Tiffany (00:00):
Ooh. Hoo hoo. This is gonna be a good one. This is our first Ask Tiffany episode of the season, and today we are going to be hearing from therapist Rachel. Therapist Rachel asks about coaching versus therapy, why? Rachel wants to know, can coaches command such a higher fee than licensed mental health clinicians? So we are gonna dive into this question. We're gonna bring in some real data. I think it's gonna surprise you, and I'm gonna be talking about how you can actually use this idea that coaches can charge more than therapists to inform how you are running your therapy practice as a licensed mental health clinician. What you need to be doing differently, what's really at stake, and why this idea that perhaps therapists need to go into coaching continues to persist even in the face of what you're about to learn in this episode. Let us hit it. We're not gonna quit it. Wow. I should probably, can we edit that out? Let's edit that out.
Rachel (01:20):
Hey Tiffany, it's Rachel Hulstein-Lowe. And my burning question is, in my experience, and I'm guessing this is shared among other therapists, people are much more comfortable paying a coach, a life coach, an executive coach, even a coach, a tutor for their kid, a much higher rate, hourly rate than they are willing to pay for therapy. That is less true with kids, but for adults, I definitely see a higher comfort level paying for coaching than paying for therapy. And I'm wondering what the psychology is around that, and if there's a way for us as therapists and the, to leverage that psychology. That's my question.
Tiffany (02:09):
Alright, Rachel, you are starting us off right here at the money sessions. I love this question. Thank you for having us just start out by going deep from the get go. So here's how we're gonna tackle this question today. We're gonna start with the facts, then we're gonna take a look at some of the nuances, some of the complexities, and then we're gonna drop into the question under the question. We here at the Lean and Make Bank Academy, we here at Lim, we like to think about what are we actually talking about underneath the surface when we're asking X what's the Y that's underneath? So this is how we're gonna tackle this question today. So let us start with just the facts, ma'am. Let's take a look at what the data says around how much therapists licensed mental health clinicians make as compared to what coaches make.
Tiffany (03:02):
Here's what the data says. The average licensed mental health counselor, the salary for the average licensed mental health counselor, and again, that that takes everyone from social work, marriage and family therapy psychologist, right, is $74,221. So right there out the gate, right off the bat, we see that this fantasy that so many therapists have that coaches make more money and can by default charge more on average, it's actually false. The data shows the research, we have shows that licensed counselors actually make more annually than coaches. So let's start with that. However, to be fair, there is nuance in this. So let's pay attention to some of the nuance. Here is the deal. Oh, there's a little more, right? Globally 53% of coaches make $30,000 annual income from coaching. So we can assume this is not in the data that people are often coaching on the side, they have some other job and they're doing coaching and getting part of their income from there.
Tiffany (04:03):
And the average coach in 2022 saw about 12 clients. So they're seeing about 12 clients making anywhere between 30,050 $2,000 annually. Okay, got it. So even though therapists say, oh, man, I could be charging so much more, or I could be earning so much more if I was a coach, that's not what the data says. Now, like I said, we're gonna go a little bit deeper into this question. Now, when we actually separate out business coaching specifically, that's where we see a difference. Business coaches as compared to general coaches have above average revenue. Secondly, business coaches who coach executives charge higher hourly fees and have a higher annual revenue. And in fact, let me see this here. The overall average fee for one hour coaching session in 2022 was $244 per session. Now, I know a lot of therapists are out there listening saying, whoa, $244 per session is way more than I charge as a licensed therapist in private practice.
Tiffany (05:09):
Now we have to think about this by, we have to take, take the business coaching side of this into account business coaches bring the average way up. So business coaches doing executive coach coaching are charging much more than the average coach. Okay? So pay attention to that Next revenues and fees, this is gonna be like an obvious one, but let's pay attention. Revenues and fees are positively related to the proportion of clients whose coaching is sponsored. Coaching is sponsored. What do we mean? Look, I'm gonna jump in here. Sorry to interrupt, Tiffany, sorry to interrupt, but I wanna let you know that it is time to balance your desire to do good and your desire to make bank in your private practice. We are hosting a live week long event in September for free, where you can come and start understanding how you can raise your fees without hurting your clients in an ethical and clinically appropriate way.
