Return on investment

Return on Investment

from Coaching

Before giving you the algorithm of calculation the investment return from coaching, let me mention that the average benefit from it is usually 600%-1000% in accordance with the Lore International Institute (US). It means that 1 dollar invested in coaching will generate you 6-10 dollars of income.

Worthy, isn’t it?

 

If you like the numbers the way I do and would like to have some more detailed data, let me share the formula developed by the abovementioned Institute on how this return of investment (ROI) is calculated:

 

ROI = ((Benefits – Cost of coaching) / Cost of coaching) x 100

 

The benefits will be the sum of all chosen indicators of impact (monetary values, of course) multiplied by estimated percentage of improvement due to coaching and multiplied by the percentage of confidence in each estimation. Example by the coaching company from the UK, which has developed a special non-standard coaching program for a sales company and charged for it 35 000 GBP (all amounts are in pounds):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Indicator of impact

Estimated annual monetary value of performance improvement

Estimated percentage of improvement due to coaching

Percentage of confidence in this estimation

Value

Introductions of web-based system to report orders

25 000

100%

75%

18 750

Increased ability to set motivating sales targets for team

235 000

50%

75%

88 125

Reduced meeting time

30 000

80%

60%

14 400

Introduction of a new incentive system

180 000

100%

80%

144 000

 

TOTAL (benefits)




 

265 275

ROI = (265 275 – 35 000) / 35 000 x 100 = 658% - IMPRESSIVE!

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