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The Trickiest Question in Coaching

My experience of professional external coaches & mentors is that they are generally giving of their time and often willing to share & support other colleagues who ask for their help.

However, there does seem to be one exception. It’s perhaps the trickiest question in coaching…

What do you charge? 

I recently wrote here about Sheffield Hallam Business Schools’ quarterly Coaching & Mentoring Research day.

During the day a group of us (largely strangers) had a discussion about pricing and marketing coaching services. We shared our individual views on the market, how we saw the market was priced and where we thought our services sat in that mix. Each of us took something from it but we all felt it was a healthy conversation not often had.

Now I’ve had very honest conversations on pricing with colleagues before and we’ve found it easy to talk about our experiences. Similarly, I’ve found clients very supportive in helping understand market rates. It takes trust but it’s not that hard to do.

However, it does seem that the subject of pricing tends to be avoided between coaches & mentors. I know others share this view.

What is stopping you?

So what’s stopping coaches & mentors from having this discussion?

I’m aware that in some jurisdictions, conversations on pricing are not permissable as it could be construed as price fixing. However, to my knowledge this is not the case in the UK.

There is an argument that the pricing is so variable dependent on industry, individual and need that any conversation would be mixing apples & pears… I think that’s an excuse. Arguing the variables would be a conversation about pricing!

Coaching & mentoring as “professions” are embryonic and practices can be diverse so perhaps the lack of clarity on pricing is a market phenomena… so how come clients know what the market price is?

A theory

Bear with me on this as I attempt to journey into amateur economics… Paul Stokes in our group mentioned the Giffen Good in terms of exceptions to the normal supply & demand curve. What I actually think he meant was the Veblen Good.

Veblen Good describes a commodity where after a certain price point, rather than demand falling it actually increases – luxury cars being a good example. Now this doesn’t necessarily sound like coaching or mentoring until you overlay a few key features of the current coaching market:

    1. The market is diverse with a spectrum ranging from high end organisational needs to more personal coaching
    2. Executive Coaching is seen as the preserve of the most highly paid.
    3. Client ego or perceived value can have an impact
    4. Unlike other markets, price often bears no correlation to the quality of the coaching

You’ll find some interesting references to these points on Coaching at Work here and here (you may need to be a subscriber).

For external coaching & mentoring, I think this implies that there is price point at which prestige kicks in (snob value) but has no relevance to quality necessarily.

What’s compelling for me in this theory is the fact that there are a good amount of coaches & mentors working at the high end of the spectrum. Similarly there are many more advertising their services at the low end of the spectrum. Where there appears to be a dearth is quality coaches at reasonable prices for middle-management…

What this means?

Firstly this is a theory. It has some attraction but it is just a theory.

However, it may be that coaches & mentors are reluctant to discuss pricing because we are working in a market that is exceptional to normal supply and demand. This makes it harder for people to gauge where their pricing should sit between the highest and the lowest.

Beyond the reticence of coaches & mentors to discuss their pricing is the observation that perhaps clients are paying a premium to support the egos of the most highly paid.

Perhaps more importantly is the opportunity to provide high quality external coaching to lower levels of the organisation based on the “real” price.

I would really appreciate any thoughts or reactions, specifically :

    • Are coaches & mentors slow to have discussions about pricing? What creates such examples of reticence?
    • How well does the Veblen Good diagram above relate to your view of the coaching & mentoring market?
    • Is pricing the only perceived barrier to providing high quality coaching to lower organisational levels?  What other barriers do we face?

About David Goddin

Passionate about People, Performance & Potential. Amongst many other things David Goddin is a consultant, coach, facilitator & mentor with extensive experience of transforming business performance and organisational effectiveness as a Senior Executive in large organisations. As the founder and Managing Director of Change Continuum, David now works with companies and business professionals who want to increase performance, accelerate change & unleash potential.

Discussion

12 thoughts on “The Trickiest Question in Coaching

  1. I agree that we are slow to talk pricing, and I have noticed some interesting examples of clear pricing on the web. I really like the Veblen curve and I the challenge of the snob value, and I feel there is an issue about clarity about what you are buying/paying for as the client.Barriers to coaching, I just think its misunderstood. Doing some work to promote coaching in FE sector at the moment, so many definitions and assumptions about what coaching (and mentoring) is and isn't.

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    Posted by Ian | December 13, 2011, 7:09 AM
  2. Hi Ian – appreciate you calling by and sharing your thoughts.  I really like your point about clarity – what clarity would help clients I wonder?One of the barriers to coaching I think is the huge burden that many people are placing on a single word.. "coaching".  The counter argument is that it is different things to different people – doesn't this only fuel misunderstanding?

