Setting prices
I’ve been shocked over and over in my 15 years of coaching by just how much people are willing to pay for coaching. There is a large amount of leeway for setting prices.
There is a jaw-dropping amount of money to be made with your coaching, consulting, or freelance work. And even if you didn’t get into the business for the money, you might as well be extremely well paid for the massive difference you can make in people’s lives. And…
Something else fascinating that I’ve discovered over the last few years is that the people that pay more tend to be better clients. They do the work, get the best results, are less “needy”, and are the most fun to work with. Why?
I think when folks make a big investment, they are saying to themselves and to the universe that making this change is extremely important to them and that they are willing to do whatever it takes. That’s a great place to start.
Getting high end clients sounds awesome, however…
Charging Higher Fees Can Be Scary!!
Charging big amounts can be scary for 2 main reasons…
Number 1: What if people won’t pay it? (Or what if there just aren’t people out there who CAN pay it?
I’ll teach you a super-secret “ninja move” straight out of my best selling program, Free Sessions That Sell: The Client Sign Up System called the “New Price Safety Net”
You can be sure your new ultra high-end fees won’t cost you any clients when you use this. The other fear about charging more has to do with your compassion.
Number 2: Am I turning my back on all of the people who need my help but just can’t get it because of their financial situation?
Don’t worry, there are lots of ways you can serve the folks that can’t afford your high end coaching fees (like group coaching, hiring associate coaches, creating and selling info-products, or just giving away super awesome content to folks on your list for free).
Remember, no matter how little you charge, there will still be folks that can’t afford to pay you. And no matter how much you charge, there are people who CAN afford to pay you (and will see your value and pay for it).
I recommend you re-read that last sentence and let it sink in. And then you can check out these 3 pricing strategies.
The 3 Ways to Price Your Services…
Number 1: The “Common” Price + Or –
This is what most people do and how I priced my coaching when I first started out. You take a look at what everyone else is charging for similar type of work and you price yourself in that ballpark – possibly a little lower or a little higher.
Everyone was charging around $300/month when I first started so since I was new, I started out at $197/month. Later when I was feeling more brazen, I raised my fees to $397/month. I felt like such a stud when I got my first few clients at this rate.
Now, clients are paying me over $100,000/year to work with me. Needless to say I don’t still price my coaching this way.
Pros: You know that the market will bear these prices.
Cons: You aren’t considering the needs or desires of your customers at all. You’re leaving a lot of money on the table.
Number 2: The “What You Need To Make” Price
First, you decide how much money you want to make this year. Then, you charge around that amount per hour.
Let’s say you want to make $100,000 this year. Then you would charge around $50/hour. (You are using 2,000 as the rough number of how many hours there are in a “regular” work year.)
Pros: You’re getting what you need and how much your time is “worth”.
Cons: This strategy doesn’t account for all of the hours that you are NOT working directly with paying clients, so you could end up with a huge short fall. If you go with this strategy, you probably need to double or triple your rate just to make up for all of the time you’re working on other stuff in your business (marketing and admin stuff). Plus, using this strategy you still aren’t considering the needs or desires of your customers at all and you’re leaving a lot of money on the table.
Note: Not very many people do this, but it’s a little more savvy than the “common price”.
Number 3: The ‘True-Value” Price
This is the only pricing strategy that actually takes the customer into account. True Value Pricing is really about the value of the results that people want to achieve.
What is the true value of a result? Of course that will depend on the individual. What would it be worth for someone that’s been single and lonely for years to finally have their soul mate?
What would it be worth for someone that’s been overweight for years to finally get thin and stay thin?
What would it be worth for someone that has an out of control child to turn his or her bad behavior around and have a peaceful home?
What would it be worth for someone to grow their business by leaps and bounds?
The reality is that these results often fall into the “priceless” category. Can you really put a price on love or health? Or course not. Or can you?
This is Priceless…
The great thing about results that are priceless is that you build a case for nearly any price.
What’s the value of saving your marriage? I don’t know. But I can look up online and see how much a divorce costs. Legal costs, lost assets, emotional pain for everyone, losing the love of your life, having to start over, the public embarrassment, failing, having to get out there in the dating world when you don’t really know how to date anymore, paying for years of therapy for yourself and/or your children.
Would it be worth $10,000 to save your marriage? $25,000? $100,000? More?
