Introduction

In recent years, the coaching industry has exploded into a multi-billion dollar sector, with thousands of coaches promising transformative results and a pathway to success.

However, beneath the surface of this booming industry lies a troubling trend: coaches selling to coaches who sell to coaches on how to start a coaching business.

This cycle perpetuates a system that often leaves aspiring coaches disillusioned and financially drained. This article delves into the so-called "Great Coaching Pyramid Scheme," examining how marketing tactics are masquerading as business coaching and the consequences of this phenomenon on the industry and its participants.

The Mirage of Marketing Tactics

Many coaches entering the industry are drawn in by the allure of high-ticket programs promising quick success and financial freedom. However, what they often encounter are marketing tactics disguised as business coaching. These tactics include:

• Marketing hype: Grandiose promises of instant success and wealth.
• Blueprints for leads: Strategies primarily focused on buying leads through platforms like Facebook ads.
• Energetics and the "flow": Emphasis on mindset and energetics over actionable business strategies.
• The dream: Selling the vision of an ideal lifestyle that the coaches themselves might not even be living.

This approach results in many individuals investing significant sums of money only to find themselves back at square one without the promised outcomes or a sustainable business model.

The Vicious Cycle of Coaches Selling to Coaches

The crux of the issue lies in the fact that many coaches have never run a successful business outside of coaching. They sell marketing hype and dreams, not grounded, actionable business strategies. This creates a cycle where:

• New coaches are sold the idea that they can quickly transition into successful coaching careers.
• They, in turn, sell similar promises to other aspiring coaches.
• The cycle continues, creating a network of individuals selling coaching services to each other rather than building businesses that offer tangible value to clients outside the coaching bubble.

Very few coaches are set up for acquisition because they have little infrastructure, and the premise of their promise is wrapped in Zoom conversations.

Data and Facts: A Closer Look

To understand the depth of this issue, let's examine some data:

• Market Size: The global coaching industry is valued at over $15 billion and is expected to grow.
• Income Disparity: Despite the industry's size, studies indicate that approximately 90% of coaches earn less than $100,000 per year.
• High Failure Rates: A significant number of new coaches do not see a return on their investment, with many abandoning the profession within the first few years.

This data highlights a stark reality: while the industry itself is lucrative, the wealth is concentrated among a small percentage of coaches. The majority struggle to make a sustainable income.

The DIY Mindset: Hobby vs. Business

One of the pervasive issues in the coaching industry is the DIY mindset. Many coaches approach their practice as a hobby rather than a business. This mindset is characterized by:

• Lack of Business Foundations: Focusing solely on marketing while neglecting other critical business functions such as sales, operations, finance, and human resources.
• Short-term Tactics: Emphasizing quick wins and short-term strategies over long-term, sustainable growth.
• Chasing Trends: Continuously seeking out the latest marketing fads rather than building solid, proven business systems.
• Hustle culture: Spending time doing more of what does not work. This is very dangerous and yet it has been normalised.

To build a successful coaching business, it is essential to move beyond the DIY mindset and adopt a holistic approach that incorporates all aspects of business management.

Sales and Marketing: The Effect, Not the Cause

Most coaches get it wrong by focusing on sales and marketing tactics first and wondering why they cannot sell their services. Sales and marketing should be the effect of a robust and strategic business foundation. The essential elements include:

• Clear Articulation of Services: Understanding and being able to communicate what you do and the value you provide.
• Knowing Your Avatars: Identifying and deeply understanding your target audience and their needs.
• Product Suite Development: Creating a range of products or services that cater to different stages of your client’s journey.
• Tech Stack: Implementing the right technology tools to streamline operations and enhance client experience.

Without these foundational elements, it is impossible to create a strategic content and marketing plan that drives consistent revenue. Coaches need to focus on building these blocks first before diving into marketing tactics.

