Taki here down the beach, part of our morning routine.
The girls are here playing with their crazy little surf toys and I thought I’d answer a question.
I just saw it from a guy called Josh.
Josh asked a question today calling a bunch of coaches out and asking what do coaches charge for their stuff and what do they deliver.
And so, there are a million ways to answer that, but I think the first thing to realize is that the ‘What do I deliver?’ piece is important enough to know what to give people, but it’s the least important part.
The most important thing to figure out is…
What is the transformation that you offer? What’s the change are you going to make?
Frankly, logistics is the least sexy part of your offer.
I mean this with all love and respect, but nobody cares — like, how many sessions they get, or what’s in your website, or how many months it goes for.
What they care about is what’s the outcome.
Because the simple truth is, if I can get the outcome without having to do any of that stuff, so much the better.
In fact, I’ve got a client called Mike who when a client says, “So, let me get this straight. How much time 1:1 do I get with you?”
His answer is, “As little as possible.”
And they say, “What do you mean as little as possible?”
And he said, “Well, let’s say there were two ways I could get you the outcome you’re after. The first way, I could put my thumb on your forehead for 10 seconds. And at the end of that 10 seconds, magically, your business is doubled. That’s option one. Or option two is we could talk about it once a week for an hour or so, and at the end of the year, you get the outcome. Which would you prefer?”
And people were like, “Well, obviously, the kind of the thumb.”
And he goes, “Unfortunately, my thumb doesn’t have that power. But the big lesson should be that what you’re buying is an outcome, not a set of deliverables.”
First lesson: It’s about the result, not about the deliverables.
That’s pretty, pretty clear.
Let’s get focused on the result that people get much more than the hours I get — all website I get to log in to, or the fact that there’s a Facebook group, and the other stuff.
The last piece, though, is ‘How much should I charge?’
We should charge on value, not on logistics.
Other companies charge like cost + pricing, or an hourly rate.
An hourly rate or cost price is just the dumbest way to charge for anything. You’ve probably had the experience where you’ve got a client an incredible result —like, maybe if you’re a business coach, maybe you added —helped them add a million dollars to their bottom line, and they paid you 15,000 bucks for that privilege.
I mean, that’s a ridiculous thing to deal for them.
The rule of thumb is this and I got this from a smart guy called Alan Weiss, who’s got a book called “Value-Based Pricing”.
What do you charge?
Well, you should charge an amount that gives your clients a 10 to 20 times ROI.
That’s the first part of the equation.
In other words, a really great ROI —a return on investment— for them, and a healthy profit for you.
And so, here’s the thing…
A healthy profit for you is easy to do when you’re charging by value.
Figure out what it cost them to not hire you, is the last tip I’ll give you.
Everyone’s freaked out about how much it cost to hire you —like, how much your coaching is, and will people pay that, and I don’t know if people in my market will pay that.
We’re all way to clear about the price of our stuff, or almost none of us are clear enough about the price of not hiring you.
Because if they don’t hire you, then they struggle; and they keep struggling, and it cost them a fortune.
And so, how much does it cost to not solve this problem is a really good question to be asking.
And with that in mind, the cost of hiring you is easy.
They get 10 to 20 times what they spend with you.
They spend a thousand bucks, they’re going to get $10,000 to $20,000 in return.
If they spend $20,000, they’re going to get $200,000 to $400,000 in return.
Hopefully, that helps a little bit.
Think about the three tips today.
Number one, your logistics are way less important than your transformation.
Number two, price so that they get a 10 to 20 times ROI and you get a healthy profit.
And third, think about the cost of not hiring you as a coach even more so than you do the cost of actually hiring you as a coach.
Hope that helps.
Taki Moore, out.
P.S. Whenever you’re ready… here are 4 ways I can help you grow your coaching business:
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