Business of Coaching

The Business of Coaching: Thriving During Hard Economic Times

During times of recession or economic downturn, people in non-traditional jobs get very nervous about doubling down on a career path that may provide immense satisfaction but feels riskier than the traditional nine-to-five. For 99% of professional coaches, this is a non-traditional job, which means that most professional coaches are, in some form or another, business owners... whether they realize it or not.

The Business of Online Coaching: Thriving in Hard Economic Times

By: Matt Reynolds, Founder and CEO of Barbell Logic

If you are interested in the business side of coaching, Matt will be presenting along with Jordan Stanton, CJ Gotcher, Andrew Jackson, and Niki Sims at our first Business of Coaching Webinar.
CLICK HERE to learn more about the Business of Coaching Webinar.

During times of recession or economic downturn, people in non-traditional jobs get very nervous about doubling down on a career path that, while it provides immense satisfaction, feels riskier than the traditional nine-to-five. For 99% of professional coaches, this is a non-traditional job, which means that most professional coaches are, in some form or another, business owners… whether they realize it or not. We are independent contractors, gym owners, online coaches, and entrepreneurs. That means our success and our failure ride not only on our skill as coaches but also on our business acumen—the ability to provide high-value services with low overheads, build a client base, and maximize returns on the investment in a coaching career. Unfortunately, coaching skill does not translate to skill in running a business, and with current economic conditions what they are, it can be overwhelming or daunting to cast your die in this industry.

It does not have to feel that way. The fitness industry is massive and robust enough to withstand tough times and support the individual coach, the gym owner, the online coach, and even the fitness influencer. As a coach, you need to address the central problem of a tight economic season in a way that allows your business to run smoothly and efficiently while you focus on building career capital as a professional coach.

The Central Problem: Coaching is a Luxury Service

For those of us in the business of coaching, our services are often seen as a “luxury.” A luxury good or service is something that will have big swings in demand with relatively smaller changes in people’s spending power. Put into our context, if we are not intentional about providing extreme value in our services, we will be one of the first things our clients cut from their monthly expenses when it is time to tighten their budgets.

I believe we can avoid the typical volatility of luxury services by doing three things, two of which help redefine coaching as a high-value staple, and the third insulates your coaching business against market changes.

If we are to survive thrive, we must accomplish three primary goals:

  1. Provide extreme value and high efficacy in support of our clients’ goals.
  2. Build trust by showing excellence with three key traits: ability, integrity, and benevolence.
  3. Obsess over efficiency and dollars per hour without sacrificing service to our clients.

The Value Equation

At a basic level, all businesses survive, thrive, or fail due to the Iron Law of Economic Survival, otherwise known as “The Value Equation.” Or, as Warren Buffett said, “Price is what you pay, value is what you get.” The truth is that not all clients or potential clients will see coaching as a luxury. For some, coaching is an absolute necessity. The difference between the two is how they perceive the value you provide. My favorite book on this subject is “The Rebel Allocator,” an easy-to-read fictional story about a young man’s lessons learned from an older, wiser investor.

The Value Equation

The image shows the relationship between cost, price, and value for a successful business. “Cost” stands for the entire economic cost to the business owner of providing the service. “Price” is what a client pays for the service. “Value” is how the client perceives the service. In the arrangement above, cost < price < value makes the arrangement of services beneficial for both the business owner and the client.

How to Provide Extreme Value

The greatest value we can bring our clients is in providing a high level of efficacy to their goals. “Efficacy” is simply the ability to produce an effect. Why did they hire you in the first place? What are they trying to accomplish? If a client wants to lose weight and you focus entirely on PRs, then you missed the mark on providing the effectiveness (and thus value) they desired. Too many coaches get stuck in a one-size-fits-all approach that will force a client into a particular path—one they often wouldn’t have chosen.

