The Business of Coaching
An Interview with Stephen Fairley
What was the inspiration behind writing this book?
I started this research as part of my doctoral dissertation.
I wanted to examine the differences between successful and unsuccessful
coaches. After looking at many of the programs and products available
on practice building for coaches, I found virtually all of them
to be based on one thing-a person's personal experiences of becoming
successful. They seem to follow a common theme of trying to replicate
one individual's success formula.
I also found a lot of myths and misconceptions floating around
the coaching community on how to build a successful practice.
I wanted to be a part of dispelling these myths using real world
research. However, I couldn't find any research-based approaches
and so I went out and conducted the research myself by surveying
over 300 coaches nationwide to determine the actual factors that
lead to success.
And in the book you've defined specific areas of
success in coaching?
Success is very individualistic, for some people it means having
more freedom and for others it may mean finding a sense of purpose
in life. For this study, I defined it in a quantifiable manner,
financial success. There are 3 categories of success discussed
in the book:
- Financially unsuccessful coaches: people who make less than
$20,000 a year just from coaching.
- Financially successful coaches: people who make more than
$75,000 a year just from coaching
- Highly successful coaches: people who make more than $100,000
a year just from coaching.
This is revenue generated solely from one-on-one or group
coaching. It did not include consulting, speaking, or training.
You conducted some ground breaking research into
the business practices of coaches nationwide. Could you tell us
more about your research?
I believe this is the very first survey of its kind. In 2002,
I surveyed over 300 coaches nationwide to discover what worked
and what didn't in terms of: sales & marketing practices,
finances, packaging and pricing their services, partnering with
other coaches, coach training and certification, and a number
of other areas. Then I analyzed the data to find out what specific
areas separate financially successful coaches from financially
unsuccessful coaches. The results form the foundation of this
book.
Can you share some of the most interesting findings?
Some of the statistics are quite startling:
* 73% of all coaches make less than $10,000 in their first
year.
* Only 60% of all second-year coaches have managed to find
10 paying clients.
* Less than 11% of coaches make more than $50,000 by their
second year in practice.
* Even though coaches charge an average of $160 an hour for
their services, 53% of them make less than $20,000 a year.
* 30% of all coaches have never been able to find 10 paying
clients.
* Only 9% of coaches are currently making more than $100,000
a year coaching.
* One of the chapters in the book is "The Seven Secrets of
Highly Successful Coaches".
Tell us more.
In addition to surveying the 300 coaches nationwide, I also personally
interviewed over a dozen of the top personal and business coaches
in the United States and they were very helpful in sharing their
"insider secrets." I then compared these real strategies given
by real coaches with the other data I obtained from the survey
and here are a couple of these secrets:
1. Highly Successful Coaches Don't Sell Coaching
Even though it may seem contradictory at first, a big secret
of top coaches is that they don't sell coaching because coaching
is simply the tool they use to obtain the results. Instead, they
focus on selling the benefits they offer, the value they provide,
and the results they achieve.
For example, some of the benefits of your individual coaching
could be:
- Increase in employee productivity
- Less conflict between team leaders
- Better communication between departments
The value you provide could be:
- You are available to your clients for quick consultations
via phone and email anytime between scheduled sessions
- You are within easy driving distance and can meet with them
at their office for no extra charge
- You have 15 years of experience in corporate America working
with managers and team leaders on improving their communication
skills and interdepartmental relations
And the results you achieve could include:
- 75% of your clients report increasing their productivity
by more than 60%
- Executive teams report significantly less conflict after
just 4 meetings with you
- Your average client increases their salary by more than $20,000
annually after working with you for more than three months
- The typical sales professional you work with increases their
annual revenues by 25-35% within six months
Remember, coaching is simply the tool or the process we use to
solve problems and help clients achieve results. Don't sell the
process-sell the solution.
2. Highly Successful Coaches Productize Their Services
Here in the United States, we have gone beyond a post-industrial
society and are passing through a service-based society. We are
now in the beginning stages of an information-provider society,
where the most valuable people will be those with access to the
best information and a heightened ability to rapidly sift through
that information to provide solid answers to serious questions.
