The Price Experiment
- Difficulty
- Easy
- Time to result
- ~weeks to results
- Steps
- 7
- Confidence
- —
Mark Tilbury argues that most self-employed people and small operators systematically undercharge, and that the fix is to treat price as an experiment rather than a fixed truth. You raise the number, watch what happens, and push until you meet real resistance — knowing you can always drop back. The arithmetic is the persuasion: double your rate, lose a quarter of your customers, and you earn more while working fewer hours. Underneath it sits a shift from cost-based to value-based pricing — you charge for the years of skill that made the five-minute fix possible, not for the five minutes. He is blunt about the consequence of getting it wrong: he watched a mechanic he liked go out of business in four or five years purely because the man would not charge what he was worth.
Origin
Extracted from Deep Dive with Ali Abdaal
How to run it
- 1
Price on the value delivered, not the hours spent
Work out what the outcome is worth to the customer, not what the task cost you in time. The engineer who swaps one component in five minutes is charging for the years it took to know which component.
Pro tip Ask what the result is worth to their business or their week, then price against that.
- 2
Set a minimum billing unit
Mark's rule from his repair days: always charge to the hour. If a job takes half an hour, your minimum is still an hour. This stops your smallest jobs from being loss-makers.
- 3
Check whether you are fully booked
Being booked out is the clearest signal you are underpriced. If demand exceeds your available hours, the market is telling you the number is too low.
Pro tip Track how often you turn work away — that rate is your pricing dashboard.
- 4
Raise the price on new customers and watch
Move the rate up an increment and observe the conversion rate. This is an experiment, not a permanent commitment, so run it deliberately rather than agonising over it.
Pro tip Test on new enquiries first so you are not renegotiating with loyal clients while you learn.
- 5
Do the attrition maths before you panic
If doubling the price loses a quarter of the customers, you are earning more money for less time. Model the trade explicitly so the fear of losing anyone does not override the numbers.
- 6
Push until you find the ceiling, then hold
Keep pushing as far as it will go, because you only make that profit once from each customer. When resistance is genuine, stop — and if you have overshot, you can always return to the previous price.
Watch out There is a floor below which the work is not worth doing at all. If you cannot clear it, change the business model rather than shaving your margin further.
- 7
Deliver more value, never less
Raising price obliges you to keep the value at or above what customers expect. Mark is emphatic that you should never rip anyone off — the price rise has to be matched by real worth.
In the wild
Mark raced full-size cars and used a mechanic who did most of the work on the car. He would hand back the car and quote £75 when Mark was braced for a £200 bill. Mark would insist on paying £120 instead. After roughly four or five years in business, the mechanic closed. Mark says he knew exactly why, and had told the man in advance: he was not charging enough and was too afraid to try.
→ A skilled operator with willing, price-insensitive customers went out of business purely on pricing.
Ali's singing teacher, Josh, has performed in Broadway musicals and done television work, yet was charging around £30 an hour and his business was not particularly profitable. When challenged, Josh said he did not feel right charging £35 or £40 — even though clients were plainly willing to pay. Mark's read is that he does not value his own skill, and that the fix is simply to run the experiment: raise it, and if it fails, come back to where you were.
→ A world-class practitioner stuck at a hobbyist rate because of a self-worth belief, not market resistance.
An engineer is called to a large company whose computer is down. He looks around, removes one component, fits a new one, and the machine comes back to life. He invoices £20,000. Told he was only there five minutes, he answers that it took him years to know which component to remove — and offers to put the old one back. They pay. Ali adds the other half: if that machine earns them a fortune a minute, those five minutes were worth vastly more than the invoice.
→ The price is set by the value released and the expertise embedded, not the time on site.
Common mistakes
Charging for time instead of outcome
Pricing off how long a job took ignores the years of learning that made it quick and the value it unlocks for the client. A half-hour tweak that adds hundreds of thousands in sales should not be billed at a half-hour rate.
Assuming a price rise loses everyone
The fear is that raising rates empties the diary. In practice you lose a slice and earn more from fewer hours — and the price rise is reversible, which almost nobody factors in before deciding not to try.
Protecting margin by degrading the product
The alternative to charging more is quietly delivering less, which destroys repeat business faster than any price rise. If the margin does not work, change the model, not the quality.
From the transcript
“let's say you doubled the amount you charged and you lost a quarter of the people, you're earning more money and you're working less time”
“I told him why he was going to go out of business and he wasn't charging enough.”
“trying to charge a little more is an experiment in business, isn't it?”
From the episode
A Millionaires Masterclass In Business, Side-Hustles and Passive Income - Mark Tilbury
Mark Tilbury