Tiffany (06:09):
Go to the link below this episode and sign up today because therapist with more money, have more power to do good, have more power to make an impact. And look, I'm here advocating for you. I want you to make bank, I want you to have a life of freedom, ease, presence. Of course, you'll be able to show up and do better clinical work, but also just because we want that for you, make sure you go to the link below this episode. Register for how to charge like a six figure therapist live. I will be there each day walking you step by step through the process. And you must bring a friend because nobody wants to do this. Alone. You picking up what I'm putting down? I will see you there. Okay, let's get back to the episode. Coaching is sponsored. What do we mean?
Tiffany (07:03):
Well, if you are an executive working for a big company, often that company pays those executives to go get executive coaching. So those clients are not even necessarily, and not often taking money outta their own pocket to get coaching with a business coach. But instead, the company, the corporation is sponsoring their business coaching. Why? Because businesses want their leaders, their leadership team to be able to be performing at a top level. If anything, it's in the way of that it actually is of value to a corporation or a large business to pay for their leadership team, their executive level to go get coaching. Hence, business coaches can charge a lot more than what they might charge an individual who's not being sponsored by their corporation. Okay, one more thing I'm gonna add on average, by the way, all of this comes from the International Coaching Federation.
Tiffany (07:53):
It's the largest most credentialed governing board. They, they credential people to become coaches, licensed coaches under the ICF. This is where this data comes from. We'll include links in our show notes. Here's a couple more data points. The proportion of clients who are sponsored, that means their, their co company is paying for them to get coaching tends to be higher. I'm gonna take Tiffany, scratch that out. So a couple more things. Business coaches who have more experience tend to be more likely to be doing executive coaching. So executive coaches who have been in the industry for a while are gonna be making more money. So how do we think about this when compare it comparing to what therapists charge? It's actually not about the title. I'm a business coach. I'm an executive coach versus I'm a licensed marriage and family therapist. That's not what's at stake.
Tiffany (08:44):
What we're talking about is the niche. We like to call it your muse, right? Who's your muse? Who do you work with in your private practice? If you're a business coach whose muse, whose niche are high paid executives whose companies are sponsoring them, that's actually what's determining the fee. It's not the coaching per se that's bringing in the $350 fee. It's the who they're working with. So you can be a therapist, and we have therapists like this who we work with, who specialize in working with high level executives who are have A DHD and their fathers, their parents. If you're a therapist who's specializing in that realm, it's highly likely that that person has access to financial resources. In fact, we know they do because they're working as an executive in a high paying company, and they also likely have PPO insurance. That means that the insurance will reimburse that client a high level of money out of out of pocket.
Tiffany (09:40):
So that client may be that therapist may be charging 3 25. That client at the end of the day may be paying $80 per session, right? So it's actually not about whether you you're coaching or providing therapy, it's about who you're choosing to work with. Many therapists, we'll get into this in other episodes, choose to work with folks who maybe actually can't afford a higher fee. They can't afford to pay that, that therapist more. That's not about therapy versus coaching, right? That's about who are you choosing to work with and what can they pay. That's the first part of this. So we have the facts. The facts are therapists on average make more than coaches on average annually. Now, to be fair, a therapist who's making 72,000 might be working 40 hours per week at an agency, and a coach who's making 53,000 might be seeing 12 clients a week.
Tiffany (10:32):
They're not working at a, at a agency. So there's probably a big difference in the amount of time a coach versus a therapist is working to make that money. However, if we're talking about a therapist in private practice, a therapist in private practice can see 12 to 15 clients be charging premium fees, cash pay, and be making well over 53 or 72,000 a year. You could be making well into the six figures, 150,000, 200,000 annually. It depends on who you're working with, number one. So facts, salary, they're not, there's not a big discrepancy. Secondly, even within coaching, a lot of coaches are actually struggling financially too. It's the ones who specialize in working with high paid executives doing executive coaching and often getting that supplemented by their company. Those are the coaches that are making a lot of money and, and, and bringing the average up.
