How Do You Charge for Value?
When you’re starting out as a business coach and have little experience doing the actual coaching and consulting it’s tempting to think about charging for your service by the hour. At Tricres, we tend to discourage that for a number of reasons. Because honestly? It’s a mistake most coaches and consultants learn the hard way. So, how do you charge for value?
There are more effective ways to charge for your services that reflect how you value what you deliver to clients and that in turn can make you a more attractive proposition to prospective clients.
So how do you go about pricing your coaching and consulting services? Charge too little and you’ll be overworking to achieve a decent income. Too much and you’re unlikely to have clients to work with.
Let’s take a look at ways of charging.
Yes, this is the simplest way to charge for your services as a coach and consultant. And it’s one most people are familiar with, it’s transactional, and if you did ‘x’ number of hours, you know what you’re billing for.
But there are definite drawbacks. Often it’s tricky to calculate how many hours a prospective client might require, which may mean doing 10 times the hours than you planned leaving little room for any other clients in a given time period.
It also means record keeping which clients may challenge the way we often see people challenge lawyers for their billable hours. As in, “Why did it take this long to do this one week, and twice as long the next week?”.
Additionally, you are physically limiting your earnings in any given week by the amount of hours you can do.
This is certainly a golden option and a far better opportunity for a coach or consultant.
When you can establish trust with a client, say by doing a Fact Find that enables a client to understand the value proposition you’re offering to them, and the achievable goals you can deliver, a monthly retainer that gives you consistent income for access to your services is the ideal.
When you have services that extend into programmes that can go into an ongoing ‘roll-out’ in large corporations, your retainer fees can go on for years to come.
As you gain experience over time, you can increase your flat-rate monthly fee to new clients and benefit from the predictability of income.
Before you think a retainer arrangement is perfect there is one caveat, and that is establishing boundaries with your client. Depending on the scope of your arrangement (and the fee being charged) it’s important to ensure that each client understands the goalposts:
- Who can contact you and when (office hours? Weekends? 24/7?)
- Method of communication (emails, texts, WhatsApp Groups, phone calls?)
- Whether you are providing ongoing advice or delivering monthly retreats, courses, workshops etc. for employees
It’s important to get specific to avoid becoming monopolised by any one client to be at their beck and call at the risk of being detrimental to other clients.
Flat Day and Half Day Rates for Product Offerings
If you have successful product offerings like leadership, self-development, and strategy courses that can be delivered in monthly or quarterly modules you can charge businesses the option of a flat day rate or half day rate.
It allows for complete transparency for a service being provided with no hidden fees, and an established outcome. As you are providing a product, it can be significantly higher than what you might consider charging as an hourly rate to a client when it’s curated, self-produced content.
Sometimes starting out can be just as daunting as a business owner who is adrift and needs professional help to get back on track.
Consider getting smaller businesses who might not have the big ticket budget to pay for a coach on their own.
But if done in a group with say five other business owners who have a similar focus at a lesser rate, the coach is still spending the same amount of time in a day and yet able to bill substantially more than doing it one by one.
It’s a great compromise and one we love here at Tricres using our CRESCO Programme for smaller turnover businesses starting.
The Bottom Line on How You Charge For Value
Ultimately what you charge is what best works for you.
Understanding the pros and cons of the various ways to charge for your services will help you build a successful coaching and consulting practice.
You need to understand that charging for the value you are bringing to the client needn’t be based on time where you end up micro-detailing how you’ve spent the hours being charged.
Base it on the value you are offering and how that will translate into deliverable results for their business using proven methodologies and sound expertise.
Tricres offers a Kick Ass Culture Coaching & Consulting Programme that gives aspiring and ambitious coaches all of the tools they need to succeed including how to set you up to succeed with your own practice. Find out more by attending one of our free live events by signing up for our next date here: https://tricres.ac-page.com/9-to-5