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This episode is part of my Money Mastery series.
Common Pricing Strategies and What Works Best for Coaching
I can think of 3 common pricing strategies for pricing:
- Cost plus pricing – where you calculate your costs then mark up the program so it pays you well.
- Competitive pricing – where you set your price based on your competition.
- Value based pricing – where you set your price based on the value of your offer to the client.
I do encourage you to the do the math of what it will cost you to deliver your program. Most coaches miss this piece. And it’s quite eye opening to realize the cost of the time you spend getting a single client in addition to specific costs of marketing and inclusions in the program.
That said, to ultimately determine the cost of your program I prefer VALUE based pricing.
Here’s the reality, if you narrow to serve a viable audience and create a unique program based on market research, then your program probably doesn’t exist out there so competitive pricing or so called “market value” isn’t a useful guideline.
Also, few if any of your prospects are ever going to do cost comparisons, especially if you don’t sell coaching but rather offer a unique program.
Purchasing a program such as I suggest you create is an emotional decision.
They will hear or see your message. Their trust in you builds because you’ve struck a resonant chord with all that you’re doing.
Then, they go to your website, which is hopefully already designed as a client winning coaching website not an online brochure. On that website are beautifully streamlined words and conversion processes that gently encourage visitors to have a Discovery Call with you.
All of this is thoughtfully coordinated and strategized but in a non-salesy way to build trust with potential clients rather than trying to convince them about the value of coaching.
They hire you because they like you and trust you. You’ve been in front of them with valuable content and your website reinforces that. Then, in the Discovery Call you lovingly assess if they are a good fit for your program and enroll them.
You don’t want to sell people – to have to convince them to hire you. It’s unsavory. It makes you feel skeevy.
But if you have a signature program that you have thoughtfully crafted to fit their circumstances, their pain and desires then no hard sell is necessary. You do need to ask them to enroll though. ; )
The Mystery of Odd Numbered Pricing
You’ve no doubt seen that a lot of people use odd numbered pricing where prices end with 5, 7, or 9. For example, a long-term high value program might be priced at $5,975 for a 5-month program or an online training might be priced at $697.
Early on in my coaching business I eschewed that whole odd number practice and priced evenly. $5,000 instead of $4,975. $500 instead of $497.
And I struggled to enroll clients. I’m not saying there may not have been other factors involved.
And then, I looked around at the people I admired that offered mentoring, coaching and training. I noticed they were all using odd numbered pricing. I switched and immediately saw a difference in my revenues.
Weird? Yes. But we as human beings have been trained all our lives on odd numbered pricing and it’s ingrained. There’s an emotional response to it even if it’s not logical.
That said, if you have an issue with it, do your own testing.
Encourage Single Payment Investment
With your Signature Program, encourage or incentivize a single payment investment by creating significant savings over a payment plan.
For example, if your 4 month program is $3,995 for a single payment. Make the payment plan total roughly 25% higher. So, 4 payments of $1,249 paid at the beginning of each month — which adds to $4,996 — is over $1,000 more than the single payment.
Incentivizing a single payment helps both you and your clients in these ways:
- They invest once rather than continually making payments, which is an irritant.
- They are not focused on the financial investment but rather fully focusing their energy on transformation.
- Also, bundled programs like I’m suggesting don’t deliver value in even amounts month to month.
My own 5-month Coaching Business Breakthrough program is front loaded with value. The first 2 – 3 months, depending on the pace of my client, are where I’ll deliver the most support and assistance to create everything for their coaching business. The last two months are less labor intensive because we’ve completed the bigger milestones.
It’s a risk for you if someone pays monthly and drops out in the early months.
In the last 17 years, 90% of my clients have paid the single payment up front for my signature program. I’ve noticed that those who opted for the payment plan often became difficult clients because they were not as committed to their own success.
I think that’s because they weren’t fully invested up front. They had one foot out from the start. A part of them didn’t believe in themselves up front. And a part them wasn’t fully ready to have a business yet.
In the last 5 years none of my clients has opted for the payment plan.
When people want something enough
they find a way to make it happen.
And just that mindset and action empowers them significantly!
Should You Have Tiered Pricing?
One last thing about pricing … some people advocate having tiered pricing.
I say no. You’ll do better if you direct clients to your Signature Program and stand behind it.
- First, a confused mind never buys. The more offers you have that you’re marketing at one time, the less likely someone will enroll.
- Also, remember … don’t sell coaching. It’s a hard sell.
- Do coaching with paying clients who have enrolled into a program they know they want.
- And, the more people you sell into your signature program the more you earn doing exactly what you love.
If you want to create lower priced programs than your Signature Program, consider making them altogether different. For example, offer an online program about a different thing your target audience wants help with. It’s not only different in focus but also different in format.
Sell it as a down sell only after someone firmly turns down your Signature Program. That way you don’t set up competition for the program you most want to deliver.
But consider, that you don’t really need to have other offers besides a free downloadable offer so you can build rapport and stay in touch with your network unless you’re prepared to create a separate way to attract potential clients to that offer.
This and the episode before it were an episode loaded with tips. Consider listening to them again and please share it with fellow coaches. So many struggle with this piece.
Also, if you want help to create your entire business foundation with everything I’ve talked about in these episodes, go to prosperouscoach.com/VIP and tell me about you.
We’ll have a conversation about what you want and what’s been in the way to see if you’re ready for a coaching business breakthrough.
In the Next Episode: Get Out Of Your Own Way To Earn More As A Coach