subject: Justifying Coaching Fees through the Return on Investment [print this page] Justifying Coaching Fees through the Return on Investment
Oftentimes, coaching fees is an issue for prospective coaching clients. They wonder whether they will be able to receive the value of their investment on coaching. It is vital for all coaches, especially those who offer business coaching, to be able to appropriate the right value of the ROI or return on investment of the clients.
Provide a Value to the Benefits of Your Coaching Program
Every coaching program aims to improve an aspect of a person's life. The list can include professional productivity, better relationships, happiness, and what have you. Every aspect improved means a benefit and the failure to move ahead signifies cost.
Let's take health coaching as an example. The goal is to help the client stop smoking for a certain coaching fee. You can quantify the directly displaceable cost that is equivalent to the price of the cigarettes that he will no longer purchase. You can also include the avoided costs of medical bills that he may have incurred if he did not stop smoking. And lastly, you can quantify the costs of less-tangible matters like the peace of mind of the family because the client no longer smokes. You can also quantify the direct, indirect, and less-tangible benefits.
Have your clients determine the costs and benefits he can get out of the coaching program. Make them identify the aspects they are sure to achieve as an effect of the coaching sessions.
Justify the Coaching Cost through the Avoided Costs and Received Benefits
As you discuss the coaching fees to your clients, always remember that business decisions are made based on the computation of costs made against benefits. So remind your clients of the costs they identified as avoidable and the benefits they are sure to gain because of the coaching. Coaching always has more favorable return on investment than other types of expenses.
Determining Fees According to Estimated ROI
Now that you are aware of the ROI computation, you can use this method to set coaching fees. Have your prospective client identify the costs and benefits he will most probably receive as a result of the coaching session. Then let him identify the price he is willing to pay for your services. You may be surprised at the price your client will offer. This is a surefire way to build your coaching business.