Or how about getting thin and staying thin? To someone that’s struggled with this their whole lives, it’s priceless. But, you could look up the extra cost of health care, the lost years of your life/lower life expectancy, possibly being single and lonely, the loss of confidence, getting passed up for promotions at work by a “looksist” culture.
And you could then look at the opposite side of the coin. The increased energy, confidence, drive, happiness, health, vitality, better relationships, and better job prospects of being at your best physically.
What would that be worth? $10,000? $25,000? $100,000? More?
Now, when you master the introductory coaching session process I teach (called “Free Sessions That Sell”), you really won’t need all of these frames of reference to prove the case of the value of your coaching. The client actually builds the case for you.
And you won’t need to talk anyone into being on the same page with you in terms of value either. They’ll take care of that for you. The reason I’m giving you these frames of reference is so that YOU can see the value for yourself so you can feel very comfortable charging a lot more and really start to see the “true value” of your coaching.
I think at a minimum for any significant result that you want to help anyone achieve, you should be charging at LEAST $5,000 for it. For some people that feels like a lot of money, but to me I don’t really consider that to be a high fee.
That might include 6 months of coaching with you or until the client gets the result (whichever happens first). They can pay $997/month for 6 months or $4,997 total if they full pay up front.
Another HUGE Pricing Mistake…
Another BIG mistake I see people make with their pricing is to offer 3 levels of service and let the client pick which one they want. For example, many coaches will do something like this…
- $200/month for 2 session/month
- $300/month for 3 sessions
- $400/month for 4 sessions
In theory, this makes sense. You give people options and they’ll likely be thinking “which one do I want?” instead of thinking “should I buy this or not?”
Here’s why it doesn’t work….
Clients don’t know how much coaching they need. They are just going to be deciding based on the price and their budget. And in my experience most people choose the lowest amount.
If you want to give people a choice, simply give them the choice to full pay for 6 months (or a year) or to pay monthly payments (ex: $9,997 up front or $1,997/month for 6 months).
Finally, if you do want to offer different levels of service (such as the option to work with you for 1-1 coaching or the option to join a group coaching program), do it this way…
Start with the option that is the #1 best thing for helping them get results (which should be your 1-1 coaching), which should be the highest priced option. Let them pick full pay or pay plan. And if they say “no” to both payment options because of their budget, then you can offer them a second, less expensive option.
Say, “I have another option that might be a better fit for your budget, would you like to hear a little bit about it?” (This a “Magic Phrase” straight out of “Free Sessions That Sell).
It works really well and goes hand in hand with the “New Coaching Fees Safety Net”.
How to Try Out New, Higher Prices Without Fear of Losing The Sale…
At this point, I hope you’re on board with the idea of receiving higher coaching fees. And you’re OK with serving folks that can’t afford your 1-1 coaching in some other way (like offering group coaching, online training programs, or giving them great free resources via your email newsletter).
The only questions you may have right now are…
1. Where do I find these high-end clients?
2. Can I really deliver the results people are paying so much money for?
3. What if I charge a lot and no one says yes (and I scare away clients that would have hired me at my old rate)?
As for #1, I’m going to show you where to find high-end clients and give you a super hot “Instant Client-Getting Tool” in my next video and report.
And for #2, can you really deliver? This part usually comes down to confidence and competence, which are outside of the scope of this article. However, I have a powerful coach training program (the Rapid Coaching Academy) that will give you the tools, competence and confidence to help your clients get powerful results quickly.
Finally, for #3, how to make sure you don’t lose out on clients because of your new higher fees, use the “New Coaching Fees Safety Net” from my “Free Sessions That Sell” program…
Here’s how it works. At the end of your intro session, when you mention your coaching fees (X for full pay, Y for monthly payments), say “Which of these options feels like the best fit for you?”
If they pick one of the payment options, you’re set. The client is going to sign up – even at your new ultra-high coaching rate! Hurray!!! However…
If they say something like “Wow, I’d love to work with you, but there’s just no way I can swing it financially right now”, that where you’re safety net comes in. Just say…
“OK. I understand. What would be an amount you would feel totally comfortable moving forward with?”
If they give you a number that’s as high or higher than your old rate, you can say “yes” (or no, or can we meet somewhere in the middle). Or you can say, “I have another program that might be a better fit for your budget, would you like to hear a little bit about it?” and then offer them group coaching, or an online training program, or a chance to work with a coach on your team.
In fact, this safety net can be used to win over most potential clients regardless of how much you’re charging. This one little technique can help you double or triple your client sign ups!
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