Enabling Dojo Tutor’s tutors to set their own prices and take control of their businesses.

The stakes

Dojo Tutor set every price and pay rate centrally for all subjects, grades, and students. This constrained supply as many tutors saw our fixed pricing as too low, especially for higher grades and upmarket topics such as standardized test prep. This also prevented tutors in lower cost-of-living regions from offering less expensive classes and compete on price.

Pricing touched tutors’ livelihoods and families’ budgets, so the entire flow had to build trust with tutors and show them that changes to pricing would ultimately be a win-win for them and families.

Tutors feared a race to the bottom

I ran surveys and user interviews and discovered that most tutors wanted to set their own prices, but many worried about a “race to the bottom” as tutors competed on price.

Tutors also feared that families would not understand why different tutors would charge different prices and pick tutors completely based on price.

Establishing a fee structure

Along with product, finance and operations counterparts I explored different variables for tutor-set pricing:

• Adjusting take rate. Exploring different fee amounts for charging tutors.
• Loyalty incentives. Rewarding tutors for retaining subscribers by increasing their take rate after a set number of classes with a family.
• Giving tutors control over discounts. Discounts were previously set at the platform level. Tutors could now decide whether to accept the tradeoffs of offering discounts.
• The rollout. Deciding whether to make the release opt-in or opt-out as well as permanent vs reversible.

Given the potential impact on margin and overall revenue, this project had high visibility with leadership. My product and ops counterparts and I walked leadership through different combinations of options until we reached a consensus.

We landed on opt-in, tutor-set pricing with guardrails: marketplace fees calculated to increase tutor take-home pay, recommended ranges based on market data, and tools that help tutors communicate their value instead of competing as an undifferentiated listing.

What we shipped

I designed and built much of the frontend for tutor pricing, including the first-time experience, setting rates, adding discounts, and surfacing market data so tutors can price competitively.

Results

Despite widespread apprehension from our tutor community, over 70% of tutors opted into the new pricing model within the first 3 months of release.

The majority of tutors accepted platform recommendations and we saw an expected spread of tutors offering both higher and lower prices.

Only a handful of tutors have asked to revert to the previous pricing model and fee structure, and tutor sentiment in our community forum and survey results have been overwhelmingly positive.

What I’d do differently

Show external stakeholders the different pricing options in end-to-end prototypes that showed the impact to both tutors and families. The different pricing options were too abstract to understand the impact on end users.