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    Posted by davidgoddin | December 13, 2011, 7:26 AM
  3. David, Thanks for the great post and touching on a little-discussed area.The whole topic of Return on Investment (ROI) is constantly debated in social media, IS, and charities (although they call it impact) but it isn't that often I see debates about the ROI of coaching and I think it is a really important one!Years ago, I did a job managing the portfolio of internal investment on IS projects for a large corporate and one of the aspects of portfolio management has always stuck with me: to judge a potential investment, you need to know the cost, the value, and the risk (how likely is it to deliver the value).With apologies for potentially complicating this further, but I think the debate is what do we charge, what value do we create in return for that, and what is our track record at delivering that value? My own observation is that the value of coaching isn't that well-understood which makes the debate a bit of a one-sided one, just focusing on cost. Perhaps the other reason for some of the premium pricing isn't just the perceived value, but the fact that you might be buying a known track record as well.An interesting discussion and I agree totally that coaches are a supportive bunch!

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    Posted by Ian Pettigrew | December 13, 2011, 9:11 AM
  4. Hi David, finally cleared the backlog and am now here with my thoughts.In answer to Q1 I think some of the reticence comes from the fact that coaching is so many different things to so many people. The sort of coaching I tend to do really struggles to demonstrate a cold hard ROI because so much of it is around the internal world, the relationship with self as the basis for the relationship with others. Also much of my work focusses on health which is an everchanging paradigm for many people, not things which are easy for the FD to sign off on. I think Ian Pettigrew's point about buying a track record is a very real issue.When I read the sneak preview you mailed me Q3 really stuck out for me. I have spent most of my career in frontline roles and the supply of coaching for those key deliverers is generally woeful. It seems to be that if a Director needs some (shall we discreetly say) guidance on people skills (perhaps) then maybe an executive coach is called in whereas if a customer service manager needs some they get a "Personal Development Plan" which may include some courses around behavioural change, often phrased in a "you have a problem and so need fixing" manner. Let me give you an example. I worked in an organisation which wanted to "establish a coaching culture". When I called the scheme manager and offered my skills as someone who had self funded this skillset and could be utilised better in the organisation (in addition to my day job), I was turned down. The reason? It was felt that the only people who would need coaching were senior execs and that me as a middle ranking manager could hardly empathise with their challenges, this from a senior HR person! I asked whether I could be deployed to peer level coaching then? Apparently there was no budget for that. So much for a coaching culture from top to bottomSo, hopefully forgiving my little rant, maybe it's down to us as providers to be able to display the benefits of coaching for frontline staff, for their development, for their skillset, and honestly, just because everyone should have access to this sort of stuff not just those who can hog the budget!

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    Posted by Jon Bartlett | December 13, 2011, 12:23 PM
  5. Hi Ian – great comments and a huge subject to cover!  Pricing is of course just one dimension…I think the issue with value is that it's often in the eye of the beholder and doesn't necessarily mean financial results will come from it.  Yet we want our clients to be able to demonstrate impact and show that we create value working together.  There always needs to be a degree of faith at work here I think or do we perhaps run the risk of leading the clients agenda?The issue with traditional ROI approaches means we're trying to measure the impact of human interaction and attribute financial results to it.  Sometimes this might be very easily achieved but for many interactions the cause & effect is not that easy to compute and we run the risk of overstating the impact. So I have a question around when is ROI a rational pursuit or an ill advised venture?It feels to me that the answer lies somewhere between these two dynamics…  It may be that ROE (return of expectations) is a more holistic & valued measure for all concerned?  Perhaps as with leadership development the case for ROI is inferred by long term organisational case studies rather than calculated each time we coach or mentor?There's also a question of what responsibility does the coachee/mentee hold for demonstrating the value they are receiving?I think we might be starting another blog!

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    Posted by davidgoddin | December 13, 2011, 12:32 PM
  6. Jon – what a great story to illustrate the issues (prejudice perhaps?) that organisations face in sponsoring a coaching culture.My sense is that when coaching/mentoring can demonstrate it's wider accessibility as an investment whilst maintaining high quality and still deliver results then we'll see the "sea change".  The market seems to want it.  Organisations know that embedding a coaching culture especially as a management style takes time but creates immense value.  How do we get there?Perhaps we all need to do more to communicate the value and the accessibility without giving the sense that the only option carries a high investment?  Perhaps there is a generational aspect to this?  Perhaps the market is just too diverse?Coming back to the reticence of coaches/mentors, I'm not sure that this is as a consequence of diversity. If this was the case, relevance would be the issue not reluctance?  My sense is that there is some fear of the unknown at play here but I could be wrong…Funny how this is generating more questions!  For me it just goes to show how important it is to discuss these issues openly.

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    Posted by davidgoddin | December 13, 2011, 2:44 PM
  7. I'm not a coach and I publish a day rate figure on my website and build projects around that. From my point of view it's simple – you've either got conviction in your worth and value and you want people to know it, or you haven't. If the latter then I'm not sure running your own business is worth pursuing?

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    Posted by Doug Shaw | December 13, 2011, 3:50 PM
  8. Good perspective – thanks Doug!  I think that builds on nicely from my comment to Jon on fear of the unknown… perhaps it's conviction rather than the unknown that stops some from having the open discussion… either way does it question your commitment?

