3 steps I took to set competitive rates and make $1,500 an hour

Table of Contents

  • Susie Moore is a high performance coach and advice columnist who helps entrepreneurs get hired by leveraging the media. Sign up for her free workshop on how to get publicity for your business right here.
  • She says that most people overthink their rates when they’re first getting their consulting or coaching business off the ground.
  • To avoid this, she recommends getting a sense of what other people in your field charge and then settling on two packages — just two.
  • Your rates should depend on the demand for your product — the more clients interested, the more you should increase your fees.
  • Visit Business Insider’s homepage for more stories.

“Susie — help! A tech company wants to hire me to help their team this summer!”

I get a lot of texts and emails like this from people not sure how much to charge for their work.

COVID-19 has meant that coaches and consultants are increasingly getting hired for remote, short-term contracts. It’s a great opportunity to get started and branch out into this type of work (and make a great income doing it).

When I started my high performance coaching business, I charged a flat rate of $100 per hour. Over time, this grew to $10,000 and $15,000 coaching packages (at a rate of over $1,500 an hour). 

Pricing is a weird beast, especially when you first get started in business. We overthink it. We crowdsource it from the wrong people. We overcomplicate it with options, discounts, and exceptions for friends of friends (and that person that our mother knows from church).

Here are three steps to come up with the right rates for you — that won’t turn clients off:

1. Research your market

I bought two life coaches lunch in NYC when I started out — one guy and one gal. I looked up the best coaches in New York and, to my delight, they agreed to meet. 

Small business owners are more willing to network and connect than you think. And I got great, honest intel (and friendships!) for the price of a restaurant tab. 

In our current era, you can start by just Googling away! Simply look up other people just like you, where you are: “Life Coach, San Francisco,” “Health Coach, Dallas,” “Sales Trainer, Boston.” Increasingly with coaching (and most other services) moving online, location matters less, but this is still a good place to start to avoid overwhelm and gain solid intel. 

(Side note: coaching and consulting are so awesome for this reason — I personally have coaches that I hire in Naples, Chicago, and Australia!)

See how much people similar to you charge and how they package their options (by hours, months, size of groups, etc). Look up four to five competitors as a minimum. Now you have a decent baseline from which to work.

2. Name and claim your rates

This is important: Create no more than two packages. 

I can’t tell you how many coaches and consultants I’ve seen with the most confusing and over-the-top pricing scales — “The Diamond VIP package,” “The Golden Group Rate,” “The Silver Starter,” “The Bronze Begin With Me Today” (blah blah blah). Confused prospects won’t buy.

People concoct these offers for three main reasons:

  1. To avoid actually selling
  2. Because they have no idea what their ideal clients actually want
  3. Because they’re confused about what they’re offering so they settle on creating shiny objects.

It’s proven that too many options make a person close out of any sales window (we’ve all been there)! It’s called the paradox of choice.

Have two simple packages — and name them! Mine didn’t sound glamorous, but they sold. Here’s an idea of how you could structure yours:

The “A La Carte” package: This is your coaching and consulting services charged at a fixed hourly rate, allowing flexibility for both yourself and the client. 

The “Contract Discount” Package: This is where you’d present the client with two engagement options along the lines of one, three, or six months — whatever’s most suitable. You’d then offer them a discount on your hourly coaching/consulting rate for committing to more hours over a longer-term engagement (there should always be a discount for volume). 

You can also offer up to a 5% discount (no more) for clients who pay upfront if you wish. This acts as a thank you for their commitment and supports your cash flow.

Two simple options make it easy for your prospects to decide and easy for you to track sessions, payments, and invoicing.

3. Follow the supply/demand rule 

There’s a price point for every client. For example, one friend of mine spent $750 on a wedding photographer. Another spent $18,000. There are high maintenance clients at every price point, so don’t think that charging less is a way to avoid that.

The easy way to know when to increase your prices is straightforward — when demand for your services increases. I increased my rates once I started getting known through media coverage in places like Marie Claire and The Huffington Post and began struggling to accommodate the influx of clients. I’d increase my prices in increments every few months until I created my longer-term packages that sold well.

You can have a fancy, high-end price option, but it’s meaningless if no one is buying it. So you want your pricing to be aligned with your demand. 

Source Article