Tiffany (11:22):
Those are who are thinking about when therapists say, oh, man, maybe I should become a coach. They're making a lot more money. It's not about coaching, it's about the niche. That's number two. Now, let's go into the question under the question. Let's think about this more broadly because this is something in many therapist's minds. I can't make it as a therapist. I should go into coaching because coaches can charge more people. People the general public are more likely to pay a coach higher fees than a therapist. What's happening here? We can't deny the reality that there is a stigma often too, pursuing mental health care or going to see a licensed therapist. Why? Because folks have the idea in their mind that one must be mentally sick to go see a therapist and get better. The idea of coaching, it might feel better to many folks, especially in America, but I think all around the world it feels easier to say, I'm doing great.
Tiffany (12:19):
Everything is fine. I just wanna do even better. Look, the fact is when people go to coaching, they still have all the same issues, struggles, depression and anxiety. All of the things we know that people who see coaching have, they're just afraid to say it out loud so they can kind of go and be like, I'm well, I I, there's no stigma with like, I'm already great and I wanna get greater. Right? That sounds good. I'm gonna go get to get a coach. Folks who go to therapy, they feel like, oh man, I have to be real sick to go to therapy. I don't wanna admit that to myself or anyone else. So I'm not gonna go to therapy. I'll go find a coach. Right? That's often the, the psychology there. However, let's be real. This is not a problem in a vacuum. This has, this is not something that is without context. Here's the reality, a sad reality, but it has, it makes sense when we think about the factors going into this.
Tiffany (13:15):
Not only do people in the general public not value the work of therapy as much as they might value or feel safe going to a coach or valuing that work, but the difficult reality we're all about difficult realities here, is that often the therapist is not valuing the work they are doing as a therapist. You as a therapist actually have doubts and insecurities about the value you are providing. That's the real problem here. If you don't understand the transformational work you're doing as a therapist, if you don't know it in your bones, viscerally every time you walk into that office to do work with your clients, then you're certainly not gonna be able to communicate that to your clients much less, more broadly in your marketing. And when you're out there talking about the work you do as a therapist, I cannot tell you how many folks I've talked to who are not licensed professionals at all.
Tiffany (14:09):
They haven't even gone through the ICF thing. They're just, I'm a coach, I'm a life coach, and they're doing some wackadoodle cult-like behavioral mechanisms that are actually absconding people's ability to think and pushing them into change. That's actually not real change, but more like I'm following my cult leader. Those folks are so confident about the change they're providing. Those folks are, what am I talking about, neurolinguistic programming folks? I don't know. I don't know what I'm talking about. Those practitioners are like, I change lives. You come into a three hour session with me and you're gonna be a different person coming out. You don't need therapy for 20 years when you can come in and have 20 minutes with me for $15 million. I'm gonna change your life forever by hypnotizing you, right? Holy mackerel. There's, I have never seen anyone more confident in their services than folks who have that kind of training, if you wanna call it behind them, versus a therapist.
Tiffany (15:02):
So many licensed therapists who are like, I don't even know if what I'm doing is of value. I can't raise my fees because sometimes I don't even know if I'm, if I'm making any change in people's lives. That's not a problem with a wider culture. That's a problem with our professional culture. Let me tell you a little bit about the origins of that struggle. Therapists have a triple fold. They have the deck stacked against them in three ways. Triple deck. You got a triple deck stacked against you, particularly if you're a woman, if you are a woman, or if you are a minority, first of all, therapists. This was a study done by Ella Lasky. Ella Lasky in the 1980s. She wrote a paper and she found that therapists are more likely than their siblings to have been the helper in their family of origin.
Tiffany (15:50):
They were the mediator, the one who put aside their feelings to make sure everyone else was taken care of. They were the ones who had no needs because their role was to make sure everyone else was taken care of first, right? So it starts with your family of origin. Then, especially if you're a woman or a minority or someone who's a first gen, maybe you come from a working class background, you're the first to go to college or the first to have your own business. You, you are up against a societal structure where the deck is actually stacked against you. We know that women are paid less on the dollar. We know that folks who are from disabled communities or L-G-B-T-Q communities, marginalized groups, are valued less monetarily based on our societal structures. We know that to be true. We also know the people who are younger, born after 1980, are also struggling with this economy.
Tiffany (16:40):
They're actually 50% less likely to earn as much as their parents as folks who were born in the 1940s who had a 95% chance of earning more than their parents. So if you're a younger person, if you are disabled, if you are, if you are a person of color, you are already having a society that's telling you what you do is less valuable. What happens? Then? You go into this profession, which is filled with therapists who are helpers in their family of origin, crushed down by the weight of society. And then we come into a profession that is filled with messages like, I didn't come here to make money. If you're trying to take care of yourself, you're greedy. Oh, if you have a private practice, you're selling out. So then you get stigmatized within your own profession for actually wanting to go out there and not only find your services valuable, but charge for that value you're providing as a professional.
