Why I Charge $35,000 for Coaching (You Shouldn't Yet)

How much should you charge for your coaching, especially if you're a beginner with no name, no brand, no following? Well, it depends on where you sit in one of these 3 circles. Should you charge the average market rate like everybody else, or should you differentiate yourself and go super high ticket? Or should you go super low ticket? Or should you charge $100 for that very first client just to get them in the door so you have some proof? It's very overwhelming, and so in this video here I'm gonna share with you the 3-part framework on exactly what to do so you know how much to charge. Because if you charge incorrectly, not only will you get more nos, but it could go against on how you want others to perceive your brand. So the first part to consider is what is your actual market value? This is all about demand and supply. And so that particular service that you're providing has a market value in the marketplace right now. Depending on how many people want it and how many people are supplying it. For example, a psychologist, the average market value per hour is about $150 an hour. And the reason why it's $150 an hour is because that's the demand and supply of the current economy. A therapist may charge about $80 to $100 an hour. A personal trainer may charge about $60 to $80 an hour. A nutritionist is about $50 an hour. A plumber, $120 an hour, although that is going up because demand and supply is going up and there's more demand for plumbers right now. A cleaner, the actual market rate right now is about $40 an hour. So it's all based on demand and supply, but there is an average kind of baseline for how much that service is worth in the marketplace when you don't have anything else to raise higher rates. So a life coach, the actual market value for a life coach is around about $80 to $100 an hour. And so if you don't have a name and you don't have a following and you don't have anything that will allow you to charge high rates, then that's probably going to be the rate that most people are willing to pay because that's the actual market value. If you're in the niche of, say, business coaching or helping other people make more money, get more leads, get more sales, get more whatever that case may be in terms of helping them monetize more, then you may be able to charge— the actual market rate is anywhere between $200 to $300 an hour. When I started out as a life coach, I was charging about $100 an hour because that was the market rate, and I didn't have any other kind of leverage to be able to charge more. But I was okay with that because I was just starting out. And so if you're starting out and you have no other credentials, then I wouldn't advise charging more than the actual market rate. And so $80 to $100 an hour for an average life coach. If you charge 12 sessions for a 12-week program and it's one-on-one with you, that's about $1,000. It doesn't sound like much, but it's what the market is willing to pay. Now, you may see some other people saying you should charge $5,000 or $10,000 or $100,000 and go super high ticket, but if there's nothing else to boost up the value, that's the wrong advice for your level. So then the question is, what do I need to do to be able to charge even more? Here comes the next point, which is what is the situational value? Now, the situational value says this: when demand and supply changes depending on the situation, you can charge more, or maybe you need to charge less, but, but most of the time it's gonna be a situation where you can charge more. For example, the average market rate for a dozen roses is generally around about, let's just call it $60, $5 a rose, right? But on Mother's Day and on Valentine's Day, that's gonna go up to about $150. FYI, I never buy roses on Mother's Day. I just don't. Or on Valentine's Day. I buy it the day after because I don't want to get ripped off for situational value. But it's only because the demand and supply changes. So in a situation, those flowers are going to cost way more. If you're looking for an umbrella, generally an umbrella may cost you $10. But if you're trying to find an umbrella on a rainy day or a poncho on a rainy day and they're about to sell out, then the situation changes, demand-supply ratio changes. And so now the umbrella may cost you $20 or $30, or if you had a sporting match and you're looking for a poncho and it's raining, the ponchos are going to cost you a lot more than if you bought it at a $2 store because of the situational value. When I was an optometrist— I used to be an optometrist for 10 years— if I worked in the city in Sydney, then I would get paid around about $55 per hour because there's so many optometrists and that's the market rate. That's the actual value per hour for an optometrist. But when I worked in the regional towns, which I did for most of my career, it was double. I was getting up to $110 an hour because in the situation they were in, there was less optometrists, less people wanted to go out there, and so I could charge more because the demand and supply ratio changed. And so the situation changed for me to charge more. Now A subset of situational value is this: demand also changes and people are willing to pay more if the situation allows them to get what they want with more convenience. Let me explain. So convenience becomes a huge factor. Now, you can buy water in the supermarket for a dollar. But if there's no supermarket around and you're in a restaurant, The restaurant will charge you $5 for that same water. Now, you could go out and walk 10 minutes to the next supermarket or the nearest convenience store and get it for much less, but it's inconvenient to do that, so you'll pay $5 for water in a restaurant. If you're in a hotel room and it's the middle of the night and you're thirsty and you can't really drink the tap water because it's not safe to, and they have a bottle of water in the hotel room in the minibar, That thing will cost you about $8 to $10, but you're buying that because it's convenient and you're not going to walk out to try to find a restaurant or try to find a supermarket to buy a bottle of water for a dollar because it's inconvenient to do that. So the situation demands higher value because it's inconvenient for you to get it somewhere else. And so in the hotel room, you will pay more. Now, if you're in a nightclub, you're inside a nightclub, it is hot, and you're thirsty, sometimes you might be paying $15 