The first in our new series of columns by an anonymous coaching buyer takes a thought-provoking helicopter view of what’s going on in the industry. This issue: pricing
Do you know what you should be paying for your coaching? Or charging, for that matter? Apparently not. I’ve been buying and advising others on the procurement of coaching services for years and it’s the question I’m most often asked. And if last year’s Meyler Campbell Business of Coaching survey is anything to go by, you’ll find prices range from £50 to £15,000 for a chemistry meeting and six coaching sessions. Now that’s some spread.
And while demand for coaching has held up through the financial crisis, there is still tremendous pressure to reduce costs. But the question remains: how much should we pay? My fellow practitioners are quite reluctant to share such information. So, to use a common coaching phrase, how do you frame the issue?
The first question many will ask is: what have we paid before? Often the issue is not value for money but what can be got past the financial controllers. So if you’d paid £6,000 for a coaching contract last time, that’ll be your benchmark.
Of course, you may not have any internal history of payment. In that case you should ask others elsewhere. Easy? Again, apparently not. I’m constantly amazed at how people won’t ask for fear of looking incompetent or, worse, discovering that they are paying £6,000 for a £4,000 coach.
Some colleagues treat coaches as if they are consultants (certainly not an argument to have here!). We know that the current consultancy rate is £1,500 a day. That means they’ll pay the coach the hourly equivalent (£187). Unsurprisingly this gives a figure close to the average contract price found in Meyler Campbell’s survey – £2,400 for a standard contract. It’s crude yet effective and the organisational system can accept it.
Claims for a return on investment (ROI) are useful for making the case for coaching, but how relevant is the case study of a retailer if you are in investment banking? Besides if coaching really has a ROI multiplier of five times the investment, then arguably you need a £15,000 a contract coach so you can talk about your £75,000 saving!
Of course, it’s not that simple. Nevertheless, a high-priced coach can have a significant, positive impact on contracts in certain sectors. A client in a City Hedge Fund earning hundreds of thousands a year expects that their coaching will be expensive. I mean, if a cheap coach can do a good job, what does this mean for the client’s self-worth? I know one coach in the City who was told by his client that he wouldn’t get out of bed for the coach’s miserly £850 per hour! So, for the organisational client procuring coaching is a question of balancing the ego and power of the clients, coaches, finance department and other executives.
What have I learned? It’s this: price often bears no correlation to the quality of the coaching. So, as winter approaches, remember: pricing coaching is like taking the temperature of the three bears’ porridge. If it’s too hot (expensive) or too cold (cheap) it won’t be to the procurers’ taste. It’s only by experimentation that you can get it to taste just right.
And no, I’m not telling you what I pay!
This column was inspired by the title of the book, A View from the Balcony: Leadership Challenges in Systems of Care by G de Carolis, M Linsky (foreword) and R Heifetz (foreword), Brown Books, 2005.
- Heifetz urges leaders to move back and forth between the operational field and the balcony view to get a better perspective (see also R Heifetz and
- R Neustadt, Leadership Without East Answers, Harvard University Press, 1994.)
Let us know what you think at: thefacelessclient@coaching-at-work.com
Volume 5, Issue 1