Why You Need to Stop Charging By the Hour
One of the biggest mistakes I see coaches make is pricing their services based on an hourly rate. While it may seem like the obvious way to fill up your calendar, it’s not the most beneficial choice for you or for your clients. A powerful alternative is the monthly retainer. This is an investment your clients make in a comprehensive coaching program designed by you. It creates lasting change for your client and consistent cash flow for your business.
Coaching is not a quick fix, and although some one-hour sessions can feel transformational, the lasting change comes from developing that powerful relationship with your client, increasing the level of trust and supporting them as they create what they want in their life. It’s a process that doesn’t happen overnight.
In my last post I wrote about the value of the three-week coaching model. Check out that article for the details, but the basic idea is that you coach three weeks out of the month and keep one week free from coaching commitments. Establishing this model is the jumping off point for having your clients hire you on the basis of a monthly retainer. This approach protects you from burnout, keeps you fresh and rejuvenated, and allows you to consistently offer your best work.
For example, you might choose to offer three structured coaching sessions each month as part of your coaching package. In between those sessions, give your clients an opportunity to connect with you with something I like to call unlimited laser coaching. Laser coaching is five or ten minutes of support in between sessions. This could be by phone or email. I’ve been offering unlimited laser coaching as part of my coaching packages for almost 20 years and clients rarely take advantage of it. Even if your clients don’t use it, the addition of laser coaching will help them feel uniquely supported in the coaching process.
Have your clients invest on a monthly basis, and plant the seed that this coaching program is based on a six-month commitment. In a consultation you might say:
“Most clients work with me for a year, and I want you to really consider us working together for six months. And here’s the monthly investment.”
The Benefits of the Monthly Retainer:
- Your client feels supported all month long.
- It allows you to go deeper. Ideally your clients make a 6-month commitment so they understand the journey you are both on together. They know that the change will be gradual and therefore lasting.
- Structured sessions become just one component of a monthly program you have developed to create authentic transformation in people’s lives.
- It shields you from burnout.
- It creates a consistent cash flow through your business.
- You will build powerful relationships with your clients.
- These relationships will generate referrals and keep your business growing.
Passion into Profit Coaching Challenge: What are some ways your practice could benefit from dropping the hourly rate? How might you design your monthly retainer coaching programs? Share your thoughts and experiences below. I would love to hear from you.
Teresia LaRocque, MCC (Canada)
Teresia LaRocque, MCC, MAA, is Canada's first Master Certified Coach and a co-founder of ICF Vancouver Charter Chapter. Over the past 20 years, she has been a key player in developing the coaching industry in Vancouver, British Columbia, and Canada. Her Passion into Profit program delivers a time-tested, step-by-step process for developing a sustainable six-figure coaching practice. More than just business strategies, this interactive program also lays the foundation for a balanced, fulfilling lifestyle — a mission-critical component of entrepreneurial success.
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Thanks Teresia,
So are you saying, offer a monthly rate or a contract rate (6 or more)?
Dear Teresia,
Good point and I new perspective, congratulations and thanks.
I will think it over.
Have a wonderful week.
Mario
Hello Teresia. Thank you for this. I am presenlty working with a Life Coach to help me transition professionally (& a some personally). In pursuing becoming a coach myself, i came across your post here. You are right, all the aspects you said are true from my client perspective. Thanks again, s
Thank you Mario and Sarah for your comments and yes Sas, that is my suggestion, have a monthly retainer rate, or clients can pay upfront for 6 mths at a discounted rate.
Hi Teresia,
Thanks for sharing this insight, when you are for a monthly retainer and coach 3 weeks out of the month- do you give them intensive coaching sessions? Instead of one hour you set up a time just for the client for a few hours at a time? I dont really see the difference here, from having the payment in advance for 6th months. Can you explain?
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Hi Yvette,
I am not entirely clear of your question. Are you asking your clients to pay in advance for 6mths and wondering why have them paying monthly?
You can get your client to pay in advance for 6 mths ( and when you do that you may want to add a discount as an incentive). With the monthly coaching you would schedule your “structured” coaching sessions and have available your unlimited laser and email coaching – which supports the retainer concept.
I hope this helps if I did not answer your question feel free to clarify.
Great article ! I have played with a lot of different payment schedules however I can not find one that seems comfortable.
Do you believe there is an industry standard ?
I also have noted there are many coaches now in different disciplines, life coaching, health coaching, fitness coaching etc. Many people have so many misconceived ideas of coaching. How do we determine a fair price for our services and yet the consumer feels good about what they have paid?
Thanks for a great and informative article. I am in the process of changing from an hourly fee to a monthly retainer fee.
best regards,
Paris