One of the biggest challenges that newbie business coaches experience (and even many experienced coaches) is uncertainty regarding how to put a price on their coaching services. They fear that they could set the rate so high that potential clients opt out of contacting them, or they fear that the price may be so low that clients think the services offered aren’t worth the effort invested.

What’s a coach to do on this matter of setting the appropriate rates for their services? We explore some of the strategies which can help you to tread the thin line between charging too high a price or charging a rate that is too low for your professional services.

Don’t underrate your experience

You may be new in the field of coaching, but you have vast experience in your industry. For example, if you only got your fitness coaching credentials a couple of months back but you have been an avid unofficial trainer at your local gym for years and people flock to you for help in attaining their fitness goals, that experience counts for a LOT.

You should therefore not discount your worth just because you have just established your coaching business. If you aren’t convinced as yet about how valuable what you know is, do a simple Google search and see how many people are making six or even seven figure incomes from what they know about fly-fishing, looking after indoor plants, and literally any other subject you can think of.

Newbie or not, set your rates with the firm belief that you are an expert in your field and there are lots of people willing to pay you to leverage your expertise in solving their problems. 

Research the going rates

Another strategy you can use while making decisions on how to set a price for your business coaching services is to conduct some research about what other professionals in your niche are charging.

Remember that the rates charged by others in your field will vary based on factors like how established a given brand is in the industry, the location targeted by a given coach (a business coach in the Bay Area of San Francisco is likely to charge way higher than another in a rural town in Nebraska), and so on.

The main point in doing this research is to get an idea about the range clients are willing to pay for business coaching services. You can then base off of this research to set your “penetrating price,” the price intended to attract your first clients and get testimonials which confirm your expertise in the niche you have selected.

Visualize the ideal client for your business

You can also come up with a pricing plan for your coaching business by mapping your ideal client persona. For example, are you targeting top executives in unicorn companies or your focus is on small business owners struggling to grow their enterprises to the next level?

The clientele you wish to attract can help you to figure out how much they are willing to pay for your business coaching services. After all, you can’t help everybody, so set rates which will be reasonable with your ideal client base.

Gradually increase your rates

Remember the strategy about setting a rate to help you penetrate the market? You can use that rate to help you launch your business to higher levels by raising your rates gradually as your client base grows.

For example, if you calculate that you need at least 10 clients in order to make a decent amount of money to survive during the month, raise your rates by 30% once the first ten clients sign up for your services. Observe how the people respond to this new rate. Once you enroll another ten clients at that new rate, raise it again. Rinse and repeat this; the sky is the limit of how high you can go!

The beauty of this pricing strategy is that you have the cushion of the previous set of clients in case your target market is slow in accepting your new rate. Once you have enough clients to survive and save at the new rate, this group now becomes your baseline and you go higher until you are charging premium rates (while also offering a top-tier quality of service, of course!).

Design coaching packages/tiers

Another helpful strategy as you set the price for your services is to have business coaching packages or tiers from which prospective clients can choose. For example, you can create a 3-month package that includes 10-12 coaching calls plus weekly email check-ins with your clients.

Another package can include weekly calls plus face-to-face meetings, for a period of half a year or a year. In this way, you give clients the leeway to select a package that suits their needs while also giving yourself room to work in diverse setups.

One word of caution on creating coaching service tiers/packages; avoid having very many options because analysis paralysis may set in. This is because potential clients have a big decision to make regarding your suitability for their needs, and too many package tiers make it harder for them to decide whether to work with you and under which particular coaching package.

Be wary of trial rates

This strategy is a hard one for beginners to swallow because it appears to go counter to their intention of getting a foot in the door, so let me explain.

In psychology, there is something called a mental anchor. Regarding coaching prices, this is a number that you plant in clients’ minds and they regard it as the default rate at which services should be priced.

For example, if you say that you are charging a trial rate of $150/hr. for your business coaching services, it may be hard for clients to pay your full fee of $300/hr. (for example) once the trial period or sessions are up.

Do you see where this is going? It means that you have doomed the future of your business right from the get-go because you could end up stuck at the stage of people signing up at the trial rate and then disappearing once that offer is no longer available to them. In such a case, you will “forever” be looking for new clients and never getting any referrals since those you get disappear long before you have made your mark on their businesses.

It is therefore far better to charge the full rate (for example at the penetrating level) and then adjust it upwards as your business attracts more clients.

That said, your services can be priced hourly, at a retainer fee, or on a value-based pricing model. The hourly pricing and retainer fees have their own challenges (such as getting midnight calls from clients who feel entitled because they are giving you a monthly retainer). The best is a value-based approach (for example charging clients a given fee to help them grow their monthly revenue by 30% in half a year or less. But, since each business coaching service is unique, see how to leverage the strategies above and come up with a pricing structure that allows you to be adequately compensated while helping as many people as you heart desires!

Yo Your Success,

Jairek Robbins