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16 Jul 2023 | Coaching, Self-employment

Prompts on pricing your services as a coach

This is a subject which is one of the hardest to pin down in order to explain to others yet is one of the most important on your path to success.

As ever, your definition of success is your definition of success, not mine, not Tony Robbins’, not Warren Buffet’s, not your parents’ or peers’. Please adapt as necessary.

Spoiler alert: I don’t have a clear answer. Anyone who says they do… well, are they trying to sell you a course? #forgivemycynicism

This is more about asking questions for yourself. I am practically thinking out loud as I type this myself and is something I revisit on a regular basis. The questions herein are as much prompts for discussion for me to learn from your thoughts as they are for you to get prompts from me on this one. There is no right answer. The wrong answer will make you feel you’re crossing your own personal values.

To start: a definition of scope of this piece. I initially set out to write one all-encompassing article here to summarise some ideas on what “value” is and therefore how to prices your goods or services for every conceivable business. Whilst much of the concept of value or how much people will buy your offerings for applies to tangible products (including products like software), this week’s piece will focus on my core values and personal experience in pricing coaching services. It’s just too wide a scope to try to cover everything else in one essay. It will apply to therapists, counsellors and similar services as well. To an extent also those looking at consultancy services. There will be some ideas, eg on reputation and perceived trustworthiness which still applies to goods, however.

In the business coaching side of my work one of the major topics I am asked about is how to price the offerings of the business. Indeed, it is one of the topics I will bring up with clients especially where I feel they are pricing themselves noticeably different to what seems normal for their current audience – I have been there myself and have learned how one’s values (what you can’t not be), humility vs arrogance, “imposter syndrome” and a bunch of other ideas can severely impact one’s earnings potential. The price can be abnormally higher as much as lower than the competition – both can impact and limit one’s revenue. Finding the comfortable sweet spot for your pricing is hard. It very much depends on your needs as well. Your “success”.

This is a difficult topic as it’s so broad, so nebulous, encompassing so many topics, such as: economics of supply and demand, market forces, brand image/reputation, your audience’s values, current economic state (eg recessions), affordability for your intended audience, perceived value (pre- AND post-purchase, and beyond post-delivery) and your own values (emotional) and a whole bunch of other topics. Even as I sit here typing it out I am often pausing to organise thoughts – I “get” the concept, but trying to explain it in a digestible manner is a challenge!

“What am I worth?”

Well, firstly work on the idea of separating your self from that which your business offers for sale. You, dear readers, are priceless. That’s not in question.

The actual question is more like what are your skills, experience and to an extent your trustworthiness worth to the potential purchaser.

Recently a peer pondered the proposition of how “value” and our “values” (core principles to which we live our most “authentic” lives) are intertwined. Good point when you think about it.

With difficult topics I like to revisit the base meanings of the words we use – the etymology of words – as their meanings and connotations are so fluid over time that it’s easy to get lost in current trends. Look at “influence” for example. Getting back to basics can help so much to strip away the layers of meaning to get to the core idea.

From the Etymology Online Dictionary entry (as an example):

  • Value (noun): “c. 1300, ‘price equal to the intrinsic worth of a thing;’ late 14c., ‘degree to which something is useful or estimable,’ from Old French value ‘worth, price, moral worth; standing, reputation’ (13c.), noun use of … valoir ‘be worth,’ from Latin valere ‘be strong, be well; be of value, be worth’ (from PIE root *wal- ‘to be strong’). “

I think it’s also useful to reference the root word “*wal-” noted above.

  • *wal- : “Proto-Indo-European root meaning ‘to be strong.’ It is [linked to] Latin valere ‘be strong, be well, be worth;’ Old Church Slavonic vlasti ‘to rule over;’ Lithuanian valdyti ‘to have power;’ Celtic *walos- ‘ruler,’ Old Irish flaith ‘dominion,’ Welsh gallu ‘to be able;’ Old English wealdan ‘to rule,’ Old High German -walt, -wald ‘power’ (in personal names), Old Norse valdr ‘ruler.’

In addition, the concept of our “values”: “‘principles, standards,’ … from plural of value (n.). … from 1918” (see above)

(Aside: Yes, I have noted that the etymology of “value” references “value”. Hmm. I imagine someone explaining the concept of value using gesticulation of shrugging their shoulders in exasperation of attempting to explain this by saying, “You know, value is value! It’s, you know, what is valuable!” Which isn’t at all helpful.)

Thus, from this, our core values (that which we can’t not be), our core principles could be described as being based upon concepts of ruling, of power, of worth(iness), reputation and strength.

Our core values are that which we feel give us strength, a sense of power (in, from and over ourselves?) – that which we can rule our selves from? I particularly like the Old Irish use of “dominion” there.

Our values are our dominion over our lives.

There’s an interesting idea to incorporate when trying to understand and define what our values are and what drives us in our lives. Something to ponder.

It also helps us to set boundaries on what we feel our abilities are worth to others.

So, what are your services worth? How to price those services?

A quick and easy business coach answer is to check your competitors and pick a number aligned with theirs. Slightly more in depth, do a SWOT* analysis and a competitor analysis and pick a number. Potentially go ask your intended audience by way of a survey, create a focus group of sorts find out how much they would pay for your stuff. Ask why they might consider paying more for it. Easy. Hell, even ask yourself how much you would pay for the service you’re offering.