Coaching Is More Than Sales Funnels and Instagram Posts

The essence of true coaching goes far beyond flashy sales funnels and curated Instagram posts. While these elements are a part of a broader marketing strategy, they do not constitute the core of effective coaching. True coaching requires:

• Frameworks and Models: Robust, well-researched frameworks and models that provide a structured approach to achieving client goals.
• Delivering Outcomes: A commitment to delivering tangible outcomes, results, and transformation for clients.
• Living by Values: Coaches must embody the values they promote, ensuring authenticity and integrity in their practice.
• Purpose and Mission: A clear understanding of their purpose and mission, which drives their actions and decisions in the coaching process.
• Lived Experience, NOT Certifications:?Another misconception is certifications. In my experience, working with hundreds of business owners, experience and understanding of your area of specialisation is far superior to a certification that has not been tried and tested on clients. Certifications add value to experience.

Coaching is an art and a science. It involves understanding human behavior, developing personalized strategies, and providing the support and accountability clients need to achieve their desired transformations. Without these foundational elements, coaching risks becoming just another marketing ploy.

The Missing Pieces: Outcomes, Results, and Transformation

Many coaches fail to deliver on their promises because they lack a clear understanding of the complex problems they are supposed to solve. They push marketing tactics but rarely provide tangible outcomes, results, and transformation. Key issues include:

• Undefined Solutions: Many coaches do not offer a clear solution, making it difficult for clients to see the value in their services.
• Inability to Articulate Problems: Without a deep understanding of the problems they aim to solve, coaches struggle to communicate their value proposition effectively.
• Chasing Tactics: Focusing on superficial marketing strategies rather than developing robust solutions that address client needs.

To be effective, coaches must move beyond surface-level tactics and develop a deep understanding of their clients' challenges, offering real, actionable solutions.

Building a Real Business: The CEO Mindset

To break free from the coaching pyramid scheme, coaches must start running their businesses like CEOs. This involves:

• Comprehensive Business Functions: Incorporating sales, marketing, operations, and finance into their business model.
• Long-term Strategy: Developing long-term strategies for sustainable growth rather than chasing short-term wins.
• Professionalism: Treating coaching as a profession with standards, ethics, and a commitment to delivering real value.

Adopting the CEO mindset transforms a coaching practice from a hobby into a legitimate business that can withstand market fluctuations and deliver consistent results.

Challenging the Status Quo

Critical thinking and the willingness to challenge the status quo are essential for success in the coaching industry. Coaches must ask themselves tough questions:

• "Is this right?": Constantly evaluating the integrity and effectiveness of their methods.
• Trusting Instincts: If something doesn't feel right, it likely isn't. Coaches should not be afraid to question and innovate.

By challenging existing norms and practices, coaches can differentiate themselves and build businesses based on integrity and real value.

Investing in Well-being: The Foundation of Success

Another crucial aspect often overlooked is the coach's well-being. A coach's mental, emotional, and physical health significantly impacts their business. Key points include:

• Balanced Approach: Investing time and effort in balancing mind, body, and soul.
• Reactivity: Recognizing that a constantly reactive state indicates the need for personal well-being investment.
• Personal Accountability: Taking responsibility for one's state of being and its impact on business decisions.

A well-rounded approach to well-being not only enhances personal life but also translates into a more effective and resilient business.

Conclusion: Time to Get Serious

The coaching industry is at a crossroads. To move forward, coaches must move beyond marketing hype and develop real businesses with solid foundations. This involves:

• Critical Evaluation: Assessing and challenging current practices and ideologies.
• Holistic Business Approach: Incorporating all business functions into their practice.
• Commitment to Well-being: Investing in personal well-being to enhance business effectiveness.

By doing so, coaches can break free from the pyramid scheme mentality and build sustainable, impactful businesses that deliver real value to their clients. It's time to get serious about coaching and transform it from a marketing-driven industry into a profession based on integrity, results, and genuine transformation.

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References

• International Coaching Federation (ICF). (2021). Global Coaching Study. Retrieved from ICF website.
• Smith, R. (2020). The Dark Side of the Coaching Industry: A Pyramid Scheme? Forbes. Retrieved from Forbes website.
• Anderson, J. (2022). Why 90% of Coaches Fail and What You Can Do About It. Business Insider. Retrieved from Business Insider website.
• Global Industry Analysts, Inc. (2022). Global Coaching Industry Report. Retrieved from GIA website.