Unlimited annual coaching licenses can appear appealing — at the surface. A closer look at the data reveals that session-based pricing is better positioned to provide more value and flexibility. In this blog, we dig into (mis)economics of unlimited licenses versus session-based pricing.
Understanding 'Unlimited' Coaching Licenses
Before we dive into the analysis, let’s clarify what we mean by “unlimited” coaching licenses. It’s a bit more complex than it may seem — here are some key considerations:
- Activation timing: When does the license actually start? Is it from the moment the contract is signed, when a project begins, or the first time a user logs in?
- Concurrent activation: Do all licenses activate and expire at the same time, or do they stagger?
- License duration: An ‘annual’ license may not always span a full 12 months — it might last only 10 or 11 months depending on when it activates.
Session-Based Pricing vs. Unlimited Coaching License: A Comparative Analysis
While the unlimited coaching model is widespread, our data indicates that session-based pricing offers distinct advantages:
- Optimal utilization: Session-based pricing ensures close to 100% utilization, while unlimited models often recommend an average of two sessions per month, but real-world usage tends to be closer to 1.5 sessions.
- Flexibility: Imagine having 10 unlimited licenses compared to a block of 120 sessions. The latter allows session allocation per your teams’ needs — every leader may not need the same amount of sessions. A sessions-based model gives you the flexibility to accommodate for that.
Length of session: The time allocated for sessions significantly impacts value. Typically, session-based models offer 60-minute coaching sessions, whereas unlimited models offer 45 minutes — hour-long sessions provide 33.3% more coaching than their shorter counterparts.
A Closer Look at the Economics
Let’s dive into the nitty gritty. The duration of coaching sessions significantly influences the value. Consider the following comparison of executive and senior executive coaching costs:
- Executive Coaching: $300/session (suitable for high potential Individual Contributors, emerging leaders, and Directors)
- Senior Executive Coaching: $600/session (suitable for Senior Director, VP & SVP)
(Note: These levels serve as a guide, organizational hierarchies may vary)
Note: Calculations are based on actual coaching minutes. For tailored models or detailed methodology discussions, please contact Skye.
The question you’re probably asking yourself is: Are leaders in my organizations utilizing 20+ sessions in a year? If your executives are not consistently engaging in a high volume of coaching sessions, you may be overpaying for unlimited licenses. By choosing a session-based approach, you can make sure that every coaching minute is put to good use and that you have the flexibility to allocate and reallocate resources where they are truly needed. It’s not just about saving costs; it’s about making sure your coaching investment aligns perfectly with your organization’s needs.
Beyond Cost: Evaluating Value in Coaching
While cost is a critical factor, the true value of coaching goes beyond the price tag. Here are some additional elements to consider:
- Coach Client Fit: A tailored fit ensures the coach understands the executive’s unique challenges, maximizing the impact of coaching sessions on leadership development.
- Coach Quality: It’s not just about certifications; the coach’s operational and industry experience can lead to more meaningful and effective coaching sessions.
- Organizational Synergy: Compatibility with the coaching provider’s customer service, culture, and platform interface can greatly impact the overall benefit of your coaching program.
Personalized Coaching, Flexible Delivery
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