Raising Your Coaching Rates with Howard Mann and Melanie Benson

Howard Mann:
I probably started out using the therapist model of what do I charge per hour, and became frustrated by that for a couple of reasons. One, nowadays, I don’t think that it works as well for coaching to just talk to somebody for an hour, or 45 minutes, or 90 minutes and say, “Sorry, our time is up and I’ll talk to you next time.” I just don’t think life and business fits neatly into a coaching call once a week, or twice a month, or whatever it may be. And so I started to feel that that model might work for somebody, but it doesn’t seem to resonate with people who have things that are coming up during the course of a week, in a world where a quick text, a five-minute phone call, a quick email exchange might really give them some help and extra value.

And so, when I stopped thinking about hours and just focused on outcome, my whole thinking about what I was charging needed to change, because now I’m no longer counting hours. And I started moving towards, this is what I charge for a month, we are going to talk for this much time every week, but I may come in and sit down with your staff just to see how that’s going on. And I may want to sit down with you and your spouse so that we can have this conversation about your future. I want you to text me on a Sunday night if you’re freaking out about a big pitch, or a bank meeting that you have, or somebody decided to quit, or you’re going through a tough time. And I wind up, with most of my clients I am still in touch with. They reach out from time to time and just want to have a catch-up or they just need to air something out.

We can speak in shorthand. I have felt that that has all made my fee irrelevant. I still try to do it within the confines of what I also understand about their financial ability to pay. I’m not looking for somebody to go into debt, overpaying their coaching fee. Different people can pay different things. Again, candor is helpful here and to just say, “This is what I charge.” If you really feel like this is somebody you want to work with, I have said, “This is what I charge, but how about we spread it out over a longer period of time, or how about you pay me that, you pay me less, but at the end of the year, if you get to this point, you’ll pay me what we agreed to.”

Shawn Hesketh:
Focusing on outcomes instead of your hourly rate allows you to shift the conversation to the value you bring to the relationship, and that value informs the way you set your prices early on. But it’s more than just a number, it’s a reflection of the tangible value we bring and the promise we’re prepared to deliver on. And that becomes a tool for marketing your coaching business.

Howard Mann:
There is some degree, early on, in your price needing to reflect your level of experience, and confidence, and capability. If you are not able to create the change that you’re promising just having a steep price because you think it makes a comment about your capability, you’re going to be found out. The best way to get more business and more clients is a referral, and the best way to get that referral is to blow away their expectations. And so your price becomes a reflection of the results that you create for somebody.

I think within that, we all have a little bit of an imposter syndrome about what we think we should charge based on what we think we’re actually doing. Another byproduct of really pushing yourself to say, “How much value can I create?” And if I can’t create enough value, what new skills do I need to learn? What new things do I need to master? How do I need to refine my offering or the results that I can create and how I’m going to create them, so that I can create so much value that my price is not even a discussion? And within that, something that was taught to me a long time ago, which is that if you double your price and lose half of your clients, you’re still in the same place, but you got a lot of extra time to create better results for the clients that are left and are paying you more.

Shawn Hesketh:
Both the actual value you deliver and the perception aligning with what you cost, act as factors for determining your pricing. This is something that Melanie Benson an authority amplifier and coach uses for her coaching practice.

Melanie Benson:
And actually monetization is a huge differentiator in your market. I am known as somebody that is a premium deliverer. People know that Melanie has high ticket programs and you are going to invest in her 22+ years of wisdom and experience, and her cutting edge track record, but you’re also getting Melanie’s unique blend of consciousness, and spirituality, and empathy, and connection along with things that are proven to work. I’m integrating that, that’s what people know they’re getting from me.

Shawn Hesketh:
But most of us won’t be able to start out charging a premium rate right off the bat. So you may find some inspiration in Howard’s philosophy of self value and how he carries that into the way he reevaluates his prices.

Howard Mann:
There are a number of ways to approach this, but you need to make sure you have the skillset. And if you don’t, that’s totally cool. You should never stop learning, there’s always more to learn, there’s always lots of ways to get better at conversation, at probing, at good coaching questions, about listening skills, about having experiences that you can bring to your coaches, about reading so that you can bring ideas to your clients and move that along. And realize that it’s okay to have a path to say, “I’m charging this much per session now, or this much per month now, or this much per year.” And my goal is to get to three times that and then to say to yourself, “What do I need to be able to do and deliver for clients, so that new price is an easy yes?” And it’s going to be some combination of the results that I give, the value that I create, the experience that I give them, the time that I’m going to put in with them and my ability to create those results as quickly as possible.

I don’t see value in just trying to count hours. Somebody once told me that you’re never going to get rich selling your brain by the pound. So it’s an important factor to say, “Look, I’m not selling you hours here. I’m selling you an outcome. And I’m selling you this picture that we just sat for a few hours and painted.” That’s success, and so now you have somebody who’s going to hold that vivid picture that you created of your perfect future, and we’re going to work on getting you at least on the path to there. And you’ll tell me when, “I think I know what I need to do,” and you call me when you need me.

