The era of the life coach is here. The industry is growing (no pun intended), though it’s common industry knowledge that up to 70 percent of life coaches fail in their first three months. If you’re a coach or considering becoming one, this might be the most important information you’ll read. This will help you to understand the industry of coaching and to get some ideas about what not to do and where to focus your efforts.
The International Coach Federation released new global research that says the professional coaching is a multi-billion-dollar industry. The 2012 ICF Global Coaching Study found that the estimated global revenue from coaching to be almost $2 billion annually. Not a bad number considering it only started as an industry in the mid 1990’s. So where did it all start?
Thomas Leonard, an American financial planner, was the first person to develop coaching as a profession in the 1980s. Leonard’s observations told him that although his clients were emotionally stable, and hardly needing therapy, nonetheless wanted more from him than just the usual tips on how to invest and safeguard their incomes. They needed help organizing their lives better and planning and achieving their goals. So Leonard’s career soon shifted from financial planning to develop his coaching methodology full-time. He called it “life-planning”.
Within a few years, he was coaching and training people using the specific coaching skills and techniques he had developed. Coaching filled a gap as it was different to the skills of therapists or consultants. Today the International Coach Federation (ICF) has more than 12,000 members worldwide, double the amount just five years ago. And they’re only the registered members! Globally, it is suggested that the figure would be ten-fold, upwards of 120,000 life coaches.
Since 2004, Life Beyond Limits has provided premium life coach training and trains annually, hundreds of adults who graduate to become registered life coaches with a national accreditation. Life Beyond Limits graduate’s skills include life coaching, Neuro Linguistic Programming (NLP) and Hypnotherapy. “Each year, we certify around 300 life coach graduates from our life coach training program,” says Rik Schnabel, Director of Training and Coaching and believes, “This number will more than triple in the next ten years as more people realize their life skills and coaching skills are highly valued, both in the private and business sectors.”
So once you have completed your life coach training qualification, its time to focus your efforts on growing your business. Here are some critical keys.
#1 Critical Key – Specialize or Paralyse
In a survey commissioned by the ICF in 2012, 16 percent of Coaches said their coaching specialty is “life vision and enhancement,” the third most popular area behind ‘executive’ and ‘leadership’ Coaching. The survey also found that women make up more than half the clientele of professional coaches. Positioning is key to gaining success as a Coach.
According to Rik Schnabel, Director of Life Coach Training – Life Beyond Limits, says “Coaches fail dismally simply by being too generalist in their selection of title. If you Google ‘Life Coach’ a massive 764 million results appear! It’s a near impossible task to be found in an ocean of Coaches. However do the same search for (say) “divorce coach” and only 102,000 results appear. While that’s still a lot, you’ll be found much more easily. Of course don’t become a Divorce Coach if you don’t love the idea. In our Life Coach Training program, one of the first things our students do is choose a niche – it’s vital to their success.”
People today are learning quickly that specialization is the key to quick solutions. If a client is looking for a solution to a specific problem they’ll likely use Google. AYTM Market Research found that more than 74 percent of consumers use Google to search for services and products. If a client needs some help through a divorce, then they’ll likely use the word “divorce” in their search, not “life coach.”
#2 Critical Key – Target Local not Global
While many coaches when asked why they have chosen to Coach, many will say they wish to make a difference in people’s lives and most want to change the world.
Schnabel says, “The world doesn’t need changing, your neighbours do. I would aim to own, ‘Depression Coach Melbourne’ before ‘Depression Coach (the world).’ We encourage our student Life Coaches to make sure that everyone within arm’s length knows what you do. Start marketing within 5 kilometres (3 miles) from where you work. Become a big fish in a little pond first, otherwise your efforts will be costly and erratic.
#3 Critical Key – Layer Your Fees
The average full time Life Coach limits themselves to less than 20 one-on-one clients a month and charges around $350 a month per client. If you have 20 consistent clients, that means a gross income of about $7,000 per month. USA Today stated that some Coaches charge $300 per hour, while others may charge $350 – $600 per month. If you are just establishing yourself in the field, charging $300 per session is probably too much! So there are some real returns gained from your life coach training.
A 2007 study of nearly 55 thousand coaches from around the world found that the “average” annual income for full-time coaches was over $83,000. The researchers found that part-time coaches made around $26,000 a year.
Average coaching salaries according to Sherpa:
- Executive Coaches make $325 per hour
- Business Coaches make $235 per hour
- Life Coaches make $160 per hour
- Coaches average between 6 and 6.5 clients per week. When you only coach a few clients, you can be at your best virtually all of the time, which makes it possible to give incredible service and results. That’s when you can charge a lot.
- So average annual incomes, according to Sherpa, range from $55K to $116K. That’s pretty close to past ICF survey averages for a life coach (or business or executive coach) salary.
The life coach career income potential reports encompass other “niches” or specialties. Coaches who focus on different niches such as Executives or Entrepreneurial Coaches charge a lot more than others, around $700 per hour and can gross over $17,000 a month. There are some coaches who have tremendous reputation and experience (and excellent marketing teams!) who charge beyond $1,000 an hour. But don’t count on doing that right out of your life coach course of study.
“Layering fees is a great way to structure your pricing and can be used as a bargaining tool,” suggests Schnabel. “If you’re charging (say) $500 for a single Coaching session you could discount contracts of 2 to 5 sessions for $450 and 6 or more for $400. That way you can flex when needed up to your top rate and down to your bottom rate regardless of the commitment. When you get that uncomfortable situation of a friend or relative wanting a session with you, you could offer them your bottom rate and let them know it.”
#4 Critical Key – Know Your Value
According to Paul Michelman, editor of Harvard Business School’s Management Update, “Whereas coaching was once viewed by many as a tool to help correct under-performance, today it is becoming much more widely used in supporting top producers. In fact, in a 2004 survey by Right Management Consultants, 86 percent of companies said they used Coaching to sharpen the skills of individuals who have been identified as future organizational leaders.”
The ROI from professional Coaching is even more astonishing. According to a Manchester Consulting Group study of Fortune 100 executives, the Economic Times reports “coaching resulted in a ROI of almost six times the program cost as well as a 77 percent improvement in relationships, 67 percent improvement in teamwork, 61 percent improvement in job satisfaction and 48 percent improvement in quality.” Additionally, a study of Fortune 500 telecommunications companies by MatrixGlobal found executive coaching resulted in a 529 percent ROI.
“Coaches who find their work both satisfying and easy to do, tend to under value their contribution and coaching,” according to Schnabel. “A good way to realise your value is to literally ask your clients to place a value on the problem or issue being gone or the goal achieved. The price doesn’t always have to carry a dollar value either.
Problems and goals can also be valued by what is not achieved; the cost of the loss or gain of the energy, the client can also consider the cost of the constant thinking about the issue. When I specialized as a “Depression Coach” working out of Melbourne, my first client valued the cost of his depression in the hundreds of thousands due to loss of income and associated costs including medication. In just one session the depression had gone and my client actually said he would have paid $15,000 for that session – of course he didn’t.”
Schnabel also believes “The answer to people’s problems will be found through coaching and as more people realize this, coaching will grow higher and higher in demand. It’s also a great business model where you can work less, earn more and enjoy every minute of it, so it doesn’t really feel like work, not to me anyway.”
So start your life coach training and enjoy a real career with meaning and add genuine value into your communities.
Are you coach material? To find out more visit Life Beyond Limits Accredited Life Coach Training.