9) What are the usual fees for executive coaching?

I. Bricks and mortar (face to face meetings)

Multinationals (the Fortune 500)

    In the HBR Research Report “What Can Coaches Do for You?” by Diane Coutu and Carol Kaufman in January, 2009 there is a survey of fees, asked of coaches in the U.S. and the UK (almost half of whom were women). "Compensation rates vary widely: from between $200 to $3,500, though most of you are clustered between $500 and $725 per hour." (The high above is less than that for management consultants who work independently. The U.S. marketing consultant Jay Abraham, for example, charges $5,000 an hour.)* The surveyed executive coaches work primarily with senior managers of major organizations, e.g. the C-suites of the Fortune 500. These are "bricks and mortar" coaches, as distinguished from virtual (on-line) coaching (at the low end, even under $50 an hour) and "bricks and clicks" coaching (at the high end, $5,000 an hour), discussed at Part II.   

    Marshall Goldsmith, probably the leading "soft" coach in the U.S., allegely receives $100,000 and up per coaching assignment for a Fortune 500 CEO. Notable is that he works on a performance basis, accepting a maximum of eight clients at any one time. However also Marshall Goldsmith´s fees are modest compared to that of the premier strategy consulting firms (the "Big Three" being McKinsey, Bain and BCG):

"It will cost you $150,000 a week to get in a team from BCG or McKinsey," one incredulous pioneer told me.  "Four or five million dollars for a six-month project!" another marveled." Walter Kiechel III, The Lords of Strategy, Harvard Business Press, 2010, Note 5 to Chapter 14, p. 330.

    In continental Europe, where coaching is not as well established as in the U.S. or UK, the fees are generally lower. For instance in Germany, the airline Lufthansa has an extensive "soft" coaching program. The fees the coaches for Lufthansa receive have been reported in the press as ranging from 200€ to 320€ an hour.

Small and Medium Sized Businesses (SMBs)

    The 2010 survey by Sherpa Executive Coaching of 500 "soft" (behavioral and leadership) coaches in the U.S. and Canada, most of whom serve the "middle market," showed the majority of rates as falling between $220 and $340 an hour. 

    In Germany coaches for SMBs charge somewhat less. In 2007 Middendorf and DBVC conducted a survey of this market, which also included a large number of people receiving coaching on a private basis (e.g. switching careers). The survey, reported in the Jan. 2008 issue of Coaching Magazine, listed an average fee of 155€ an hour.

    A coach engaged over a franchise such as The Growth Coach (www.thegrowthcoach.com), a U.S. firm, or Action Coach (www.actioncoach.com), an Australian firm would also charge less than those who work with the Fortune 500. At Action Coach the fee (2010) for an Alignment Consultation and Training Day is between $1295 and $5000, typically followed by billing of between $995 and $10,000 a month for the next 12 months.

* Jay Abraham is a legitimate "make-it-happen" entrepreneur. Although apparently he never went to college, he writes well. His recent book is excellent for entrepreneurs and also for people running SMBs: The Sticking Point Solution, 9 Ways to Move Your Business From Stagnation to Stunning Growth In Tough Economic Times, 2009. In it he emphasizes delegation and imaginative ways to partner with other businesses. 

II. Bricks and Clicks (telephone, on-line)  

Gurus

There are Internet entrepreneurs, "gurus," who charge very high hourly coaching fees. The business model is to use on-line sales (e.g. E-books, DVDs, webinars) to funnel people into more expensive live seminars, group training and one-on-one coaching. Sometimes the high coaching fees do reflect demand for the celebrity guru. However one has the impression that sometimes these coaching fees are advertising puffery to make another (frequently on-line) offer appear good value for the money. An example is a recent promotion (2010) for a business seminar by Brian Tracy, a self-help and motivational author. In it he mentions charging $5,000 an hour for one-on-one coaching. However the entire message is about the seminar, with no further information about coaching at all.

Virtual Coaching

At the other extreme, the Internet also offers the cheapest business coaching available. On sites offering virtual employees, such as www.elance.com, one can find, for instance, business plan coaches for well under $100 an hour, perhaps for less than $50.  The Internet coaches are further discussed at the end of the subpage "The Four Lords of Strategy and Coaching R&D."

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