Being seen as a resource and "information-guru" will be increasingly
valuable in our society and one of the best ways coaches can do
this is to productize your services. Top coaches actively find
ways to package and sell their knowledge and information through:
printed books, how-to manuals, CDs, tapes, CD-ROMs, e-books, e-zines,
and videos.
Highly successful coaches recognize that creating information-based
products has several benefits including:
+ Creates opportunities for multiple streams of revenue
+ Enhances your overall credibility
+ Encourages you to think clearly about who you are, what you
do, and how you help
+ Opens up doors for speaking engagements and seminars
+ They can be sold on-line 24/7
+ The amount of money collected is not limited by your available
time
+ They are a strong advertisement for your services
+ Products can be sold anywhere in the world at any time
The five keys to creating products that really work are:
1. You must really believe in your product and have a passion
for it
2. It must be a quality product. Don't every mistake quantity
for quality when it comes to creating products
3. It must subtly promote your services and other products.
Blatant promotion is a turnoff and actually damages your credibility.
4. It should be easy for you to create. Find products you can
create within a couple of weeks to a couple of months.
5. It has to tap into a real need. Find out what your target
market needs then create a product around it. A sure way to
fail is to reverse the process by creating a product that no
one really needs.
It must have a high profit margin. It's very difficult to make
money on a product that sells for less than $30. If your product
is priced at less than that find a way to significantly increase
its value to your target market, then increase the price.
3. Top coaches hire their own coach.
73% of full-time coaches make less than $10,000 their first year
doing coaching. Based on my research, there are only three ways
a coach will make more than $75,000 in their first year of business:
a) They have been doing traditional consulting for a long time
and they are a recognized expert in a field and decided to add
"coaching" to their practice.
b) They were recently in a position of influence or power at a
mid to large company and when they left, their former company
became their first and biggest client.
c) They hired an experienced, highly successful coach to work
with them one on one.
Of these three ways, the only way most people can really influence
in their favor is the third one because either you have been consulting
for a long time or you haven't. Either you've recently left an
influential position at a large company or you haven't. But anyone
can hire a successful coach.
Will this guarantee your success? No. Can you be financially
successful in your first year without hiring a highly successful
coach? Yes. I'm not talking about a guarantee or blind luck. What
I'm talking about is significantly increasing your odds for success.
Based on the responses of more than 300 coaches nationwide, hiring
an experienced, highly successful coach is one way that new coaches
can immediately push themselves to the top of the financial pile.
However, here is the big caveat, and any coach considering hiring
a coach needs to hear this-hiring a coach does not guarantee success,
because 65% of all coaches making less than $10,000 also hire
coaches. It depends on what kind of coach you hire, the area of
expertise that coach has, and how effectively you use them.
There are a number of specific questions I mention in my book
that you must ask before working with any coach, starting with
being clear about exactly how that coach will help you build your
business and find more clients, rather than helping you develop
your personal life.
Every Coach who starts a coaching practice fully
intends to succeed, yet many still fail. Why?
Some of the most critical findings from the research are in the
areas of the mistakes coaches make that significantly increase
their risk of failure, that's why I devote a whole chapter to
them in the book. Here are three of them:
Mistake 1. Believing in the Myth of the Field of Dreams
One of the most common mistakes I see coaches make is buying
into what I call "the myth of the field of dreams." If you recall
the movie then you will likely recognize this phrase-"build it
and they will come." When applied to starting a business, it's
the false belief that, "All I need to do to start my coaching
company is tell my friends and family about it and then it will
grow all by itself. Then I can basically wait for people to line
up at my door."
Unfortunately, reality indicates it just doesn't happen like
that, unless your close friends or family members are the Gates,
the Bushes, or the Buffets. If it did, everyone who started a
business would become successful, but year after year 40-60% of
new start-ups fail.
"Officially" starting a coaching practice can take little more
than having the idea and $200 for some business cards and a phone,
but building and growing your practice to the place where it provides
a constant stream of revenue and satisfaction takes a lot of time,
energy, and resources. Don't let anyone tell you differently.
