How to Calculate Hourly Pay: Rates for Career Coaches

Dear C.J.,

I’m getting started as a coach and wanted to get your thoughts on how much to charge for my clients? Do you have any thoughts based on your experience?

Samuel

Samuel,

I discovered with my coaching practice that setting pricing is essentially no different than setting a value for your perceived self-worth. The biggest mistakes I see are that folks undervalue themselves when they start off.

As a starting coach, I was a bit insecure and wasn’t sure I could command even the lowest range that was being offered ($75/ hour) to coaches. I didn’t have any coaching experience, and in my mind, I couldn’t justifiably charge the same as another practicing coach. What I discounted was that I had a ton of life experience and experience working as a life coach and that does make a difference.

Initially, I played it safe and started with coaching friends for free and any new business (friends of friends) I would charge $75/hour. The coaching with friends was really rewarding and fun. It was a nice way to deepen their friendship and they were really respectful of my time and very encouraging with the help I offered. The only tricky part is that often the friendship and coaching line can be blurred. Sometimes social dinners with friends could turn into one-sided coaching sessions versus a balanced friendship. That became less of an issue over time.

The new clients that I charged $75/hour didn’t work out as well. I had an uneasy feeling, due to the pay cut I was taking by moving from a marketing consultant to a coach. My previous hourly rate was much higher and I felt I was going backwards in my career, even if it was justified that I was just starting off. This lower price affected my coaching practice, too. At this low rate, I encountered bargain shoppers who haggled about price and just wanted to try out coaching for fun. My clients were less coachable, too, as they often forgot or didn’t even show up for appointments. And, sometimes, they never even paid me. Overall, I had a pretty unsatisfying experience at this rate. I felt bad about myself, and wasn’t happy with the clients I secured and their behavior.

As a result of feeling undervalued and bad about my lowered value, I decided to raise my rate to $150/hour after the first three months, just to raise my own self-esteem. Oddly, my clientele improved dramatically. I was getting responsible, motivated clients who did not haggle over price. As these clients had more skin in the game, they worked harder to make sure they got value out of their investment and showed up for their appointments. Occasionally, I’d be moved by a client’s story or compelled to help and lower my price. However, if I offered a price discount it was received with appreciation versus trying to squeeze me down lower. Plus, I felt good about doing the work because I felt my work was appropriately valued.

While you may have to go through this journey and experiment yourself, remember not to undervalue yourself. My hairdresser once shared a story about prices for high-end hair dressers in NYC that would charge $500/haircut that seemed absurd and, at the time, was the high mark for a haircut anywhere. However, the bar was raised when this same reputable NYC hair dresser moved to LA and decided he wanted to work half as hard and charge $1,000 per haircut. Oddly, his book of business got higher as his perceived value when up. Price is a funny thing. Make sure not to undersell yourself.

Sincerely,

C.J.

Comments

[Julie]

CJ,
What great advice! As an inventor with a new product, the hardest thing about the whole process was determining the price. When my costs went up I was forced to raise my prices and was surprised to find that I was getting more orders at the higher price, even in a recession/depression.

You're right about the clients becoming better with the higher prices. They are more likely to appreciate the value you bring.

Thanks!

Best,
Julie Austin
Author of "The Money Garden: How to Plant the Seeds for a Lifetime of Income"

[Nutritionist Brisbane]

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[Garden Seeds]

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[Bridget Quigg]

Dear Out of Work for a Year:

I'm not C.J., but as someone that wrote a book about networking, I can't help but chime in here:

I say don't throw away the valuable sales and/or industry knowledge you have. Instead, follow your gut and start a direct networking effort by identifying a few industry associations that have in-person events and/or an online presence so you can activate a new network of contacts (do google searches, look in Meet-up, check out the Groups on LinkedIn).

Set a goal to spend about a 1/2 hr each week exploring and contributing to the online groups and also try to attend at least one event a month for in person groups or associations. Get involved (volunteer to help with an upcoming annual event or writing tips for a newsletter) if you can and you'll make some new contacts before you know it.

Good luck to you!
Sandy Jones-Kaminski, Author
"I'm at a Networking Event--Now What???"

[out of work for a year]

Hi there, I'm from the institutional asset management marketing/business development world where I have supported and been in the sales function since 1993. For a period of 6 years I was actually doing institutional sales, but the company succumbed to losses starting with the tech bubble, then take overs and finally in 2004 I left. I called the boss before THAT and asked for my job back, and got it. It was hard to take a subordinate role again, but I tried to add value in other ways, and the new stringent compliance environment reeally gave me lots to do that not many at the firm appreciated I was protecting THEM from. In the end I wasn't doing any thing but the most mundane business development stuff (RFP's and I did them excellently), but no face to face stuff anymore.

I've been out of work a year, losing this latest job due to a succession plan/new boss who didn't see me in the picture. Its ok, I didn't see myself in that picture, either. Still the go away package was not generous and I've been living on savings for many months. I need a job soon... here is my challenge.

I've been away from sales so long,that my contacts have all changed from the previous go around. Also, my name is no longer "out there" and reputation is everything in my very narrow field. Also, younger people are coming along with fantastic and expensive advanced degrees and I can only offer basic education plus my experience. How do I leverage what I have into a job doing sales? Because I need to work now, I actually signed up with a life insurer (a big one) to be doing something, but I'm kind of embarassed to tell my contacts what I am doing. I'm still on their costly training/agent intake program and my previous boss (who is retiring) told me I'm way beyond this job.

Not sure whether to invest MORE into this or keep looking. Should I try to reach out to develop more contacts in the institutional world where I was once plugged in? I feel tired and discouraged and I'm on every job board out there. I'm thinking of taking all my profiles on job boards down and starting afresh with a more direct networking route. Any advice?