Are you confused about the best pricing method for your coaching programs? In my new video I'm going to discuss the pros and the cons of different pricing methods and which I found best to work for me. There are three pricing methods in particular that are typically used for coaching programs: one-time payments, payments plans, and reoccurring monthly payments.
Let's start with one-time payments. This is by far the easiest way to price your program because it's simple from a bookkeeping perspective, it's easy to track. You’re literally just taking one payment and getting all the money up front. But the biggest con to one-time payments is that depending on how expensive your program is, people may not be able to afford it upfront.
So that’s where payment plans may be a better option. I highly recommend that you offer some sort of payment plan for most of your programs and services because it makes it a bit easier to accommodate for those who might not have as much money upfront. A really great pro for the payment plan is it actually solves the objection to some of the money objections that might come up during a sales call. You can offer more than one payment plan – whether it’s bi-weekly, monthly or quarter.
But the length of your payment plan should not exceed the length of your program. So if you’re doing a three month program, then you don't want to offer a four month payment plan or a six month or even an annual payment plan. You don't want people to still be paying after the program has completed.
Another pro to the payment plan is that it allows for money to trickle in over time. Now a con for the payment plan is that sometimes people do default on their payments, meaning their credit card doesn't go through. But for the most part people are going to be pretty good about updating their credit card information and making sure that payment happens.
It’s important to make sure that you're getting some payment upfront. This may mean your client is paying a higher price point for the first payment and then pay less for the payments that happen after that. The first payment should cover the work you do up front and any expenses to make sure you're not waiting till month two or month three to actually be turning a profit on that client.
An important thing to mention about payment plans is that you need to make sure you are using a system that sets up your payment automatically. What I mean by that is that you don't want to have to be invoicing your client every time a payment is due. System like Stripe or Practice Better can do this automatically.
The final pricing method is a recurring monthly payment model, which is similar to a payment plan, but instead of even offering them an upfront payment, you just tell them it is a recurring payment, so they pay a certain amount each month. And if you do this, I do highly recommend that you charge on the first of the month and then the work happens afterwards. Similar to a payment plan, it’s continuous money coming in and It's very affordable for your client. Now in some cases, retention can be an issue. And what that means is maybe once your program is done, you start charging them a lesser recurring amount just so they have access to support. All monthly memberships have retention as an issue, so you really have to try to make it worth their while and provide enough value that they actually stay.
Of these 3 payment methods, I prefer the monthly recurring option because although it’s really nice to get all the money upfront, I do like the recurring revenue because it meant that I didn't spend it all up front. But it's up to you which model makes the most sense for you, your business and your clients.