The Value of Coaching, its ROI, and How to Maximize Both

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When a client or a company-client first time looks at coaching as a growth instrument, they ask themselves a valid question: What will I get for my money?

Meaning

• what is the monetary value of coaching?
• What is the ROI?

Return on Investment = (gain from investment — cost of investment) / cost of investment

It doesn’t matter who is asking — a company or an individual, a client needs a clear picture to make a decision and make sure things are developing in the right way.

The Value of Coaching

Clients come into the coaching agreement with one of the two typical ways of looking at the coaching fees: cost and investment. Unfortunately, it is not enough to change your language and internal belief to “coaching is an investment, not a cost” to immediately create value from a coaching relationship.

As a new coaching client, you might not even know where to start understanding what coaching can and will bring you if you do the work.

As an experienced coaching client and a coach, I believe that coaching does the following for you:

• It saves you time and gives you speed. You will get faster and “cheaper” at where or who you want to be.
• It helps to gain clarity and keeps you focused. If you are not getting to where you want to be, you will know why this is happening. And then you can course correct.
• It leads you to your real desires and goals vs. “I think this is the right direction” and, as a result, saves your time.
• It gives you stability and helps you avoid rollbacks. High speed does not always mean you get to the results faster. It might just mean you can go two steps forward and 10 steps back very quickly. Coaching helps you to prevent the rollbacks, or even if they happen, understand and keep an eye on where they might appear in the future.
• It saves your sanity, and makes you resourceful, self-confident, and resilient.

And much more.

How to calculate the Monetary Value?

There are 3 periods in which you might want to calculate the monetary value of coaching and its potential ROI: at the beginning, throughout, and at the end of the coaching relationship. The number is there to inform the coaching relationship. Not to define it.

Both the client and the coach are responsible for gaining clarity regarding coaching value and ROI. And both are equally responsible for checking in whether the coaching relationship is still on track and whether the coaching objectives need an adjustment.

How can you do it?

Here is a short process of how you as a client can approximate the potential Monetary Value of Coaching before speaking to a coach and align it with the coaching investment.

Step 1: What is your current pain point or an opportunity?

Look at what you’ve got at the moment. Typically clients describe those like the following: high churn rate and/or my best people are leaving the company, unfulfilled personal and company potential, risk of burnout and energy management, the need for faster growth (personal and company), reinvention of the company or business streams, better and clearer communication and relationships within the team, fulfillment from the work I do and business I build… you name it.

As you see, the topics range from personal to company topics, from short-term to long-term, etc. Whatever bothers you or inspires you is a good place to start. Don’t overthink it.

Step 2: Desired Future State

Now imagine you reached the best possible scenario; everything is working as it should. What do you see around you? What did you create? What was the improvement? How did it influence your company and your business? What traps did you avoid? What resources did you save?

The trick here is to switch off your inner critic and skeptic and first really dream. The inner critic doesn’t live in the future; it is a product of your past. Your inner critic looks into the past to explain to you why it won’t work.

Step 3: Put a number on it.

What can you measure? A number of hours wasted? Resources spent? Churn rate? Cost of not following this opportunity? Market position lost? Low efficiency? Unstable outcome? There is definitely a number you can attach to it. It doesn’t need to be a monetary value just yet.

Step 4: Put a price tag on it

And here is where we look at the monetary value. How much can you save, gain or create if you achieve the desired state? What will be the capitalization or valuation of your company? How much money or hours can you save?

The number can also show up differently. Savings on doctors because your body doesn’t suffer from a never-ending burnout. Savings on divorce lawyers, therapists, etc., because you have a healthy and happy family relationship, etc., next to your thriving business.

The trick here is not only to look at the gain but also at the potential loss and its elimination. Here is a simple example:

Your company is falling apart; you might need to close it down. You might be able to turn it around, but let us look at the scenario where you might need to walk through the path of bankruptcy and layoffs.

Here the value of coaching is in kept relationship with investors, partners, and employees, lower cost of contract closing, and your personal potential of building a new business in the future, which is also achieved by working through the emotional background of the bankruptcy and “failure.”

Even if the current company goes in flames, how much will you pay for not arresting your potential and not losing the next two years on shame, guilt, and rebuilding relationships?

By now, you should have a number.

Step 5: Looking for the right Coach

You meet a coach, and a coach gives you an offer. Ask yourself the following questions:

• Do I believe that a coaching relationship with this person will bring me to where I want to be?
• Do they have relevant experience and mindset to support me on this journey?
• Do I trust this person enough to openly communicate the monetary value and the ROI I am striving for? As well as what is missing for me in the coaching relationship?
• Do I respect this person enough to create an equal partnership and be challenged and stretched within this coaching relationship?
• Do I believe that this coach understands and measures their impact?

You and your coach are a tandem that cycles together towards that ROI. You will experience bumps on the road, rollbacks, sidetracks, and open communication, trust, and mutual respect will make sure the ROI is maximized.

Coaches who work with founders and execs need to keep their “impact” on the client’s businesses in mind. If their rate is detached from the impact they are creating for their clients, then you know you are in the wrong place.

As much as you measure the Monetary Value for yourself, they need to know how to guide a client through the same thinking process and help them understand whether coaching as an instrument is worth the money now.

Step 6: Do the ROI reality check

Please note that a coach can not guarantee you a certain ROI or make sure you get there. The work is on you, and no one can “coach you into something” if you pay a certain amount of money.

Do not take loans or hope that coaching will miraculously change the reality you are in. Coaching can be lots of things, but not a magic pill. Hard work is still required.

Do not hope that coaching can substitute certain competency training, consulting, legal and financial advice, etc. Be real, don’t put full responsibility for your success on a coach, and make sure the coach you are about to choose is not overpromising.

How can a Coach help you to maximize your coaching ROI?

Needless to say “it takes two to tango” — both you and your coach are contributing to the coaching relationship and your success.

There are certain ways how your coach can help you to maximize your coaching ROI. Your coach can help you to:

1. Create a trusting relationship and safe container within the coaching relationship for your process
2. Develop Coaching Objectives (opportunity, problem to avoid, solve a problem, etc.) and criteria of success for the whole coaching process as well as for every single session
3. Help you to uncover the way you measure and attach value
4. Help you see the successes and impact of your efforts on the monetary value that you would like to gain
5. Keep your objectives a priority or adjust them along the coaching journey
6. Keep you accountable
7. Help you see where you are wasting your potential, resources, time, etc. or in which areas you are resistant to change.
8. Help you identify the costs and benefits of certain options
9. Highlight or help you discover your blind spots

I hope this process and the tips will help you make an informed decision on the coaching value and the potential investment next time you start a coaching journey.

If you have any questions, don’t hesitate to ask hello@olgaskipper.com