How to price a coaching or consulting offer without guessing

Ask an expert how they arrived at their price and the honest answer is often "it felt right" or "it is what others charge". Both are understandable. Neither has much to do with whether the business works.

A price set by feel tends to sit wherever the founder feels safe defending it on a sales call. That is usually lower than the value delivered and sometimes lower than what it costs to acquire and serve the client.

There is a more reliable way. It uses four inputs: the value of the outcome, the cost to deliver, the cost to acquire, and the capacity you have.

Input one: the value of the outcome

Start with what the client gets, in their own terms. If you help consultants add retainer clients, what is one extra retainer worth to them over a year? If you help coaches fill webinars, what does a full webinar produce in sales?

Say your typical client is a consultant who would gain two new clients at $2,500 a month by working with you. Over a year, that is $60,000 in new revenue. Even if only half the clients achieve it, the expected value is still around $30,000.

A common rule of thumb is to price at a fraction of the expected value, often somewhere between a tenth and a third, so the buyer sees an obvious return. In this example that puts the range between $3,000 and $10,000.

Price against the outcome the buyer is paying for, not against the hours you will spend delivering it.

Input two: the cost to deliver

Next, add up what one client costs you to serve. Count your own time at a realistic hourly figure, any coaches or contractors, software, and the support work that never shows up on the programme outline.

Say a 12 week programme involves weekly group calls, two private sessions, a community and a support inbox. Spread across a cohort of 20, it might cost $800 per client in team time and tools, plus four hours of your own time each, worth $1,200 at $300 an hour. Delivery cost: about $2,000 per client.

Input three: the cost to acquire

This is the input most often left out. Every client arrives through some combination of ad spend, content, sales calls and commission.

Using your own numbers, divide what you spent to win clients over the past quarter by how many you won. For an illustration, say ad spend works out at $1,200 per client and sales payroll, including commission, at $1,300. Acquisition cost: about $2,500.

Add the two together. Each client costs around $4,500 to win and serve.

A $3,000 price, which sits comfortably inside the value range, would lose $1,500 on every sale. That is how plenty of experts end up busy and short of cash.

Input four is capacity. Consider how many clients you can serve well at once. If you can handle 20 per cohort and want to earn $200,000 a year in profit from four cohorts, each client needs to produce $2,500 in profit.

Add that to the $4,500 cost and the floor price is $7,000. That sits inside the value range, leaves a healthy return for the buyer, and supports the business you actually want to run.

Putting the four together

Lay the inputs side by side and the decision becomes much less emotional.

• The value range tells you the ceiling. Above roughly a third of expected value, buyers struggle to see the return.
• Delivery and acquisition costs tell you the break even point.
• Capacity and profit goals tell you the floor you need.
• Where the floor sits below the ceiling, you have a workable price. Where it does not, change the offer, not just the number.

In the example, a price of $7,500 is defensible from every angle. If the floor had come out above the ceiling, the answer would be to raise the value of the outcome, lower the delivery cost or find a cheaper way to acquire clients.

Testing your number

A price is a hypothesis until buyers respond to it. Hold it for a meaningful number of sales calls before changing it, and listen to what objections you hear.

If almost nobody hesitates on price, you are probably too cheap. If price is the objection on nearly every call, either the value is not landing in the conversation or the offer needs work.

Raise prices in steps for new clients, not existing ones, and keep a record of close rate at each level. Over a few months you will have something far better than a feeling: evidence of what your market will pay for the outcome you deliver.