Our first job as coaches is to listen to our clients, help quantify their goals, and effectively move them in that direction. You also improve your impact by playing to your strengths and improving your weaknesses as a coach: reach out to the types of clients you know you can help, but also learn to serve a broader range of clients and goals.

Building Trust

Our COO and TurnKey Coach Product Manager, Andrew Jackson, gave an amazing lecture at our staff conference this year on “The Coaching Value Equation,” where he presented the argument that value is best built by earning trust through three key traits: ability (can they?), integrity (will they?), and benevolence (do they care?). (See, e.g., Mayer, Davis, and Schoorman 1995; Schoorman, Mayer, and Davis 2007.) In the figure above, trust is the buffer between price and value. Where there is more trust, value will exceed price, and you will have a greater moat of safely keeping the client long-term. If price approaches and eventually exceeds value, you will lose the client, and what could have made the difference is a collection of small acts that build and maintain trust.

Losing Trust

As trust diminishes, value and price are more likely to switch places. Where value < price (as in the above arrangement), the client has no reason to continue paying for services and will soon leave.

Ability (You Can)

The ability of the coach most commonly waxes and wanes over the life of the client. All good coaches should be able to coach a novice lifter. But as that lifter becomes more advanced and their goals more specialized, the coach’s ability to help move them towards that goal could improve or deteriorate based on the coach’s knowledge and experience with clients who’ve had similar goals.

It’s via your ability that you give clients permission to trust you, both as new clients and as they grow and develop. Coaching ability is much more than understanding the “hows” and “whys” of lifting. Ability comes from the acquisition of knowledge, effective communication, and experience. It is where the form and the function of coaching meet.

As coaches, we must have a never-ending pursuit of knowledge and intentionally improve our communication and coaching ability through months, years, and decades of earned coaching experience. Our Barbell Academy exists to help speed up the learning curve for newer coaches and act as a resource for experienced coaches’ continuing education.

Integrity (You Will)

Very simply, do you follow through with what you say you’ll do? Do you help your client reach or move toward their goal? Do you make the programming changes you said you’d make? Do you show up on time, every time, for in-person coaching, and/or respond in a timely manner for online coaching? Do you look and act professional? Every contact point between you and your client helps build or erode trust through integrity, and whether we like it or not, integrity is difficult to build and very easy to lose. We must take our reputation and integrity seriously in our interactions with clients, since lapses in integrity are the quickest way to erode trust and diminish value among our clients.

Benevolence (You Care)

We are in the business of coaching and serving people—not machines. Coaching is not clinical—it’s personal. From the moment we launched Barbell Logic Online Coaching, our goal was to serve our clients (and staff) better than anyone else in the industry by “creating connections for the world to experience a life improved by strength.” Though we are professionals, it’s ok to be vulnerable (professionally) at times with our clients, to ask them about their family, work, or hobbies outside of training.

Professionalism is not the absence of a relationship with your client. Rather, the professional understands that people’s goals may be intensely personal and engages those goals with empathy and competence. For coaches, this usually means we have to listen well and address clients’ concerns directly. We must focus on building appropriate relationships with our clients so that they know we genuinely care.

The greatest way to build trust, and thus value, is to consistently show your client you can (ability), you will (integrity), and you care (benevolence).

Trust Graph Integrity

Showing the relationship between trust, benevolence, ability, and integrity where perceived integrity can vary over time.

Value Goes Both Ways: Cost vs. Price

Building trust through our ability, integrity, and benevolence drives clients’ perceived value up, allowing us the flexibility to charge a premium price for premium coaching, while keeping that price well below perceived value. Eroded trust due to lack of ability, integrity, or benevolence doesn’t just reduce the perceived value. It will also reduce the price you can charge and still keep a safety moat between price and value, or you’ll risk losing the client.

However, OUR perceived value of the client-coach relationship is equally as important. Those of us who have ever taken on a high-maintenance client, often at a discount, know the pain of coaching someone whose price doesn’t justify the cost. I struggled with this in my first business as a gym owner, where I would frequently give concessions in price to get a client to sign up for personal training, only to have that client want to train on a strange schedule, show up late, miss sessions, abuse texting and phone call privileges, and then (in some cases) even ask for refunds.