*In case you don’t know SWOT = Strengths, Weaknesses, Opportunities, Threats. Well worth doing. Also a PESTLE analysis (Political, Economic, Sociocultural, Technological, Legal, Environmental – all sorts of things can impact your business’ success)

That’s the “cold” data driven analysis of pricing. Yet it doesn’t really answer why some people will pay more (or less) than others for a given service

With many providers or services there are often a huge range of prices even where that quality of the work appears to be of similar quality. The results of the work done with clients is incredibly hard to put a money value on. How much is a sense of a better life worth in money terms? Well…

In, for example, career coaching, if you manage to help your clients increase their wages 30%, you can help your client understand how much that’s worth to them in cold hard cash terms and so your hourly/session rate is relatively easy to put a figure on. Similarly in business or sales coaching/consultancy, you can ask questions like “If I can help you increase your turnover and profit by even a paltry 5%, how much is that worth to you?” Yet the offer is based on a “promise” (no guarantees) of future results. The results cannot be guaranteed and won’t be realised for (probably, approximately) at least 3 months use of the services. Plus, not all clients are looking for change in money terms, often it’s more about freedom, better work/life balance and overall happiness.

Turning the table, how do we decide to purchase the services of a coach, or counsellor, consultant where results may take some time to realise and even then the results are intangible? How on earth do you put a price on happiness?

The value provided is in essence, based on the concept as per the definitions noted earlier, as moral worth, reputation, standing (which in turn gives a sense of “power” in some ways). It is a case that we service providers are perceived as having a moral standing, good reputation and worth. Often through word of mouth, good testimonials and case studies, and also simply through pre-acceptance conversations to check for a good “fit” / chemistry / connection.

Often it boils down to a “gut feel” – the intuition that you’re worth the asking price, or that the price you buy services from others is of value to you and your needs at the time.

But why the huge price range? What makes one coach’s service worth more than others? I have met coaches claiming to be paid upwards of GBP £250 an hour who don’t seem to be any more qualified than coaches at a third that rate. I have seen plenty of counsellors who have gone through far more, focused, in-depth qualifications, who are regulated by national psychologists’ bodies who charge noticeably less than coaches. Both can help people to change their lives considerably. Is it perhaps literally down to sheer confidence of being able to say “The price of happiness is 500 an hour”?

Perceptions of worth of trust (trustworthiness) of an ability to help instigate change from a current status quo towards a better future.

I am reminded of the concept that your services are worth the price people will pay for them. Also, remember it’s easier to lower your prices than it is to raise them.

I am also reminding myself of the Latin etymology of the term “confidence”, as in “to trust thyself”.

What feels like “too much”? What is too uncomfortable to ask for? If the average in your region (or audience) is $/£/€150 an hour, but you want to see if you can get more than this, say to yourself “500 an hour”. Does that seem ridiculous? Yes? then lower it. How about “20 an hour”? Too little? So where is your “Goldilocks” gut feel comfort zone for pricing? Is it worth putting it out there to those who contact you? Can you confidently justify that price? Will you feel rejected and worth-less if the prospective customer scoffs and balks at the price you quote? To your intended audience will the price feel too much or indeed too little? Are you attracting the wrong audience?

Your intended audience will make a huge difference to what you can ask for (and be accepted at). If you’re aiming at, say, Hollywood A-listers and millionaires who are struggling with a sudden onset of crippling self-doubt, maybe 500 an hour is nothing and they won’t flinch. Conversely on the concept of pricing too low, I have had friends who have worked at a high level in multinational corporations say, “If you quote less than 100 an hour, I would think you’re shit.”

Once you have had one person pay you your asking price, it’s much easier to have the confidence to ask for that price again.

I have also gone through a time of thinking, “How about I go with a model of ‘Pay what you think it’s worth’?” – it seemed a logical way to find out the number people will be comfortable paying me, but as has been pointed out to me, as above, some people will happily pay 2, 3 or more times what someone else will begrudgingly pay. If that higher payer finds out the other paid a lot less, how will that affect things, like your reputation? Better to pick a number and stick to it. Sure, offer referral fees, loyalty bonuses (eg a discount for pre-paying for a series of sessions in advance) but not wildly different from your “rack rate”.

There are plenty of “sales techniques” you can utilise to leverage more money, but consider how these sit with you and your cores values. Again, where is the sweet spot, the Goldilocks space between getting the life you want through being a coach/consultant/therapist and getting what you want from your clients? What you want from your clients may very well be more about positive impact and the emotional rewards of having happier-than-when-they-started clients – I hope it is more about this than paying the bills, but you still need to pay the bills as well.

You want to feel valued as much as anyone does.

So, as noted at the start of this post, there is no right answer – partly it is based on you own principles, and partly on your own confidence in asking for a given fee. I think it is perhaps less about what other people in your chosen specialty are asking for as they may all be following each others pricing and feel uncomfortable asking for more. Go toward the higher end of your comfort zone and see how your audience responds to that. You usually negotiate lower. I say “usually” as I once had someone offer me higher than my asking price for sales coaching and I jokingly explained how negotiating usually works. But that was a great example of how some people can value your work more than others. An ideal “ideal client” example.

It’s worth considering hiring a business coach yourself to go through all this – your confidence, defining your intended / ideal audience, SWOT-like analyses, when, where and how to find those clients and your mentality to using a variety of business techniques to attract custom which aligns with your own personal values.

If you find any of this of value, please consider buying me a coffee / plant 🌱 on my Ko-Fi page

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