How Do Executive Coaches Determine Their Fees?
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A widely asked question by newer coaches is how much to charge for their services. Likewise, more established coaches continually try to gauge the landscape of the coaching industry to ensure their fees are maximizing their profits.
Executive coaching fees vary widely and the primary factors that affect the fee are:
- How the coaching sessions are delivered, i.e., in-person or virtual
- The length of the sessions, the number of sessions per month and the length of the coaching engagement
- Whether you offer life coaching, wellness coaching, or executive coaching
- Whether you are providing individual coaching, group coaching, or a blend
- The niche or demographic you work with, including what level in the organization they are
- If there are any firm limits on what can be paid to consultants/coaches, such as in some government organizations
- Your experience, references, credentials, and certification level
- Your location and your client's location, in larger cities people are accustomed to higher professional fees
- Your overhead
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Most professional-level executive coaching programs fall in the range of $22,000-$32,000 for a six-month program. Executive coaches charge between $270 to $600 per hour, often based on their experience, and upwards of $1,000 if they are renowned in their niche field.
However, most independent professional coaches do not charge clients by the hour, instead they charge for a "package" or an "engagement." For example, most personal coaches charge a set fee for a particular amount of time, such as six months of personal coaching, one hour per week, for $3,000 for the engagement or $500/month. Executive coaching fees are much higher, hence the average of approximately $26,000 for six months of executive coaching—but that also varies considerably according to factors as described above.
Hourly fees are still important to consider when calculating a coaching engagement fee. To determine the fee a coach charges for a six month or one year contract, an hourly rate is helpful for the coach to have in mind as they are multiplying out the hours of service they expect to deliver and are determining the overall fee to list in their proposal.
According to the Conference Board 2019 coaching fee research, at 2 to 5 levels below CEO, companies paid an average of $500 per hour for executive coaching. I like the Conference Board research, even though it was from a few years ago, because it focused specifically on executive coaching, whereas the International Coaching Federation research, while newer, contains a mix of personal and executive coach respondents, and the personal coaches have lower fees than executive coaches, bringing the average fee down.
The International Coach Foundation's 2020 coach income research found fees reported per one-hour coaching session vary strongly with the coach practitioners' experience, ranging from an average of $300 U.S. dollars per one-hour session for coach practitioners with more than 10 years of experience to $130 U.S. dollars per hour for coach practitioners with less than one year of experience. Moreover, ICF's 2023 coach income research found that the coach's that average from $100,000 -$150,000 per year have an hourly fee of approximately $391 per hour, whereas the coaches earning more than $150,000 per year have an average hourly fee of $574 per hour. The coaches earning these fees are generally executive coaches versus life coaches.
Many coaches find work and bolster their earnings by being an independent contractor to coaching organizations such as BetterUp or CoachHub which pay coaches a substantially lower rate per hour than what coaches can earn when they find their own clients due to the significant overhead that these coaching organizations maintain. Coaches often find these coaching platform organizations valuable as a way to obtain some coaching hours to help fill their available time. In this case their hourly rate might be $55-$95 per hour, but they also have their own private practice where their clients pay them substantially more per hour which takes into account the marketing efforts of the independent coach.
An important point is that customers evaluate professional service value partly on the fee. If a fee is significantly lower than other competitors, it often suggests to the client that the quality of the service will be lower. According to Forbes, one of the reasons why people fail to create a viable business is that they undercharge for their work so this fee information will help you establish a reasonable financial foundation for your coaching practice.