The Value EquationIn the same way that value must exceed price for the customer, price must exceed cost for the coach. The buffer between cost and price is profit—and again, we aren’t speaking strictly about monetary value. One of the first things coaches often do during an economic downturn is cut their price, moving the price closer to cost and further away from perceived client value. However, I would strongly caution against this, as most coaches who do so find themselves in a never-ending cycle of sales and promotions in an effort to reduce price. The end result is often little profit and much burnout from the coach.

Obsess Over Coaching Efficiency

Far too few coaches ever consider coaching efficiency, whether in-person or online. Becoming a more organized, efficient coach reduces costs and increases profit without manipulating price.

Now, this is the part where I often get pushback from (usually good) coaches that tell me that “increasing efficiency or reducing the amount of time per client will have a direct negative impact on service, thus eroding trust and perceived value.” But our experience has shown that this isn’t the case at all. Rather than considering a reduction in service to your clients, strategize how you can reduce the cost of time, money, and stress in order to maximize profit, especially where there is no impact on the client. The best opportunity to improve efficiency without reducing value is to identify and eliminate non-value-adding work, or waste, from your coaching practice. By eliminating waste, a coach can free up time to add even more value.

Improve Non-Interaction Efficiency First

Non-interaction efficiency refers to places in your life and around your work that you can make more efficient with zero negative impact on customer service whatsoever.

For example, for in-person coaching, you could—

  • Reduce commute time to the gym by moving closer to where you work, coaching out of a gym that’s closer to your home (or, better yet, IN your home), or rearranging coaching hours so that you aren’t commuting during rush hour traffic.
  • Reduce the cost of your space: starting in (or moving to) your garage or to your own small industrial space.
  • Reduce the downtime between clients (especially if late morning hours and mid-afternoon hours are times when you are just sitting around the gym). You think you make $60/hour for coaching clients, but if you coach clients at 7 am, 9 am, 12 pm, 3:30 pm, and 5 pm, then you made $300 for the day while being at the gym for 11 hours which = $27/hour, not counting getting ready, putting on your polo, and your commute. Instead, choose to coach larger blocks of back-to-back time, say from 6 am-10 am, and watch your earnings per hour skyrocket. Note: You’ll be surprised at how often your clients will conform to your schedule rather than you having to conform to theirs.

For online coaching, you can:

  • Utilize undistracted blocks of time and space for work. Don’t work where you watch tv, sleep, eat, or play. Turn off all phone and computer notifications. Use pomodoros for maximum work output efficiency.
  • Upgrade your internet (upload and download speed). The cost for significantly faster internet is usually less than $40/month but will save you multiple hours every month in efficiency.
  • Upgrade to a faster computer (again, new fast computers can often be purchased for under $500, paying for themselves in efficiency savings within the very first month of use).
  • Upgrade to the newest browser and software versions.
  • Learn keyboard shortcuts (you’ll be amazed at how much time they save).

Interactive Efficiency Second

As you become more of an efficiency master, you can begin to test out interactive efficiency hacks, which we call the “Efficiency-to-Effectiveness Equation.” If done well, this will result in no loss in service to the client, but if done poorly, it can and will erode value to the customer, so use it carefully and sparingly.

In-Person Interactive Efficiency:

  • If you’re used to 1-on-1 training, you know how much downtime there is between sets. Certainly, half to two-thirds of the entire hour is spent “resting” between sets of work. Consider changing from 1-on-1 personal training at 100% of the price to small group training (4 people at a time) for 50% of the 1-on-1 price. This would both cut the price in half for the client and double your profit margins instantly. A good coach can do this with virtually no reduction in service.
  • Invest in a CrossFit-style wall timer and make rest periods standardized for those clients who like to chat a bit too long between sets.
  • Think about the client footprint and profitability per square foot. A strength client should be able to perform 90-100% of their exercises on a single 8-foot x 8-foot platform, which holds a rack, a bench, a barbell, and weight storage. When this is done, you’d be amazed at how many clients can be trained at the exact same time in a 400-500 square foot garage or basement.
  • Become a more effective communicator, learning when and how to teach in bite-size chunks, and coach in real time using cues.
  • Fire bad clients.