for that bottle of water. And so the lesson here is simple. If you are in a situation where it's inconvenient for them to do something else, you can charge more because situational value dictates also the price. I'll give you another real-life example. When I was in Ibiza many years ago, we were there and, you know, with a couple of friends and we did the whole Ibiza thing as a young person, right? Go all the clubs and all that kind of stuff. I remember there was one time we went to this club and we walked in and Ibiza is hot. And at the start of the night, a bottle of water was €5. Legit €5, which is pretty expensive situational value. Actual value was 50 cents. But situation, we're in the club, you're going to buy in the club. You're not going to walk out of the club and find a supermarket and bring it in, and you're not allowed to bring it in anyway. And so the funny thing was, as the night progressed, the water got more expensive. Now, I don't know if that's a rip-off or a rort or whatever the case may be, but it did. And it went up to €8, then it went up to €10, and by the end of the night, by 3 AM, that water was €12. It was more than double the price at the beginning of the night because the situation demanded it. And so they could increase their price and people willing to pay because it was so inconvenient to try to do anything else, and I need water now. And so the situation allowed the price to go up. So how does this all relate to demand and supply and situational value in your coaching offer? This is one of the reasons why people tell you to niche down, because when you niche down and you're the only one or the only few in that niche, that's serving that avatar, you put yourself in a situation where demand and supply ratio changes and you're the only one coaching that person, or the only few, and so you can charge more. So for example, if you're a life coach for everyone, the actual value is maybe $80 to $100 an hour. But if you're a life coach for Asian moms over 40, then there's not many life coaches for Asian moms over 40. And so you put yourself in a situation where you're the only person that's selling that water in that place. And so you can charge maybe $200, $300 per hour, or maybe what was a $1,000 course, you could charge $5,000 for it because you've niched down. So the fact that you niche down puts you in a situation where you can charge more because you're the only one or the only few. Here's another example. You could be a grief coach for everyone where it's just grief coaching, where if you've lost the dog, you've lost a parent, you've lost a spouse, you just be a grief coach for everyone. Actual value, maybe charge $120 an hour, which is like $1,500 for your course. But if you're a grief coach for widows, now you can charge $3,000 because there's not many, but there's still quite a lot. But if you're a grief coach For widows over 60, that's different. I have a client who wanted to become a grief coach for everybody. He's a male, so he lost his wife, and I said, bro, if you niche down, you can charge more. And he was really reluctant on doing it, but I said, right now there's a lot of widow coaches for female widows, but there's no widow coaches for males that I have seen. And said, if you coach down for male widows over the age of 60, because he was over 60 years old, you will crush it. You put yourself in this situation because at that age group there's a lot of widowed men that are underserved. And you understand there's a different pain point if you're a widow and you're under— and you're 35 or 40 compared to a widow that's 60, 65, 70. It's a very different Very different problem set, very different pain points, very different desires. It's completely different. And you'll be able to put yourself in a situation where you become the only one, and now you can charge €12 for that bottle of water when it costs $1 in the supermarket. And so see how situational value allows you to do that. Now there's another way where you can— by the way, this is useful, get a pen and paper out, rewind this and write some notes because this is, this is legit how you charge. The other way to change the demand and supply ratio is to limit your offers and put a genuine, legit scarcity on your offer, meaning you only take on 5 clients at this rate, or you only take on 10, or 3, or 4. And if you're doing one-on-one coaching, that is legitimate scarcity because you can't take on 100 one-on-one clients. And so when you put a limit on your offer, you can change the situation change the supply-demand ratio dynamic and you can start charging more. Here's an example. The reason why flights will cost more when there's only 2 more seats left on that flight is because there's 2 more seats left. So situationally there's a limit on it. Demand and supply ratio changes. So when I book my flights, I try to book as early as possible because I know if I book closer to the date and there's only 3 seats left, I'm going to be paying double to triple the price. Now another situational value where there's high demand is, for example, flights may cost more on New Year's Eve or Christmas Eve when people want to fly to the families, and so situation changes. So if you can put yourself in a situation where you are niching down and you're putting a limitation on how many times you can make this offer, how many people you can take on, you can already start to charge more. So what was started out as a $1,000 program can be a $5,000 program if you niche down, can be even a $10,000 offer if you put yourself as a limited time only offer. And that way you can now start to charge more. So let me give you an example for our case. In our case, the situational value, as we are the only ones on the planet that are teaching Tiny Challenges— the Tiny Challenges, if you've seen my stuff, you've been following my stuff This is my book, forwarded by Russell Brunson. It's a framework for beginner coaches on how to get their first 10 paying clients without any stress, without any skill of speaking, be on camera, all that kind of stuff. And we trademarked the model, but we, we created this. We invented Tiny Challenge, and we're the only ones that can teach this. And so we put ourselves in a situation where if someone wants to get their first 10 clients through Tiny Challenges, they cannot go anywhere else. We're the only place that sells it, and so we can charge more. Now, does it mean you should charge more? No, it doesn't mean that, but it means you