Tuesday, November 17, 2009

Market Segmentation of Coaching in Germany for Newcomers

When you decide to enter into the coaching business in Germany, please read the article "Grau grau ist der Coachingmarkt" by Cordula Ehms. Obviously, the reputation of the title coach is not as good as it should be.

If you would like to know the market trend in Germany, here is an article: “Markt und Trends im Coaching: Der Coaching-Markt professionalisiert" by Klemens Lange.

From both articles above and from the answers to the question I posted on the news group Coaching at XING my conclusion is that only a small percentage (<10) of Coaches do earn their income from coaching alone. The majority are doing something else, for example training, consulting, therapy etc.

There are also uncountable coaching approaches in the market. A systematic frame concept with a three dimensional “magic” cube is provided in “Rahmenkonzept für den Überblick über Coaching-Ansätze und Coaching-Ausbildung” by Harald Geißler.

The market requires more and more coaches with special competences other than pure process coaching. Therefore, in case you want to enter into the coaching business, be prepared that you offer other services for a special area in addition to your coaching offers. And it will help you to market your coaching services.

How is the market segmented? And here is my trial which is not based on any scientific research. I would segment the market for the coaching newcomers in four segments:

1) The high end
The clients are successful entrepreneurs, doctors, artists, top politician, top managers (CEO). They are looking for coaches with long coaching reputation, spiritual maturity and competencies in some special areas. The honorary paid can be expected between 500 to 1300 € per hour. The clients are usually self payers. exMarketing strategy here is, long enough in the coaching business, publication of books, to be invited for speeches for important conferences. So be patient and work hard and long enough if you want to enter this market.

2) The mass market
Here is the lion share of the market. The clients are usually large, multi-national companies. They are looking for coaching company with a large pool of coaches, so the decision maker, usually personal developers, will have easy time to select the right coaches for their needs. The honorary for the coaching company would range from 200 to 300 €. The clients are company payers. Your marketing strategy as newcomer is to cooperate with those well-established coaching company. Certainly the coaching company will charge their fees.

3) The new market
The new market is coming from the small and medium size business. The decision makers are usually the company owner. They are looking for competent coaches with low prices between 100 to 150 €. The clients are usually company payers. Also, the clients are more and more willing to the online coaching services. Your marketing strategy here is the reference. Talk to your friends if they can recommend you to any one who might need coaching. Do a nice web site, write a blog, do volunteer job for online networking groups. Join reference groups among your coaching colleagues. Write news articles. Answer to online questions.

4) The low end
These are the self payers. These people are more open-minded for online coaching through emaile, telephone coaching, skype coaching. They are willing to pay a coaching services between 30 to 100 € depending on the topics. The clients are self payers. The key marketing strategy here is web site, newsletters, blogs. Internet marketing is a topic itself and I am still need to figure out how to do it. But if you understand it, the potential is unlimited, because you are not bound to the locations where you live and work. And this is an efficient way to reach people international.

Acknowledgements: I got lot of advices and insights from members of the news group coaching from XING. Thanks to all the experts.

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