Tiffany (17:33):
You're not just a friend, you're not just a buddy. You're not a caregiver, you're not a parent. You are a trained professional who went to two to seven years of grad school, followed by 3000 hours of li work to get licensed. Passing that test, going out there and then offering your skills. But you have the, the, the message that if you're actually now getting paid for the work that you went to college to do as a professional, then you're a sellout. You're greedy. You're, you're part of the capitalist system that's hurt of the man. Well, of course, then you wonder if what you have to offer is of value. Of course, you look out there and see a coach somebody working with executives who's charging 300 per hour, probably a white man and say, the work I do is not as valuable as that.
Tiffany (18:18):
You're getting it from all ends. So what do we do about that? Well, you didn't know. You didn't know this was happening. So it's not your fault that you struggle to value the work you do as a therapist. It's not your fault that you say, oh man, if I was an executive coach, I, I would actually be able to charge more. People want that more. You can see you've gotten that message from the time you're family of origin. If you have needs, you're bad, right? You have to only serve others. Why does society you shouldn't have needs? If you do have needs, you gotta put 'em aside and just be of service. And even if you're just of service, that's actually not very valuable service. Ah, and then you come into our profession, which reiterates your needs are bad. What you have to offer is not very good.
Tiffany (18:55):
You know, you should just do it for free. It's not your fault you are in this position, but now because you're listening to this podcast right now or watching this on YouTube, now it's your responsibility to do something different. It's your responsibility to find the value in what you're doing, to understand the transformational work you're providing, and to stop colluding with a system that says you are not valuable. What you have to offer is less than any other profession should be able to charge more than you. Your needs, your desires are not valuable in and of themselves, but they're actually only valuable, valuable if you're doing 'em for free and serving, right? If you are in a private practice and charging low fees under earning off giving it away for free, giving it away for very low pay, not actually able to pay your own student loans, you pay for your own retirement.
Tiffany (19:46):
If you're not actually able to go on vacations and do what you need to take care of yourself, you are not only participating in, you are participating in and colluding with a system that says what women, minorities, people of color, folks with disabilities. What we have to offer is less than you are reinforcing that message. You are sending that message to clinicians who are coming up after you. So what is your job? Your job is to do your work, value what you have to offer as a professional and as a human being who is a profession, who is a therapist in your profession, and charge accordingly. If you don't know how to do that, if you don't know what your rates need to be, I encourage you to download our fun with fee calculator. Go to lean in, make bank.com/podcast fee. Tiffany, change that and put in what you need.
Tiffany (20:37):
Download the fun with fee calculator and start writing this wrong. If you wanna make as much as what a coach makes in your fantasy, then you gotta start by doing the work to dismantle your own beliefs about your value. Got it? Go download that fee calculator, get in there, follow this, click to subscribe, follow us on the show. Share this with a friend. Let's change the narrative. If you want therapy to be valuable, if you want the work that we do as professionals to be of value to a wider society, you gotta start with recognizing it's a value for yourself, and that's where it starts. Okay? Okay. Alright. Whatever you're doing, I want you to pause. If you're driving, pull over. If you're chopping a carrot, put that knife away. If you're making sweet love to a woman, well, I mean that's, that's, that's kind of flattering in a weird way.
Tiffany (21:36):
Huh You can go, you can just go ahead and you can keep doing that. But for the rest of you, if you learn even just one thing of value today, please share this episode with even just one therapist who could benefit from the message. Here's how, if you're listening on iTunes, click on the episode and you'll see a small purple circle with three dots. Click on those dots and you're gonna see the option to share at the bottom of the list. Click that, and you can just go ahead and share it on Facebook, or you can even just text it to one therapist who you know needs to hear it. If you're listening on Stitcher, just tap the triangle icon on the upper right corner. It's next to the menu that displays your upcoming playlist. You'll see the option to share the episode you're currently listening to right on Facebook. Look, it's time to get the word out. We gotta spread the message. Thank you so much, and we'll join each other again soon.