Executive coaching can be expensive. According to an article entitled “What Can Coaches Do for You?” published in 2009 in the Harvard Business Review, you can expect to pay between $200 and $500 per hour for executive coaching, with elite coaches charging up to $3,500 per hour. And that was ten years ago!

ROI of Executive Coaching

However, we all recognize the folly of those who know the price of everything and the value of nothing. If that $3,500 price tag were to earn you $7,000, you would be more than satisfied. Well, what if I were to tell you that several studies show the return on investment (ROI) of executive coaching far exceeds 100%?

Here are the numbers:

  • According to Joy McGovern, et al. in the study Maximizing the Impact of Executive Coaching: Behavioral Change, Organizational Outcomes, and Return on Investment, published in The Manchester Review,2001, and available for download here, a conservative estimate of the ROI (for the 43 participants who estimated it) averaged nearly 5.7 times the initial investment in coaching.
  • In another study, Booz Allen Hamilton’s executive development director, Vernita Parker-Wilkins, coaching produced intangible and monetary benefits for seven out of eight business impact areas, and ROI 689 percent.
  • Confirming those results is an Intel study revealing its internal coaching program resulted in an ROI of more than 600 percent.
  • In a study conducted by MetrixGlobal LLC, companies reported an average return of nearly $8 for every $1 invested in executive coaching.
  • And in a global survey of coaching clients by PwC (Price Waterhouse Coopers) and the Association Resource Center, it was reported that the mean ROI for companies investing in coaching was seven times the initial investment, with over a quarter reporting an ROI of 10 to 49 times.

Will My Investment in Executive Coaching Be Worth It?

You can easily calculate your ROI after you receive coaching, pay the bill, and evaluate the results. You simply subtract the cost from the total value gained, divide by the cost, and multiply the result by 100%. For example, if you paid a coach $5,000 for services that resulted in a $30,000 increase in your gross income, your ROI is ($30,000 – $5,000)/$5,000 = 5 x 100% = 500%.

However, when you are deciding whether to hire a coach, you don’t yet have the numbers to crunch to determine whether the coach will be“worth it.” After all, several factors, in addition to cost, contribute to ROI, including the following:  

  • The suitability of the coach to you and the problem you are trying to solve or the opportunity you are pursuing
  • The nature and complexity of the problem or opportunity
  • Your commitment to follow the coach’s guidance
  • The amount of money you are likely to earn or save, assuming the coaching produces the desired outcome

Let’s assume you hire the ideal coach and are committed to following your coach’s guidance. Whether coaching will return the desired ROI now boils down to two questions:

  • How much will it cost?
  • How much will it boost your revenue, lower your expenses, or deliver value in some other way (for example, by solving a relationship issue)?

This is the point at which you need to discuss the coaching arrangement with prospective coaches. Before you do, however, clarify your expectations in your own mind. Ask yourself the following questions:

  • What is the desired outcome?
  • How long do I have to reach the desired outcome?
  • Assuming I achieve the desired outcome, how will I benefit? or If I were to accept the status quo, what would be the cost?
  • What is the desired outcome worth to me, my organization, or my family? For example, how much would I be willing to pay to have a certain problem go away?

Knowing the answers to these questions, you’re much better equipped to engage in productive discussions with coaching prospects to clarify outcomes, milestones, and costs and to ensure that the ROI will meet or exceed your expectations.

Tips for Maximizing Your ROI

To maximize the return on your executive coaching investment, adhere to the following guidelines:

  • Choose the right coach. See my previous post, “Hiring an Executive Coach: 10 Do’s and Don’ts.”
  • Stick with the program. Like most things in life, what you get out of your coaching experience depends heavily on what you put into it.
  • Maintain your focus on one specific outcome at a time.You may have several problems or opportunities but prioritizing and tackling each one in turn usually improves results.
  • Communicate results. Honest feedback can help your coach determine what adjustments, if any, are needed on your path to a successful outcome.

If you have received executive coaching, please post a comment below to share your experience. Was the coaching you received worth it? What was your ROI? Do you have any tips or cautions to share? If so, I am interested to hear from you. Your insight may help others maximize their executive coaching ROI and help me serve my clients better.

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About the Author: Jan Moorad is a former Major League Baseball team partner and a Newport Beach, Calif.-based coach who helps C-Suite executives and their spouses pursue and achieve personal and professional fulfillment.