A posting on LinkedIn’s Life Coaching Teens and Young Adults asked for advice on pricing coaching services to schools. That started my brain thinking about the pricing formula I typically use for in-school, school-partnership, public workshop and private one-on-one programs using the Career Coaching for Students program.

Pricing – and value/ROI – for high school career counseling and coaching is very interesting and important. I certainly don’t have a definitive answer for other coaches but I’d like to share a few discussion thoughts, one formula for pricing and compare that to the per-student cost to deliver a one-semester course.

Note: All examples in this article use “typical” data but a specific proposal always gives consideration to the client’s needs and how the program being delivered is customized to meet that need.

Pricing vs Value/ROI vs Demand

In my corporate work, I have a minimum day rate of $3,500 as a starting point. That fee is neither high nor low, more likely it is about in the average for a consultant/coach to deliver a day’s worth of work in a corporate setting and includes costs such as assessments, books and other supporting materials. If the number of people participating is larger than 15 the fee goes up based on value and expenses on a per-person basis.

For example, I am about to kick off a high-potential coaching program for 15 employees of a large multinational corporate business unit that includes an opening 2-day program, four months of one-on-on coaching and a closing 2-day program for a fee of $55k+. What does this have to do with schools/colleges? I think I have a lot to offer to schools. I would love to be full-time in that venue. Unfortunately, corporate clients tend to value my services greater. The irony is that if an education institution went all-in with say a thousand students in my Career Coaching for Students program over a 4 year contract, the math would work out ok for me (not great but doable). Most school administrators and college career centers think on a much smaller scale – especially when it comes to outsourcing a service they want to deliver with in-house teaching staff. From my information, the in-house staff model is failing – resulting in a great deal of wasted $$ and low-to-no benefits for the school or the student.

At the college level, student participation in a college’s career exploration coaching service within the career center is less than one percent of the college’s student population according to several articles and social media postings by Career Center Directors. One thing we know is that students will recommend or not recommend to their friends based on a program’s value – regardless of if it is free or fee-based. If a program isn’t growing and the value isn’t driving demand, it is likely not being recommended by students to students. Having less than one percent participating in a service tells me students are “not” recommending the offered program to their friends. With a low participation rate, college presidents decide to fund other programs. But the need for credible career coaching remains a “big” need as evidenced by the “average” number of changes in majors per student in college and the average number of semesters to graduate with an undergraduate degree.

For those of us in the coaching profession, there is great economic diversity. Some professional coaches are the primary bread winner in the family. Others provide coaching services as a secondary and discretionary family income. If you fall in that latter category of “discretionary income” coaching, you might look at volunteering. If you don’t need income to live on and are in a position to do volunteer work, volunteering is a great and noble thing to do. Many high schools and colleges may consider you but you may also find trying to volunteer to be as frustrating as pricing for your services. I see too often those in the coaching profession who have the spouse’s income providing for the primary financial needs of the family. The need to price professionally isn’t as great and consequently, there is a low-ball pricing mentality. My opinion is that our passion for coaching (serving the needs of others) shouldn’t dictate our pricing strategy. I suggest you try to identify what the benefits will be for the client and price based on value – not based on a minimum income requirement.

A Pricing Formula for In-School Offering

The following is a general formula that I use for nonprofit/education institutional pricing proposals. My belief is that I either choose to volunteer or I choose to propose a professional solution that adds real value and price the proposal accordingly.

Sample educational institution pricing formula for Coaches:

1. Calculate a desired hourly rate. What annual amount of income from coaching are you wanting? In other words, how do you value yourself in this profession on an annualized basis? Example: Let’s say you have a goal of $50,000 per year from coaching. And you think, “if I reach my ‘goal’ of 30 hours per week (pretty much full time), I will be pleased”. That equates to $50,000/2080 hours = $24.00 per hour (nothing for vacation, insurance, home office expenses).
2. Double the hourly rate. This covers your personal expenses, taxes – any general costs of doing business and time for marketing to this client = FINAL HOURLY RATE.
3. Determine all program delivery expenses (student materials, reproduction costs, etc.). Calculate down to the per student cost.
4. Calculate the Total Program Delivery Rate. How many hours for delivery + how many hours for prep = Total Hours. Take Final Hourly Rate x Total Hours = Total Program Delivery Rate
5. Calculate Total Raw Cost. Multiply # of student participants x per student cost =  Total Raw Cost
6. Calculate Total Cost. Multiply Total Raw Cost x 1.25 = Total Cost
7. Calculate Proposal Amount. For Small one-class proposal: Add Total Program Delivery Rate + Total Cost for a Proposal Amount.
   For a Large, multi-class calculation: [Total Program Delivery Rate x # of classes of 25 students] + Total Cost = Proposal Amount

