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Life Coach Salary: 15 Reasons Your Coaching Fees Are Too Low

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Life Coach Salaryby Julia Stewart, MCC

Last night, I taught a Q&A tele-webinar on How To Set Your Coaching Fees for my clients, students and guests. They asked great questions and I know the class was a real eye-opener for them.

The class was inspired by questions from one of my Elite Mentor Coaching for High Achievers clients and is also included for members of the new Just In Time Coach Training and other School of Coaching Mastery Programs.

Bottom line? Life coaching is an expensive, highly personalized,  high-end service. Attempts to make coaching more affordable and hopefully, easier to sell, tend to fail. Compass Coaching is an example. All logic to the contrary, sometimes a service sells more easily when it's expensive. (Just ask a behavioral economist how logical people are about spending money!) And of course, all of this applies to business coaching and executive coaching, as well.

Long story short: if you missed the tele-webinar, or even if you were there, here's a list of 15 reasons you're coaching fees are probably too low. I've divided the list between A. Your probable reasons for undercharging, B. Why that doesn't work for your clients, and C. The reality check. I hope it's helpful!

A. Why You Charge Too Little For Your Coaching:

  1. You don't see the value in coaching. This is way more common than you might think. In fact I didn't see it until I'd been coaching a while. What changed? I worked with incredible mentor coaches who helped transform my life. Then I watched myself transform my clients' lives. Then my clients started saying things like, 'If I weren't paying you $350, I'd find a way to pay you $10,000!'
  2. You have a disempowering story about why people won't pay you more. Yes, a lot of people have been out of work for a long time. But 90% are still working and many of those are making more money than ever. And coaching continues to be the 2nd fastest growing profession in the world. But those are generalizations. The truth is, people who see for themselves the value in coaching will find the money to pay for it. For example, if you're a career coach who has a great track record helping people get hired, an unemployed person will pull together the money to hire you.
  3. You're trying to sell coaching to people who don't value it. For one person, $25 per month will be too much to pay for coaching. But for someone else, anything less than $500 may be too little, because they want the best coach they can afford. Like it or not, people frequently measure how valuable something is by how much it costs. And in the case of coaching, clients actually put more effort into their own results when they pay more, because they want their money's worth. So don't waste time on the 'client' who's interested in coaching with you, but not interested in paying, unless you sense they are that rare person who will knock themselves out even if you coach them for free - and you really want to coach them.
  4. You don't think you're worth it. Okay, let's say you're a new coach and you've seen the credentials and track records of your competition. Pretty intimidating? It may be tempting to compete on price, but will that really satisfy you? A better strategy is to do everything in your power to get results and credentials as quickly as you can, so you can compete, period. Coach a lot of people for free for a set period of time, but be sure each client knows you want a testimonial from them in exchange. Become a certified coach quickly. Join the IAC and ICF.
  5. You're trying to coach too many people. When I first became a life coach, I thought 30-40 clients was a full coaching practice. And to make a good living, I really did need a lot of clients, because I was only charging $100-200 per month for each. That left me in a chronic state of always needing more clients. I wish someone had told me that most successful coaches have less than ten clients
  6. You don't know how much money you need to make. As I showed my class last night, your coaching fees aren't your life coaching salary. When you subtract the money it takes to make money, including your business expenses, taxes, and benefits you'd normally get from a salaried position, it takes a lot more money than you might think, especially if you only have 6 clients. Be sure you do the math.
  7. You want to coach low-income people who could benefit from coaching. Nothing wrong with that, unless you put yourself out of business. Better to charge a fee to most of your clients that's high enough to allow you to offer some scholarships. You can also volunteer your coaching services to an organization that provides coaching to low-income people.

B. Why Charging Low Fees Doesn't Work For Your Coaching Clients:

  1. People perceive life and business coaching as a highly-personalized, high-end, expensive service. That's what they're looking for and it's usually what they want to buy. When you charge less, you look like a bargain-basement coach (who may deliver bargain-basement results). One-to-one coaching delivers dramatic results and if the price tag is inconsistent with that, you run the risk of confusing people (and confused people don't buy).
  2. When people buy a high-end service, they're saying to themselves, 'I'm worth it!' That feeling is what they want. And when someone decides it's time to get a life coach to help them upgrade their life, that feeling is a big part of their resolve. They may actually be disappointed if you don't charge enough to make a statement that from now on, things will be different for them.
  3. People want their money's worth, so the more they pay, the more value they'll get. Your high-paying clients will work harder and achieve more. And you'll be less likely to slack off, too. As one of my colleagues told me, every time she signs on a client with her new higher fee, she thinks, 'Holy crap! Now I have to deliver that much value!' and that's a good thing.
  4. Your clients deserve better service from you. I tell my clients that it's my goal to give them exactly what they need. They're all high-achievers, so I'm confident they won't become needy just because I'm extremely supportive. But a coach who's trying to make a living with 30 low-paying clients is spread too thin between serving clients and constantly needing to market and sell in order to keep the numbers up. That means less attention for each client. And it may mean that you're needy, because you always need more clients. A needy coach is never at her best.

C. The Reality Check:

  1. Coaches worldwide average around $200 per coaching hour. Even if you choose to discount your fee, you don't need to charge a lot less than that.
  2. According to Sherpa Coaching, most professional coaches average just six clients per week. That means each client needs to pay a hefty fee in order for the coach to earn a substantial salary.
  3. Even if you have only 5-10 coaching clients, you will need to spend some time and expense on marketing and sales and you need to be paid for your entire week, not just the time you spend coaching.
  4. When you add up what it costs to be in business, including business expenses, income tax, retirement investments and, if you live in the US, health insurance premiums and 100% of you Social Security and Medicare payments, you may find that earning a $100,000 take-home salary from coaching may easily require $150,000 in annual income.