Online Interaction Efficiency:

For nearly seven years at Barbell Logic, we’ve obsessed over coaching efficiency and improving dollars per hour for our coaches with no loss in service to our clients. During this time, we’ve seen our coaches’ dollars per hour grow from ~$50/hour to over $150/hour, and more importantly, during that same time, we’ve seen client churn move from 6% per month down to 3% per month, while increasing prices 26%-40%. Our clients love the fact that they can get high-quality, professional coaching from expert coaches all over the world at a fraction of the cost of personal training. And likewise, our coaches love that they can make three to five times the dollars per hour in online coaching compared to personal training.

The most important factor for increasing dollars per hour is the passive or “built-in” efficiencies for each step of the client’s lifecycle. This efficiency infrastructure should encompass everything from on-ramping new clients to providing daily coaching services to handling communications. For us, the biggest step in our efficiency infrastructure came from developing software designed around providing the best coaching service possible to the client in the most effective manner. This software, combined with systems for excellent customer service, a vast knowledge base, and careful attention to client lifecycles, has led to a product designed to improve dollars per hour, which we call  TurnKey Coach.

TurnKey Coach is available to anyone in the coaching industry and is the best way to start and manage your online coaching business, leaving you free to do what you love: simply coach. TurnKey Coach lets you run a highly profitable online coaching business on your terms. Included in the TKC product & service:

  • All the tools you need to provide personalized coaching from anywhere in the world, on your schedule
  • Maximize your hourly earnings through a fair per-client pricing structure that grows with you
  • TKC business services, which take care of the majority of backend administration, including all billing and payment processing and failed payments recovery
  • A user-friendly coaches’ newsfeed that keeps the workouts that need to be reviewed sorted to help you maximize your time and your clients’ experiences
  • Automated metrics & touch points allow you to connect with your clients, identify trends in your clients’ performance, celebrate milestones, and reduce churn
  • Own your time through simple scheduling with Calendly, included with your account at no additional cost
  • Seamless onramp process for your new clients allowing you to meet their coaching needs right where they are
  • Program and give video technique breakdowns on your client’s exercises
  • Access to an extensive library of nearly 750 exercises, 450 how-to videos, and templates for workouts and nutrition plans, plus the ability to create your own templates and customize your clients’ programming as needed

Visit TurnKey.Coach for More Information

Conclusion

You may notice that most of the advice here does not attempt to separate being a coach from being a business owner. That’s because how you run your business will affect your coaching, and how you coach and communicate will affect your business. Learning to do both of these things seamlessly is one of the most important parts of being satisfied and successful in this business. That’s why Barbell Logic has the Barbell Academy. It has been our mission from Day One to help educate coaches on all aspects of the coaching business. Along with all the great information contained in the Academy courses, we are also offering a webinar this January where some of our most successful coaches will present on different aspects of the Coaching Business.

This webinar is free to new purchasers of the Academy or can be purchased separately as a stand-alone event. For more information, click here.


References

Mayer, Roger C., James H. Davis, and F. David Schoorman. 1995. “An Integrative Model of Organizational Trust.” The Academy of Management Review 20 (3): 709. https://doi.org/10.2307/258792.

Schoorman, F. David, Roger C. Mayer, and James H. Davis. 2007. “An Integrative Model of Organizational Trust: Past, Present, and Future.” Academy of Management Review 32 (2): 344–54. https://doi.org/10.5465/amr.2007.24348410.

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