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The Fees Dilemma. Should I reduce fees to improve access to career coaching services?

By: Joanne Ostler

Date: 07 Feb 2019

Category: Article reviews

Tags: private practice, fees, cost of service, pricing

The Fees Dilemma. Should I reduce fees to improve access to career coaching services?

A personal perspective: the views expressed here are simply my personal experience and opinions.

This article is based on a presentation I gave at the CDANZ National Symposium, October 2018, and includes aspects of the discussion between attendees that followed (see the Conclusion and Discussion section).

By Jo Ostler

Background

I’ve been in private practice as a career coach for 13 years and in the careers industry since 2001. I was a contractor with Career Services rapuara, as it was then known, when I first started as a careers practitioner.

Since entering self-employment all those years ago one of my biggest and most constant struggles has been around charging for services: how to charge clients and what to charge. Whilst fees create a sense of value (with ‘free’ often related to a perception of low value), fees also create a barrier to service. There are, of course, many other barriers (e.g. location, ease of access, awareness, culture and so on) however this piece focusses only on fees and is only my personal perspective.

Dilemmas of charging fees

Practical and professional issues

In private practice we need to charge for services in order to stay afloat financially, and this means covering substantial costs of ongoing training, accreditation and professional allocations, as well as the usual costs of running a business. Some practitioners secure contract work with organisations such as vocational rehabilitation providers, consultancies, government bodies such as Work and Income NZ, educational bodies and others. Many practitioners, including me, offer services directly to the public and our clients pay out of their own pockets. Therein lies the rub, as only some private individuals are willing and/or able to pay.

But this also raises big questions such as:

  • How can we as practitioners afford to stay in business, and run a sustainable practice?
  • How could we offer services to clients who can’t afford to pay our fees?
  • How do we even know who can and who can’t afford to pay versus those who decide the value proposition doesn’t add up?
  • Do people value that which comes at low cost or free? 
  • As private practitioners, do we have any professional or personal ethical commitment to provide free or low fee services to our client populations?

Mind-set and personal value issues

Most of the practitioners I’ve met are driven by an intrinsic motivation to help and empower others. We just want to help or make a difference. Having to set a value (a fee) around what you are offering is extremely challenging. I have found myself constantly torn between creating accessible services and truly accepting that my services have real value. It’s an uneasy space. Over the years I have given away enormous amounts of free time because I cannot bring myself to charge for services or I think “it’s only time and doesn’t have that much value”

Where do we stand in terms of our personal beliefs and morals around providing career support to others? Clarity around one’s personal values helps in figuring out this piece of the “how to set fees” puzzle.

I give away a lot of time and I will probably continue to do so. I get enormous satisfaction in helping and empowering others, and I also like to think it’s my personal community contribution and sits well with who I want to be in the world.

Options?

There are many potential options for service provision. I’ve listened to others, paid for expert advice and mentorship, and still I struggled. I currently do most of the activities listed below. Some are driven by marketing and a necessary part of gaining clients, but some are about contribution and purpose, including improving access and reducing barriers.

Options (in no particular order):

- Contracting to other organisations

- Working outside the career development industry (portfolio careers)

- Differential pricing – charge less for people with limited finance or in a difficult situation – determined on a case-by-case basis

- Providing pro-bono services

- Offering one-off single sessions (to reduce session time and cost)

- Referring to other free services or resources

- Member/contributor to CDANZ (to support the industry/practitioners)

- Member/contributor to other professional associations (e.g. ICF)

- Writing books/e-books and posting/blogging on social media

- Collaborating with other practitioners/coaches

- Providing free services to particular groups or individuals 

- Mentoring other practitioners working with clients

- Suggesting contributions from employers to cover employee access to independent coaching services

- Speaking/presenting/contributing to events

- Sliding scale of fees: I don’t do this (doesn’t make sense to me)

- Lowering prices across the board: I tried this twice, dropped fees hugely and even down to zero at one point (that’s a much longer story). But it didn’t work. I didn’t get a big influx of clients and all that happened was that I was using my savings. It was an unsustainable model.

Conclusion and Discussion

So – should I lower my fees to improve access? My answer in short: No.

I think we have to get smarter.

I currently do many of the things listed above and have recently written and launched a series of Career E-books on www.careerspot.co.nz. This is a passion and I have to admit, a labour-of-love enterprise.

We need to charge enough to keep a sustainable business and it’s useful to have clarity around our own thinking, mind-set, personal values and what we stand for in order to make confident and clear pricing decisions. I’d like to believe we could price ourselves at the level we deserve – and so we can afford to live!

This presentation generated a LOT of discussion and interest at my session during the CDANZ Symposium. Others talked about their approaches and struggles. One theme that emerged is that private career practice is a tough game financially, unless you hold ongoing lucrative contracts. We don’t attract repeat regular clients (unlike accountants and hairdressers), we incur substantial ongoing PD and business costs, we’ve no security of ongoing income, and New Zealanders are DIY in nature (they just ask a mate for help and do stuff that’s free because they don’t see the value in professional support). On top of all that, until fairly recently we’ve been up against free publicly funded services, or at least the perception of free service, through Careers NZ. 

And most of us are in this, I think, because we are natural helpers – which is not brilliant for profit-making enterprises.

But there’s also a spark. Another theme from some in the room is that times are changing and maybe that brings new and better business opportunities for career practitioners. The future for career services could be very promising. In this fast-changing and amazingly fluid and uncertain world, more people are wanting and needing support. Brains hate uncertainty and lack of control. That’s where coaches/practitioners step in.

In addition, with the demise of Careers NZ perhaps there’s room to continue collaborative conversations between practitioners. I know some practitioners already do this, which is great, and maybe there’s an opportunity to do more. Perhaps there’s even a role for CDANZ in this?

In the meantime, I invite you to check out the new website careerspot.co.nz and view the articles and video interviews with some interesting NZ careers people and entrepreneurs who have something to say.

Wishing everyone happiness and success in 2019.

 

Note: I’ve just signed up for a “Nail your pricing” programme (for solopreneurs) and it looks great! I’ll post about it on LinkedIn and FB, so if you are interested, please feel free to connect with me there - https://www.linkedin.com/in/joanneostler/ and https://www.facebook.com/careerspotnz/

Joanne Ostler

Joanne Ostler

I’m a coach at heart. Clients usually come to me feeling stressed, anxious, frustrated, confused, stuck or lost, and together through coaching we create insight, deepen awareness and make changes.

I’m a Professionally Credentialed Coach (PCC) with the International Coach Federation, a Professional Member of CDANZ, and I hold a number of other career, executive, leadership and stress management training certificates. I was originally trained in a neuroscience coaching approach and am passionate about using neuroscience, stress management systems and other integrated solutions to support my clients to make changes and to feel better.