Well there you have 15 reasons why your life coaching fees are probably too low. What are you going to do about it?

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Awesome post. I think other service providers can also learn a lot from this post. It all boils down to certainty, belief and value for any high end service or product.  
I know I sound like a broken record, but you forgot one important thing. To sell high end services a person MUST learn to sell and sell well. One of the reasons why coaches fees are too low, is they just can't or won't sell. They want to rely on their marketing to sell and we have already established that has it own problems. I am sure you have heard me say "you can charge what you sell" What I mean by that is the fee that you can charge is limited by your selling skills. The points you make certainly must be in place as well, but in the end, coaches have to sell. Lucky for me, my mentor taught me this pretty early on. After some resistnece, I followed instructions. (I wrote a blog post about it a couple weeks ago. And thank goodness I did, my coaching fees are higher than most, I have no problem getting clients and I get to do what I was put on the planet to do. None of that would be happening without some really great selling skills.
Posted @ Thursday, October 11, 2012 3:27 PM by Mattison Grey
Thanks Mattison - You know I agree with you! And, we've also talked about how business owners need the same skills to sell a low-priced service as a high-priced service. Coaches usually already have the skills to sell well, they just don't know it. Once they know how to apply those skills to selling with integrity, it feels as easy as coaching feels to a master coach.
Posted @ Thursday, October 11, 2012 3:37 PM by Julia Stewart
Thank you for your informative article as it is very timely for me. I have been going back and forth on fees for my business and have been focusing primarily on providing free to low cost services. I really would like to keep "giving back" in my business model, however with my track record and the feedback I have been getting from clients, I now realize that this is the appropriate time to implement a higher fee scale. I am in the process of developing my first seminar and have been doing some research to determine how much I should charge, per person, for a 4 hours seminar/workshop. I was shocked to hear from my clients that they would be willing to pay $300+ to attend one of my seminars, so I am going to go with that. I am very confident in my skills, but as a new business owner, recently laid off from corporate America, it has taken me a few months to figure it out. Thank you for the great information!
Posted @ Friday, October 12, 2012 12:46 PM by Suzanne Hochman
Great work Suzanne - I'm glad this post was useful to you!
Posted @ Friday, October 12, 2012 1:17 PM by Julia Stewart
This is helpful. Is there some kind of "salary grid" that would help coaches see what others are charging relative to their accreditation, training, years of experience, etc?
Posted @ Saturday, October 13, 2012 2:38 PM by Alvin Lau
Glad it's helpful Alvin ~ Read some of our other blog posts that contain the words, 'Life Coach Salary' in the titles in order to get more ideas about what to charge. They might help. However, I suggest you try to move away from comparing your fees to the fees of others. In coaching you can and should charge what you want and what you're clients want to pay you. Every coaching business is unique.
Posted @ Saturday, October 13, 2012 6:00 PM by Julia Stewart
Thanks Julia for that insight.
Posted @ Saturday, October 13, 2012 6:02 PM by Alvin Lau
I have learnt from experience that when the first thing someone wants to know is "how much is it going to cost?" he or she is not likely to become a client. At ths same time, a great lesson I learnt once in sales was that when someone leads with that and I say, nicely, "is price the most important thing for you?" there is a possibility of having a conversation about value - a possibility. Thanks for a helpfully provocative post, Julia.
Posted @ Monday, October 15, 2012 4:14 PM by Des Walsh
Terrific Des - An important point to remember and an awesome response to a common sales issue. Thanks so much!
Posted @ Monday, October 15, 2012 9:44 PM by Julia Stewart
What a great piece of insight Julia. As someone who is in Sales for over 30 years and a Change Agent/Coach, it is clearly apparent to me that the client often buys on emotion!  
They want to feel good about their purchase whether it be a new pair of shoes, a new car, or a session with a coach. And the most important part of feeling good for many clients is the feelings of getting good value, not price. So selling them on the value you offer them as a coach guarantees you the ability to charge what you are worth. As a sales coach to coaches, I often ask them what they would be willing to pay if they could have themselves coach themselves. I remind them "THEY ARE WORTH IT"!
Posted @ Sunday, October 21, 2012 10:34 PM by DW Starr
Nice distinctions DW - Yes, there's a lot of emotion in buying and like everyone else, buyers want to feel good. Logic tells them they want it for less, but logic won't feel as good as knowing that they just bought something that has tremendous value. Thanks for sharing your insights!
Posted @ Monday, October 22, 2012 8:07 AM by Julia Stewart
Very thought provoking, Julia. Knowing now that most coaches average six clients per week, I can see that I need to make some big changes in the way I market my coaching.
Posted @ Tuesday, November 06, 2012 4:24 PM by Tom Robinson
I'm glad it's helpful. And yes, this info can save a coach from the chronic client treadmill.
Posted @ Tuesday, November 06, 2012 4:52 PM by Julia Stewart
Breakthrough Academy facilitates Advanced Courses and Personal Coaching in Relationships, Health, Wealth, Career & Business and helps people to find individual solutions to many of life's problems. 
Posted @ Thursday, March 14, 2013 6:34 AM by Life Coaching
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