Shawn Hesketh:
All right, how would you feel if you could double or triple your rates? As exciting as that possibility is first, you need to know how to communicate your value to your prospects. And Melanie’s four steps offer one way to show your worth.

Melanie Benson:
First of all, you have to have some demonstrated results. Secondly, you have to be willing to showcase your authority. And this is an interesting conversation, because a lot of people don’t necessarily see themselves as an authority, they don’t even necessarily see themselves as an expert, they see themselves as someone who does a thing and gets paid for that. When you are going to elevate your price point, you had to be willing to showcase your authority. I’ll demonstrate this through a client of mine. We’ve been working with a client for just over a year now in the Atlanta area, and he’s known as one of the premier celebrity benefit auctioneer. So you go to some nonprofit fundraising thing and he’s the guy on stage running the raffle, or running the fundraising element. And he was getting paid okay rates, but he had hit a ceiling cap on his revenue, and I suggested that we double his rates, and he about fell out of his chair and he thought, “No way am I going to be able to raise my rates. I’m already at the top of the market here.”

And I said, “But not if you’re an authority.” And he was very intrigued by this. And one of the first things we did is, we looked at how he was positioning who he was and what he did through all of his marketing elements. And I worked with him to do seven key things to go from being one of many to being the only one. So that meant we had to look at his messaging and make sure that his messaging was congruent with that. We had to look at his, I call it signature frameworks, having a signature framework that only you do, which just threw things off the charts for him. Every client was like, “We got to do that at my next event.” But the big thing was I said, “You can’t charge what everybody else is charging.”

You have to start charging a premium rate. And he wasn’t sure it would work for him, but it did. We went from him charging five grand to 7,500 to 9,500 now, and he’s breaking 10 K with new clients. And they’re paying for it because, and this is the key to making it work, is the value proposition is easy. If you don’t understand the value of the outcome, whether that’s solving a problem or delivering a result, it’s very hard to establish your authority and to command those higher prices. And this is a mistake I see a lot of my new clients have been making that they’re frustrated by. They’re like, “How do I do raising my rates?” It’s like, if we shift the way you’re positioning things, the clients you’re attracting are going to be more in alignment with paying those higher rates. And every time they’re surprised how quickly it works.

The fourth thing I forgot to almost say is visibility. You want to have visibility be a part of that with that consistent magnetic message, because when people start to see you in a more elevated role, like you’re speaking at an event, you’ve published a book, you host a podcast, there’s this subliminal little trigger in the prospect’s mind of, “Look, they do this thing.” And it’s not that you have to be ego about it, it’s just simply a shift in positioning of you hosting something that people enjoy, creates a dynamic of, “They know their stuff. They have authority in this area.” And it helps reinforce with that consistent visibility presence.

Shawn Hesketh:
As a coach, the way you communicate your value is incredibly important and it’s directly related to the types of clients you draw in. And that communication informs the way you talk with your clients about raising your rates.

Howard Mann:
If you can help somebody really articulate their future, and when they paint that vivid picture that we talked about, I do include, how much income are you making? How much more is that much you’re making now? How much do you have in the bank? How much do you have saved up for retirement? At some point, there is some value in that I’m going to change how they feel in their life and in their business, but at some point, just to be realistic, money counts. And so for them to say, “I want my income to triple. And I’d like the amount of savings that I have in the bank to double, and I’d like the value of my business, should I ever want to sell it, to be X dollars.” And when you can figure out the delta between where they are now and where they want to get to, and there’s no guarantees you’re going to get to there, because things can take a couple of years or a year or so, that there’s a value to that, there’s a measurable value to that.

And if you add some additional value to the fact that they’re going to be less stressed and have more time off and more money to go on vacations, or money put to their college savings for their kids, or spend more time with their partner or spouse, that has a value. But if you don’t clearly show that value, if you can’t get to the point where you are just laying that out… I’ve had coaches call me on the phone and in 15 minutes they think by saying, “How much more would you like to make for your business?” And I say, “I’d love to have this.” “How much is that worth to you?” “It’s worth this.” “Then my fee seems a piece of cake because I just showed you that I’m going to give you extra a hundred thousand dollars a year, so my $30,000 fee shouldn’t be there. Isn’t that a good trade?” And they forget the point of, you just made all that up.

You just move me to come up with a fictitious number without ever building enough trust of showing me how I might actually have any confidence that you’re going to get me there. You don’t even know the why behind it, you’re not going to get there in 15 minutes, even though that’s what it says on the coaching sales script. People pay based against the value that they perceive. And I have always found that if you can demonstrate that you are going to be able to deliver 10 to 20x whatever it is that you charge in value, people will opt for that any day of the week.

Shawn Hesketh:
Still, articulating the value you bring can feel personal. And the anxieties that come up when you’re considering raising your rates can make you vulnerable to so much self scrutiny and even imposter syndrome, but you’re not alone in feeling this way. Melanie shed some light on the personal side of valuing your coaching.