Program Benefits and Goals:

For fun, let’s test this with a program called Career Coaching for Students delivered in a high school class room setting for one semester (http://www.careercoachingforstudents.net):

The expected benefits need to be articulated and assigned measures that we can refer to later. Here is a short list of expectations for the Career Coaching for Students program:

• Higher overall student academic engagement
• Lower drop out rate
• Greater percent of students with a plan for post-secondary education
• Higher average class GPA at graduation
• Higher SAT/ACT test scores.
• Less higher education costs for students and parents (due to less changing majors and graduating on time from post-secondary education).

Applying the Pricing Formula – A Simple Example for the Coach

1. Annualized net personal income goal: $50,000 = $24 per hour
2. 2 x $24/hour = $48 hourly rate
3. Program Delivery Expenses per student (binders, assessments, online student resource center):
   $129 for 50 students
   $99 for 350 students (we can lower costs dramatically when we have higher quantities, plus customize the binder with the school’s name and mascot)
4. Program design.
   One class time per week for a semester for a class of 25 students.
   15 weeks per semester = 15 delivery hours for 25 students = .6 hours per student PLUS prep hours of 10 hours (rounds up to 1.0 hour per student)
5. Total Program Delivery Rate
   $48 x # of hours (25 students = 25 hours in this example) = $48 x 25 = $1,200 Total Program Delivery Rate
6. For a smaller program of 50 students: 25 students x $129 = $3,225
   For a larger program of 350 students: 350 x $99 = $34,650
   =Total Raw Cost
7. Total Cost
   For smaller program: $3,225 x 1.25 = $4,031 one class of 25 students
   For larger program: $34,650 x 1.25 = $43,312 for 14 classes of 25 students
8. Proposal Amount
   For one semester, one class of 25 students: $1,200 + $4,031 = $6,231
   For one semester, larger program of 350 students, 14 classes:
   $34,650 + 43,312 = $77,962

Analyze for Cost/Value Proposition:

Career Coaching for Students offered in-school:
Small one-class program cost per student: $249
Large program, multi-class cost per student: $223

To compare, as a publicly offered program to families, we average around $500 per student in a group workshop setting of 10 – 15 students for a 12 – 15 hour program. One-on-one for the CCfS program (about 12 – 15 hours) is $750+ per student (higher on the East and West coasts).

vs the Cost for One Teacher-Delivered Course in High School

What is the cost per student for any high school course? To be more exacting you could do the following calculation:

Teacher hourly salary rate x [# of hours for class + # of prep/support hours]

or  use a simpler calculation:

Teacher annual salary ($57,000) divided by # of classes taught over two semesters (14) divided by average # of students in the class (25)
References
http://money.usnews.com/careers/best-jobs/high-school-teacher/salary
http://new.every1graduates.org/wp-content/uploads/2012/03/OVAE_Cost_of_SLCs_Final_Balfanz.pdf

Teacher-Delivered Cost per Student

Teacher = ($57,000 / 14)/25 = $162 per student per class.
Of course adding school payroll burden for benefits and retirement of approximately 30% = $162 x 1.30 = $211 per student as a minimum. Double that to cover physical buildings and staff overhead which brings the teacher-delivered cost per student per course up to a more realistic $422 per student per course.

Your Pricing

Based on teacher-delivered pricing, you have room to price your offering in a way that is a win-win for you and the school. Keep in mind you are being given the facilities within the school and you are benefiting from the administrative overhead and lower overall marketing costs so it is not realistic to set a price of $422 per student for your offering. The price you want to stay closer to is the $211 per student for  a work agreement of 15+ students on one or two scheduled days per week.

Doing single student counseling/coaching with a school district? You need a contract based on multiple students in a semester that you will be providing one-on-one services to. That might be an estimate but at least you see what kind of interest, if not commitment, the school district has in using you.

Carl Nielson is Chief Discovery Officer of Success Discoveries and Managing Principal of The Nielson Group, an organizational development consulting firm serving Fortune 100 company clients. As creator and master trainer of the Career Coaching for Students program for high school students and Career and Success Skills Mastery for College Students and Recent Grads, Carl and his team of licensed facilitators across North America have helped thousands of students find a better way through a career exploration process that works.  Self-directed assessment and career exploration coaching packages start at $399. Local public workshops, distance-coaching and in-school programs available. Call for more information at 972.346.2892.