Pricing By Effort

I had an interesting conversation with a fellow tutor with regard to pricing. We each have our perspectives, perhaps it’s worth sharing them here.

A bit of background: my tutor friend was thinking about raising her fees to match the inflation. She usually charges around the market rate, or slightly above that.

She felt that she should price her tutoring service in such a way that she charges different rates for different levels. For example, for primary levels, she would charge lower rates than secondary 1 and 2, and secondary 1 and 2 will be lower than secondary 3 and 4.

The rationale for doing so is that it requires less effort from her to teach primary than secondary students. A lower level of effort calls for lower rates, isn’t that reasonable? If a task takes less from you, shouldn’t you be remunerated less for that?

What she believes sounds intuitive and echoes many parents’ beliefs. However, I propose a different perspective:


If we are dedicated educators, we give the same dedication to all students tasked to us. We don’t treat primary level students more lightly than secondary students, or give less to non-exam exam years students. So there is no discrimination is our effort.


If you have been teaching for a while, you’ll agree that some students are indeed more motivated than others. Such students are usually perceived as “very easy to teach”, “only need an occasional intervention”.

Some parents might reason that since their children are so motivated and “easy to teach”, it’s justified for tutors to charge a lower fee for their children. I find that rationale invalid – if given a chance, would these parents be willing to let their children go to a less prestigious school than a well-known one simply because, well, their children don’t really need the extra intervention in learning?

No, I think any parents would cherish such an opportunity to go to the best schools, to learn under the best teachers, if their children are willing. Why? I think it’s because even the best learner can benefit from good teachers. In fact, the better a learner is, the more likely that he or she would appreciate the enlightenment and inspiration from good teachers.

Actually, more often than not, it takes an exceptional teacher to be able to understand an exceptional student. Exceptional teachers are always in demand.


Charging by effort makes sense in selling goods, but not in personal services like private tutoring. When a company sells a commodity, for example, phone casings, and because of its access to a cheaper material, manpower, etc, it can make phone casings at a cheaper price than others. To get more people to buy its phone casings, the company can choose to sell at a cheaper price than its competitors and so sell more and hopefully make more money.

Offering personal services like tutoring is different from making and selling phone cases in two ways. The first is easy to see: the raw material, time and attention, is finite. Nobody has cheaper access to these. Everybody has the same 24 hours and roughly the same amount of mental energy, no matter if you are a CEO or a homemaker.

The second point is not so obvious: we specialize in things that we do more effortlessly compared to other people. For example, if Mary and Jane both teach secondary math, but Mary is more skilled, more experienced, and more talented than Jane., it is not hard to imagine that Mary will have an easier time teaching than Jane, yet do it better.

So, Mary uses less effort than Jane but produces better outcomes. Should Mary then be asked to charge a lower rate than Jane, because less effort is required from her? It sounds insane when we put it this way, but that is exactly what we put ourselves through when we charge lower rates because it is “not so hard” to teach certain students.


I hope my perspective makes sense to you. Please feel free to share yours pertaining to pricing.


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