Are you charging enough for coaching? And how to fix it

There are a number of business models endurance coaches can implement in their businesses. Lately I've been talking to coaches about their pricing for their one-on-one coaching. There have been two common themes or problems. 

The first is coaches pricing their services too low. And the second is that their pricing isn't clear enough. The customers don't know what they get for the price that they are charged.

In the video I go into more detail about these two problems and how to rectify them while creating the least amount of friction with your existing customers

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1. Pricing is too Low

Let's look at our first problem -- pricing too low. Typically this happens when coaches think about affordability rather than the cost of delivering a service.

They're concerned that their customers might not be able to afford the price that you want to charge. The problem with that is affordability is irrelevant to a services business if it's going to cost you a certain amount to deliver a service. So, then, instead of the athlete paying you to do the coaching, you end up paying them because it costs you more in time and other expenses to deliver the service to them.

Normally, this doesn't become apparent straight away because coaches often don't calculate how much of their own time they spend with an athlete. Not only does it cost them time, but there is also an opportunity cost -- what you could be doing with your time if you weren't coaching an athlete.

A good exercise is to spend a month writing down all of the time you spend with each individual athlete to figure out total time for the month you spend with that athlete. You should include everything. When you are thinking about the athlete, writing their plans, actually meeting with them, talking to them on the phone and sending them emails.

You should get pretty detailed in your time recording. Then you figure out your hourly rate by just dividing the amount you charge them a month by how many hours you spent.

It's really difficult to set pricing for services because you need to balance affordability with cost. But it will become way more obvious when you determine how much time you spend with the athlete.

I think lots of coaches will be shocked about how low the hourly rate is for coaching an athlete when all is said and done. 

2. Pricing Isn't Clear.

Problem number two is that the pricing isn't clear.

I often hear from coaches that some of their athletes take up a lot more of their time than other athletes. Some athletes phone you every day and want to talk for half an hour. And some might not phone you at all, and you spend a lot less time with them.

What could go really wrong there, if you have a lot of athletes that take up a lot of your time -- normally, the issue is there because it's not well described in your business exactly what the athletes get for the money they pay you. 

Some people will take as much as they can, and others will hold back. That's going to lead to resentment from you if people are taking more than what they're paying for and possibly resentment from your athletes if they don't feel comfortable asking for more for their money. 

For example, if you're on X plan, you get one email a day or a 30-minute chat per week. Whatever or however you want to figure it out so that everyone is clear what they get for their money.

However if you've got either of those two problems, it's very difficult to get out of that. What if you've already got 20 athletes and you're already charging them a fixed price, how to you retrospecitively fix a broken pricing model?

Strategy to Restructure Your Pricing

Here's a little strategy to remodel your pricing and the best way as not to upset your current athletes. 

You might just have one coaching price at the moment. Everyone just pays a few hundred dollars a month and you give them X amount of your time. Forget about the actual amount because that could be different for each country you're in or which type of athlete you're coaching. Let's just talk generally.

Think of your athletes and break them up into three different groups of people. The first group should be made up of people who don't take much of your time up, less than what you'd think was fair for what they pay you. The second group could be the ones that take a little bit of your time up. You wouldn't say they take too much of your time up, probably a fair amount for what they pay. And then, the third group will take the most of your time for what they pay and probably more of your time than what you would consider fair.

Now, we've got 3 groups of people. Then, you can create three tiers of pricing that will be suitable for all of your clients because they will fit into one of these tiers based on where you grouped them.

For example Bronze, Silver and Gold could be three new pricing plans. You could call them whatever you want but these terms are well known and make sense for this example. Obviously, the price will go up along the tiers.

Now take each group of people and calculate how much time you spend with the Bronze group, how much with Silver and how much with Gold. Take that time and articulate it specifically for what time is spent on what tasks and create the list of benefits for each of the plans. e.g 1 30 minute call a week, daily/weekly emails etc.

Now you have three different groups of people but the way you interact with each group should not need to change.

Then, you set those three prices. Bronze should be an affordable level. So you shouldn't be worrying about not offering something that's affordable. Silver could be a little bit more but they're getting more. And Gold would be your premium plan at a premium price.

Here's the tricky bit, this is the best way I can think of restructuring pricing with the least impact on yoru existing clients. First, scap all of your existing pricing. Now you have only the new pricing tiers. It's time to communicate the changes with your existing clients

Announce the Restructured Pricing

You can now announce that your pricing structure is changing with a clear and concise description of each pricing tier and what the client is entitled to.

Then ask your athletes to choose which of the plans they want to be in. So, if three athletes are taking up a lot of your time and want to continue to do that, then they can choose the Gold plan. But they'll pay more. You are giving them the power to decide and it's their choice to pay for what they want out of your coaching. 

When they do choose, all of these pricing is very clear. Instead of you telling these athletes that take up the most of your time "Sorry, I'm just going to charge you more," you say, "I'm restructuring my pricing, it's Bronze, Silver, Gold. This is the price for each of them and this is what you get. Which model would you like to fall under? "

If they don't want to pay any more, they can go with the Silver or the Bronze. Of course, they will now have clearer guidance about the sort of time they can expect to get from you as the coach.

Conclusion

This is a really common problem that coaches talk to me about a lot, and almost always coaches aren't (in my opinion) charging enough for their time and their expertise.

This is a strategy to help you and your business restructure your pricing and make it clearer and fairer. Fairer for everyone involved. fairer for people paying less or and fairer for those paying more. And, of course, fairer for you as the hard-working coach.

If you have any questions about the best pricing model, feel free to reach out and we can have a chat. But,