Melanie Benson:
Let’s dig a little bit deeper into value proposition. Value proposition, and I’ll talk about it through the lens of this client I worked with. I had my client go back and pull every event that he had facilitated for a two-year period. And I said, “I want you to look at how you impacted their fundraise. What was the number they were shooting for and what number did you help them achieve?” And in 90% of the cases, he had over a 500% ROI from his fee to what was raised in that room. Value proposition basically means you know the value of what you deliver. So in his case, he drives fundraising revenues up for his clients. They are never going to be able to create that same kind of impact in the room with someone else or on their own. He knows what he brings. So that gave him confidence when I said, “What if we double your rates? What’s the ROI for your client?” It was still massively valuable. It was still an easy yes to pay him 10k versus paying him 5k.
Give you another example. I have another client who I’ve been working with her on how she positions her VIP day. And in her VIP day we were talking about pricing. And she said, “I don’t know. Can I get 4k to do a VIP day?” And I said, “Who are your ideal clients and what are they struggling with?” And her ideal clients were launching offerings and not getting the results they were hoping for. And I said, “{What would a typical client revenue improvement be if they hired you to help them organize the launch instead of doing it on their own?” She goes, “On average they get 10k more in sales.” Would you invest four K to make 10k? Of course, we’re going to do that all day long. You can’t even get that in the stock market. Value proposition means you can start to look at the value of the solution you provide and say, “Would my ideal clients be willing to pay this to get that outcome?”

Shawn Hesketh:
With all this talk about raising rates, you might be worried about losing your clients, or missing out on opportunities. So Howard offers an exercise that might help.

Howard Mann:
I’d start by asking the coach to have an honest conversation with themselves about where they want their income to be. This conversation around rates is about income. The coach has to have an honest conversation and say… And I’m just going to use round numbers here for the sake of conversation. My coaching practice is currently making me $75,000 and I’m feeling stuck there. Last year it was 71,000, this year I’m projecting it’s going to be 80,000 and I’m feeling stuck. And so, the first exercise to do is to force yourself to think bigger and say, “Just for the sake of a mind-expanding exercise, I’m going to multiply that number by 10 and say, ‘what would it take for me to do to make $700,000 a year?'” And after you stop freaking out about that mind exercise, writing down a long list of the things that you would have to do in order to deliver enough value to make that kind of money, there will be things on that list that you can say to yourself, “I could do that today.”

There will be things on that list to say, “I need to pick up some skills in order to be able to do that,” or, “I need to change and adjust the way that I’m doing things, just for the sake of clarity on some numbers.” If you say, “I’m currently charging a thousand dollars a month for my coaching. And I need to charge…” I’m going to start charging $10,000 a month for my coaching, and I’m only going to work with 16 clients, whatever it may be, or 10 clients, what do I need to deliver for those 10 clients to make that fee irrelevant? Now, my numbers could be large, small, it could be that somebody wants to go from a thousand-month dollars to $2,000 or whatever it may be.

But you have to have an honest conversation with yourself about, who do I want to serve? What experience am I going to give them? And if you look at that list of the things that you’d need to do, if you can do a lot of those things, then you’ll get comfortable like, “That’s really worth it.” If I’m going to move somebody from this from point A to point B, and point A is where they have a sad face on, and point B is where they have a happy face on, what is that worth? And really try to quantify it. The nice part about multiplying your income times 10 is that you don’t have to get there tomorrow. If you can say, “Maybe that’s just my 10-year goal.” Or my five year goal. And so now I have my starting point of 70,000 and I have my end point of 700,000 and I want to get there in five years or 10 years.

Now I’m going to reverse engineer that. Where do I need to be a year from now to be a 10th of the way there? And I’d like to be at 150,000. So what does that mean? Do I double my fees or do I double the amount of clients that I have? I would argue that if you double your fees and lose half your clients, you’re in the same place, but you won’t lose half. And everybody that you’re talking to new, just have the confidence to say, “This is what I charge.” No hesitation, no crack in your voice. This is what I charge. I charge $5,000 a month for my coaching services.

After you’ve built up enough trust, after you’ve helped them paint that vivid picture of the future they want, and after you’ve said, “Do you want me to help you get there?” “Yes.” “I charge this.” With confidence, without a pause and just have that confidence in the gut. This person just described to me an incredible life where they’re going to be making a lot more money and enjoying their life a lot more. That’s worth something. I’m going to help them make that happen. Don’t feel bad about getting paid for it.

Shawn Hesketh:
Howard absolutely hits the nail on the head. Coaching provides incredible support to your clients, and there’s tremendous value in the work you’re doing to help others. So while it can feel daunting, raising your coaching rates gives you the opportunity to grow your business and give even more back to the clients you work with. And Melanie’s first steps create a great jumping off point for marketing yourself at your value.

Thank you so much to both Howard Mann and Melanie Benson for sharing their insights and experiences that can take you to the next level of your coaching journey. Thank you for joining me on this episode of the Coach Factory Podcast. I look forward to hearing the ways you take your coaching business to the next level by raising your rates and your value as a coach. This episode of the Coach Factory Podcast was produced with the support of Come Alive Creative. To listen to more episodes, get the show notes, and learn how to start, run, and grow your coaching practice, visit CoachFactory.co.

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