For 98% of all successful coaches, building their business is
something they did over a period of months and years, while expending
a lot of energy, and pouring all their resources into it. The
other 2% who built it in less than a year experienced a series
of fortunate breaks that quickly launched them into the big leagues
or left their regular job with a large coaching contract already
in hand.
Make no mistake, the majority of small businesses fail within
four years. There are two important questions you must ask yourself
before starting your coaching business: (1) What are the top causes
of business failure? (2) What will I do differently to significantly
increase my chances of success?
According to the Small Business Administration and Entrepreneur
magazine, the two most common causes for small business failure
are:
Undercapitalization-lack of available funding when starting
Lack of revenue stream-inability to generate revenues by finding
new clients
Mistake 2. Targeting the Wrong Markets
Another big mistake I see coaches make is targeting too large
of a market or one that does not meet the right criteria. Your
ability to quickly and explicitly identify who your ideal target
is will pay early dividends when it comes to saving you time,
energy, and money.
The more specific, and narrow you can make your description of
your ideal market, the better off you will be when it comes to
easily identifying prospects in a crowd, recognizing prospects
when you meet them at networking events, selecting which networking
groups to participate in, and determining which organizations
you want to speak to.
Mistake 3. Using passive marketing strategies versus active marketing
strategies
Some years ago when I first started out as a consultant, I met
with a marketing coach to talk about targeting my ideal client
more effectively. She asked me to give her a comprehensive list
of every marketing activity I was doing. After looking at my list
her reply was, "Stephen, everything you're doing is passive."
At first I didn't understand, but as she explained, I saw a theme
emerge. I was constantly busy doing marketing activities, but
they were all passive or reactive ways to trying to find clients.
I was waiting for people to come to me instead of going out and
finding them.
Here's a brief list of passive marketing strategies and their
alternative, active marketing strategies. In my book I go into
great detail about dozens of other active marketing strategies
you can use to find new clients fast.
PASSIVE
MARKETING STRATEGIES |
ACTIVE
MARKETING STRATEGIES |
| Sending out direct
mail letters, postcards, or flyers announcing my company,
services, website, or a new workshop I'm offering |
Calling everyone
I sent the direct mail pieces to until I actually talk to
them and asking them to attend or sign up |
| Sending out emails
inviting people to take advantage of my free coaching session |
Getting people to
commit to a face to face appointment by directly asking them
|
| Researching area
associations that I can speak to |
Calling a list of
ten organizations every month and inquiring about speaking
opportunities |
| Creating a speakers
package I can send out to meeting planners |
Following up with
a meeting planner's request for information and asking them
to let me speak to their organization |
| Reading books and
trade magazines to find out what the current industry challenges
are |
Cold calling the
decision makers at specific companies that I have targeted
because of my research |
| Redesigning my coaching
website |
Tracking visitors
to my website and then personally inviting them to my upcoming
seminar |
| Following up with
emails that come to me from my website |
Sending out targeted
email campaigns that drive people to my website or give them
a limited time offer and asking for action |
| Doing competitive
analysis on my competitors |
Contacting potential
referral partners and setting up face to face meetings with
them |
| Writing or reworking
the company brochure |
Handing the brochure
out to good prospects I meet at networking events |
| Participating in
teleclasses, seminars, and coach training |
Giving a teleclass,
seminar, or workshop to my target market |
| Practicing my coaching
skills on non-paying clients |
Giving free coaching
sessions to people who can afford coaching |
How would you sum up "Getting Started in Personal
and Executive Coaching"?
Building a successful coaching practice isn't magic or rocket
science. It follows the same principles and guidelines as building
any other small business. To create a thriving coaching practice
you must devote a lot of time, energy, and resources and manage
it like a small business.
Stephen Fairley, president of Today's Leadership Coaching,
is a Business Coach, a speaker, and the author of 3 books including
"Getting Started in Personal and Executive Coaching." He can be
reached at Stephen@TodaysLeadership.com
or +1-888-588-5891. You can order his book from Amazon.com
or from his website: http://www.TodaysLeadership.com
