Capacity-Based Pricing
- Difficulty
- Moderate
- Time to result
- ~weeks to results
- Steps
- 8
- Confidence
- —
Robin Waite's method for setting a price that can actually reach your income goal. Most people build a product, guess an hourly rate from their own value system, and hope. Robin reverses it: start from the revenue target, divide by your price to get the client count, then test that count against the hours you genuinely have. If the maths does not fit your capacity, the price has to rise — not the workload. Finding the price starts with a live exercise Robin calls the Jedi mind trick, where he calls out escalating numbers and watches for the moment your poker face breaks, on the theory that your subconscious knows your worth better than your intellect does. He then de-risks the higher number with a conditional refund guarantee, and validates it by pitching ten to twenty people at a one-in-five to one-in-three expected conversion.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Package the work as a transformation, not hours
Define the outcome, the duration and the process before you ever discuss money. In the roleplay this becomes a six-month transformation programme built on a seven-step method, with a twelve-week intensive period of weekly sessions followed by lighter check-ins. Robin's position is that hourly rate charging is a broken model, so the unit you price is the result, not the time.
Pro tip Count the steps in what you already do for friends for free. That is your method, and naming it makes it sellable.
- 2
Run the price ladder and watch for the break
Have someone call out escalating prices for the whole programme — 200, 500, 800, 1200 — while you say nothing. Robin's claim is that you solve pricing intellectually and get a low number, but your subconscious answers honestly through your face. The number where your poker face breaks is your true current price. In the roleplay, Ali intellectualised at 200 pounds and broke between 800 and 1200.
Pro tip Do this with someone else calling the numbers. You cannot read your own reaction.
- 3
Set the launch price slightly past your comfort zone
Robin deliberately places the go-to-market price just beyond where you are comfortable, because you learn nothing inside the comfort zone. But he is equally clear that pushing far outside it for too long becomes a demotivator. The target is a stretch you can defend, not a fantasy number you cannot say out loud.
Watch out Do not price from your own value system. Robin's point is that saying you are only worth forty pounds an hour makes a purchasing decision on behalf of every future client, and cheap clients are less invested and get worse results.
- 4
Divide the revenue goal by the price to get the client count
Take the income target and divide it by the programme price. A 24,000 pound goal at 1,200 pounds per client is twenty clients a year. This single division converts an abstract, intimidating figure into a countable number of human beings, which is what makes the goal feel doable.
Pro tip Use the modest goal, not the vanity one. Robin starts from what would genuinely change your life, which in the roleplay was 2K a month.
- 5
Stress-test the client count against real capacity
Work out what that client count actually costs you in hours. Twenty concurrent clients on weekly calls is twenty hours a week — impossible alongside a full-time job. Ali concludes he can realistically hold five concurrently, roughly ten across a year with overlap and churn. This is the step that exposes the gap between the plan and the week.
Pro tip Model churn honestly. Clients who get the result leave, which frees a slot but also breaks the neat arithmetic.
Watch out Capacity matters most when you are running this alongside a job. Ignoring it is how people commit to a revenue goal they physically cannot service.
- 6
Close the gap by raising the price, not the hours
With capacity fixed at roughly ten clients, the price has to move to hit the goal. Robin's move is straightforward: if someone can afford 1,200, they can probably afford 2,500 over six months, which is around 500 pounds a month. Ten clients a year is now less than one new client a month.
Pro tip Reframe the total as a monthly figure when you test affordability. 2,500 over six months reads very differently from 2,500 up front.
- 7
De-risk the higher price with a conditional guarantee
Robin removes the jeopardy by asking whether you would happily refund a client who did all the work and got no result. If yes, put it in writing. The contract states the conditions — show up to the calls, do the homework, go on the dates — so the guarantee is conditional on effort, not on outcome alone. This is the same mechanism that lets his third web designer charge ten times the others.
Pro tip Write the conditions into the contract before the first sale, not after the first refund request.
- 8
Validate by pitching ten to twenty of the right people
Robin says that across over seven hundred business owners he has seen conversion for service businesses land somewhere between one in five and one in three. So pitch ten to twenty qualified prospects at the new price and expect two to four yeses. If almost nobody converts, the usual cause is the wrong audience rather than the wrong price.
Pro tip At worst-case one in five, one client a month needs only five consultations a month. That is a very small number of conversations.
Watch out Judge the price against your ideal audience, not your colleagues. When Ali objected that people at work would not pay 1,200 pounds, Robin's answer was that they are not your ideal audience.
In the wild
Ali starts the roleplay assuming he might charge ten pounds an hour, because he feels unqualified to give relationship advice. Robin runs the price ladder, spots the poker face breaking between 800 and 1,200, and lands on 1,200 for a six-month programme. Dividing a 24,000 pound goal by 1,200 gives twenty clients — twenty hours of weekly calls, which Ali cannot service alongside hospital shifts. Capacity caps him at about five concurrent, roughly ten a year. So the price moves to 2,500. Ten clients across a year, less than one a month, hits the goal and lets him drop to three days a week.
→ A goal that felt impossible became ten conversations a year at a price the arithmetic actually supports.
Robin describes a communications consultant who came in without urgency — she had savings, was not desperate for clients, and had one specific dream client in the education space, UCAS. She picked up other work organically while she waited, and it took a year, but she eventually closed a 180,000 pound contract. Robin's framing is that she had previously been selling day rates at 200 to 250 pounds a day. Pricing on outcome rather than time, and being willing to hold out for the right client, changed the entire trajectory of her consultancy.
→ A 200-pound day rate replaced by a single 180,000 pound contract that became the catalyst for bigger clients.
Common mistakes
Pricing from your own value system
Robin's sharpest point on pricing is that when you decide you are only worth forty pounds an hour, you are making a decision on behalf of every client you will ever have. His counter-argument is behavioural: people who pay a lot cherish and act on what they bought, so the more expensive end produces more invested clients who do the work and therefore get better results. Underpricing serves nobody, including the client.
Setting a revenue goal without checking capacity
The division step is meaningless until you convert the client count into hours. Twenty clients on weekly calls is twenty hours a week, which is not compatible with a full-time job. Robin calls capacity a major part of the equation, especially for a side hustle. Skipping this leaves you committed to a number you cannot physically deliver, and the failure then reads as a personal one rather than an arithmetic one.
Building the product first and hoping buyers appear
Robin says people approach it from the wrong end — building the product then hoping people come and buy it. Capacity-based pricing runs from the other end of the spectrum: goal, price, client count, capacity check. The same logic applies to launching, where he favours building an audience before the product is finished so there is somewhere to launch into.
From the transcript
“so what we've done is this this called capacity based pricing right so you work out your your end goal for your business what's what…”
“so when it comes to coaching especially it's much better to be at the more expensive end of it because then what you get is…”
“I know that a good conversion rate for most service businesses like coaching is somewhere around about one in five to one and three let's…”
From the episode
How To Build A Business In 2023 (The Easy Way) - Robin Waite
Robin Waite