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The Fallacy of Executive-Level Pricing an article by Morris Berg
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There has been a trend to charge higher fees for coaching than for private, face-to-face counselling
or therapy, and even higher fees than for therapy billed to insurance companies. However, while I
was working on this website - which took months to develop - the worldwide financial crisis was
deepening.I realised that high fees are not justifiable in today's economic climate, no matter what the coaching pundits say. I decided to reduce my fees to what I perceive as fair. What clinched this decision was learning that a psychotherapist friend, who has many years' experience and lives in an affluent area, was charging one-third less for face-to-face sessions than the going rate a few years ago.
It is not true (if it ever was) that a coach who charges less devalues him- or herself.
It is no longer true that clients are prepared to pay more for less.
What is true is that a coach who sticks to outdated business beliefs in a changing world needs to re-examine his/her business model. You want a coach who accepts and responds to change, and who lives in the real world, don't you?
One American consulting firm, referring to the cost of professional development courses, talks about "the fallacy of executive-level pricing". That firm provides educational resources for executives that are free or almost-free, and they have been doing it for years. Of course, their programme is a wonderful way of generating massive publicity for their consulting work. They also earn from selling the textbooks that support the courses. The provision of some free resources is a strategy that has been taken up by many coaches, but executive-level pricing is still widespread in the coaching profession.
Executives today, if they have any sense, will not be dazzled by "executive-level pricing" while they are downsizing their company fleets and planning redundancies. Apart from the few coaches who coach the super-rich and powerful, and who can charge what they like, the rest of us need a hefty dose of realism. People with average incomes who are feeling the pinch will simply stay away from the high-priced coaches.
Yet coaches are bombarded with marketing plans that insist that the coach should not price himself/herself too cheaply. Like a high-class perfume, a little coaching should cost a lot. Theoretically, this is because it will have impact and value in the client's life. Marketing pundits are urging us to raise our fees even higher to generate a feeling of exclusivity!
No wonder some marketing gurus for coaches are even producing e-books for underperforming coaches, suggesting radical solutions such as getting a day job - easier said than done these days! Even office drudgery is seen as a better alternative than setting a more modest level of fees! Why is the principle of high coaching fees so sacred?
Some coaches might be afraid of an undignified professional price war. The reality is that deflation has been occurring in the field of personal development and therapies, and it has been happening for years. Coach training, NLP training, hypnotherapy and Reiki courses are only some examples of fields where costs have plummeted, especially if some or all of the training is undertaken by distance learning. There are even some free entry-level trainings that are pretty good. The result is thousands more people qualifying as helpers every year. Trainers like to talk about huge income potential for doing fairly little, and can mention the fact that there are millions of potential clients out there. "Everyone needs a coach" is the trainer's mantra. Yet the plain fact is that everyone does not have a coach, and maintaining high fees in the current economic climate will not encourage the take-up of coaching. The hype about a limitless client base sounds a bit like a multi-level marketing bubble, does it not?
In today's times, coaching may well generate hope and creativity and many ideas for changing life for the better. Yet, the best of those plans may need to be put on the back burner until economic conditions improve, and until then, the focus might have to be how to manage in today's circumstances without too much stress - while working towards a better tomorrow.
And during that transitional period, a client could well benefit from regular coaching to hold the vision of the future - but at high fees, the same client will be torn between the desire to be coached and the need to make ends meet. The result: dropping out of coaching, and probably never wanting to be coached again.
What kind of role models are coaches being if they insist that the only way to gain (self-) respect is to command high fees?
What does that say about core values when the underlying idea is that only those with money - or who charge high fees - are to be respected?
What kind of rapport does a coach gain with a client if he or she cannot appreciate that £ 90 an hour is simply not in the client's reality?
Someone once said that doing the same thing again and again and expecting different results is insanity. Do coaches sticking to their high-price fee schedules and getting no clients need a reality check? They certainly won't get any other kind of check.
Maybe clients - and the real world - can even teach us coaches something.
Revised February 2009.
For more details of coaching by Morris Berg see the various sections of this website www.sensitivenlpcoach.com
This article is copyright © Morris Berg 2009 and must not be reproduced on-line, in print or by any other means without permission in writing.
email Morris at hspcoach@gmail.com
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