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    Posted by davidgoddin | December 13, 2011, 4:24 PM
  9. I think you're right; there's a whole new blog in this topic!I agree that trying to link everything back to financial results is difficult (and unnecessary in my opinion) and that none of this lets the client off the hook in terms of delivery of results. I think the other challenge is that the initial coaching objectives can sometimes be consequences of something else and I don't think it is helpful for the coaching relationship to be too constrained by an excessive focus on any kind of rigid expectations.There was some brilliant research on benefits management that came out of Cranfield which I've linked to in a rant on the ROI of Social Media (http://www.kingfishercoaching.com/the-hunt-for-return-on-investment-roi/). I tend to keep this in mind when setting coaching objectives with 1:1 clients in corporates so that we can set objectives for the individual coaching engagement, and have a line of sight to the business benefit this delivers.I'd love to see ROI used a bit more in leadership development and HR in general; Recognising that ROI isn't an exact science, but making sensible investment decisions about what to do to achieve business goals and then tracking the delivery of value is a sensible discipline that would change the way we do some things. One debate I'd love to see is the ROI of organisational change!We said we might be starting another blog, but there's probably enough challenges in this for a Ph.D.

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    Posted by Ian Pettigrew | December 13, 2011, 8:39 PM
  10. Dave a really interesting post as someone who has both procured and benefitted from coaching.One of the first considerations 'we' made when initiating a coaching engagement was whether it was a positive or constructive situation. Where it was positive i.e. about realising potential that wasn't being tapped then generally the ROI was considered against the size of the prize for the business and the decision stemmed from there. Where it was a constructive situation i.e. there was an existing issue, the conversation was generally harder and finding funding likewise harder.Also, the differences in service/support, duration and the difficulty of providing structure pre-engagement makes pricing a very cloudy issue. I have discussed transparency of pricing with others (including Doug) generally (not specifically with regard to coaching) but still find it difficult to price coaching in terms of the whole engagement.The biggest challenge I had as the person who had to verify and validate coaches was how crowded the market was with people who refer to themselves as coaches and the vast (and I do mean vast) differences in the quality of their practice and their ability to demonstrate how they would work with a coachee. Generally the best people I've worked with (and have been coached by) have come from network recommendation, are more than happy to provide reference points and can demonstrate a track record of achievement which has usually involved broader relevant qualification other than purely as a coach – but that is just from my experience.Several people I met during my investigations into coaches really struggled with firstly being subjected to extensive verification from someone within the HR function and secondly, with the idea that their methods should be open to scrutiny. What I think they found tricky to realise was that as the person sponsoring a coach into the organisation it is often the HR practitioner who is a) sharing the risk and b) has the most to lose from an internal collateral perspective should the engagement not be successful.

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    Posted by Rob Jones | December 14, 2011, 2:13 AM
  11. Thanks for sharing your experiences here Rob, especially the perspective of the client.What strikes me is that your modus operandi is what the surveys of buyers indicate.  Gauging calibre can be hard so network, recommendation & referral count for a lot and I think indicates just how must trust is put into the process. In itself does that indicate that often we don't know what the outcome will be but we trust there will be a positive outcome?  It's often been my experience but it puts ROI into a different light!It's also interesting that in such a crowded & varied market the due diligence a client needs to do on a coach is not always understood or perhaps even respected.  I believe external Coaches & Mentors should be helping their clients (or prospective clients) make smart & informed buying decisions even if that means excluding themselves in the process.  Isn't this just part of how we create value?Lots of learning here for the profession I think but shows how important it is to have the client in these discussions.  Thanks Rob.

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    Posted by davidgoddin | December 14, 2011, 9:25 AM
  12. I think you're right; there's a whole new blog in this topic!I agree that trying to link everything back to financial results is difficult (and unnecessary in my opinion) and that none of this lets the client off the hook in terms of delivery of results. I think the other challenge is that the initial coaching objectives can sometimes be consequences of something else and I don't think it is helpful for the coaching relationship to be too constrained by an excessive focus on any kind of rigid expectations.There was some brilliant research on benefits management that came out of Cranfield which I've linked to in a rant on the ROI of Social Media (http://www.kingfishercoaching.com/the-hunt-for-return-on-investment-roi/). I tend to keep this in mind when setting coaching objectives with 1:1 clients in corporates so that we can set objectives for the individual coaching engagement, and have a line of sight to the business benefit this delivers.I'd love to see ROI used a bit more in leadership development and HR in general; Recognising that ROI isn't an exact science, but making sensible investment decisions about what to do to achieve business goals and then tracking the delivery of value is a sensible discipline that would change the way we do some things. One debate I'd love to see is the ROI of organisational change!We said we might be starting another blog, but there's probably enough challenges in this for a Ph.D.

    Like

    Posted by Ian Pettigrew | December 14, 2011, 3:27 PM
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