your growth as a coach and business owner will speed up if you can learn to think these practical decisions through strategically.