Return On Investment
What results do our clients achieve from Executive Coaching and Workshops? We ask our clients to indicate the Benefit Realization they wish to experience through the impact of coaching before we start with them. The desired benefit realizations clients indicate are very wide and varied. They range from increased revenue, cost savings, talent retention through to cultural shifts. However most clients wish to quantify whatever benefit realization they identify as a return on investment (ROI) in some dollar value.
Client ROI: Since the inception of our company in Australia fifteen years ago, ninety six percent of our clients have indicated that they had made their investment back many times over. Over forty percent indicated an ROI of at least (2000%) 20 times the initial investment while a further 53% saw an ROI of (700-1900%) 7 to 19 times their investment. 2% of clients saw a benefit realization in ROI terms of (10,000%) 100 times their investment The median company return for our clients is 1000%+ indicating that typically a company engaging us can expect a return of 10 times their initial investment.
The marginal life of a client of ours is ten years and their ROI over that period is one million dollars on a typical executive coaching initiative with one client meeting fortnightly twenty three times per year.
A number of conclusions and implications from a coaching industry survey conducted by PWC (2009) can be drawn from their study findings. Some of the key conclusions from this study include:
- Clients are generally satisfied with the coaching experience. In addition to awarding very high ratings to all of the coaching criteria tested, the vast majority of clients also indicated that they were very satisfied with their experience.
- Further confirming the success coaches are having is the fact that almost all (96%) clients indicated that they would repeat the coaching experience given the same circumstances that lead them there in the first place.When monetary gains are an expected outcome, coaching generates a very good return on investment (ROI) for clients.
- By design, not all types of coaching lead to monetary gains for the client (or their company). Accordingly, only 40% of respondents indicated that they had seen a financial change (personally or company) as a result of coaching.
- Almost two thirds of those who experienced a personal ROI indicated that they had at least made their investment back. The median personal ROI indicates that those who seek a financial gain can expect a return in the range of 3.44 times their investment.
- The ROI for companies can be significant. The vast majority (86%) of those able to provide figures to calculate company ROI indicated that their company had at least made their investment back.
- The ROI for companies is quite a bit higher with a median return of 7 times the initial investment. In fact, almost one fifth (19%) indicated an ROI of at least 50 (5000%) times the initial investment while a further 28% saw an ROI of 10 to 49 times the investment.
International Coaching Federation White Paper (Price Waterhouse Cooper 2009)