can. And if you do, you can get away with it. And that's why my inner circle is $35,000 for beginner coaches, because we're the only one. It's also $35,000 for other reasons, which I'm going to get to, because that's the third circle. But when you can niche down and you're the only one, you change the demand and supply ratio. You put yourself in this situation where you can demand more than actual value. Now let's go to the third one. The third one is what is your brand value? This is very easy to understand. If you buy a plain t-shirt from Kmart or Target, it may cost you $20 or $30. You buy a Nike, it's gonna cost you $100. You buy a Gucci shirt, that's gonna cost you $1,000. You can buy a $20 handbag from Bags 'R' Us, or you can buy a $5,000 handbag from Louis Vuitton, or you can buy a $30,000 handbag from Hermès. You can buy a $10 watch, Casio. You can buy a $200 watch, a low-end TAG, Tag Heuer, or you can buy a $30,000 watch— Hublot, Patek, whatever the case may be. Now, when I was an optometrist, you could get complete pair of glasses for $49 with lenses, prescription, everything all done, complete pair, no brand. Or you can get Gucci glasses, complete, done, the same thing. You don't see clearer through more expensive glasses. Functionally, it's still the same, but it's got this Gucci logo on it, and that's $1,000. Or you can get Chanel glasses, same thing, you don't see better, for $3,000 because of the brand value. That's the reason why big names like Russell Brunson can charge $100,000 for 5 one-on-one sessions, or Marianne Golden can charge $350,000 for a VIP day, or Tony Robbins charges $1 million for his personal coaching. When I started out, my inner circle was $12,000, and the reason why it's $12,000 was because I had a little bit of situation value combined with actual value, but I didn't have a brand. But as my brand grew, my inner circle went up from $12,000 to $15,000 to $20,000 to $25,000 to $30,000 to now $35,000 for arguably the same promise, which is getting beginner coaches to exit the blue world and go full-time in coaching, replace the income, and get to 6 figures or multiple 6 figures. And that's our guarantee, that's our promise. But I can demand higher prices because now I have brand value. We're the only ones teaching Tiny Challenges, and that's compounded by the base actual value. And so by doing that, I hit this sweet spot in here, and you get your pricing structure. And so when you have all three, that's when you can charge more. But when you're starting out, start here and be humble about it, and that's completely okay. As you do this and you decide to niche down after getting some reps, after getting some mileage down, and after getting some clarity from actually coaching You can increase the price by being the only few that coaches this niche or having limited resources to be able to coach that person. And then as you build your brand, you can now charge more. And so the question is, what is that sweet spot in pricing? If you've got a little bit of all these things, well, this is how you know you're pricing it too cheap. If your conversions when you present an offer is over 80%. It's like, I had 10 sales conversations in the last month and 8 out of 10 bought. That's when you know you're too cheap. That's when you know the price is too low. How do you know you're charging too much? Well, potentially, potentially your conversions are less than 10% when you jump on these calls. And maybe you're charging too much and you haven't built up enough of a brand to be able to dictate that price. And maybe you need to go back to to actual value and start charging there. But the final thing is on how much you should know how much you should charge is this. It's kind of the unspoken. It's your energy, it's your conviction in actually being able to deliver that price. And so you may say, you know what, Richmond Dinh, I do, I do, um, I only have actual value and I get that my first coaching offer should maybe be $1,000 and that's okay. And, uh, and you go to pitch it, but you quiver. You're like, um, it's $1,000. But you know, that's the actual value. That's, that's the actual value. You've got life experience, maybe you've done a couple of certifications, but it's the first time you're doing it and you quiver. Well, quivering on $1,000 will not get you the sale. Even though it's worth $1,000, it won't get you the sale. The opposite is also true. You may be like, you know what, $1,000 is cheap. Anyone that has this will move forward faster because I've lived that experience. I know what it's like to be stuck and I can help someone there, but I'm going to be realistic. I'm going to charge $1,000. And you jump on that sales conversation today, it's only $1,000. It's a different energy, but you'll close more because people buy your certainty. And so your level of conviction also helps determine how much you should charge. And so if you figured out where you are on this quadrant here, if you're like, you know what, I've got some actual value, so I should charge at least $1,000 or $2,000. Uh, it's a— I've niched down, or maybe there's some scarcity around my offer, and so now I can charge $5,000. I don't have a brand, so that's okay. So now you set on— that's $5,000. If your level of certainty is not at least 11 out of 10 on $5,000, even though it's worth it because of this, then just put an offer out for $2,000. Make sure your certainty is there. Make sure it's there. Conversely, if you're like, you know what, actual value, situational value, and you do have a brand, and by all these measures you should be charging $25,000, and you're like, you know what, I don't think I'm certain enough, then just charge $15,000 for the same offer. So make sure you're always certain on pitching your price. That is, that is arguably more important than this value here, but this gives you a starting point so that you know you're not grossly overcharging or undercharging. I trust this was useful. I trust this is valuable. This is the most practical framework that I know that's going to help you determine your price, especially if you're a brand new coach. Now, if you don't know how to get your first 5 paying coaching clients I've got a training video on my channel right now on how to get your first 5 paying coaching clients without posting any content. It's called How to Get Your First Client Online. Check it out right now. I look forward to seeing you on the next video. Remember, keep believing and never settle.