Etinosa Agbonlahor on the Behavioral Economics of Pricing: Why Service Providers Underprice, How Money Scripts Control Your Fees, and the Psychology Behind Premium Pricing That Converts (The Price and Value Journey, Episode 157)
Service providers avoid pricing conversations for the same psychological reasons consumers avoid checking their bank balances. Etinosa Agbonlahor spent a decade as Director of Behavioral Research at Fidelity Investments studying financial avoidance, and now she applies those insights to help consultants, coaches, and professional service providers fix their pricing.
In this conversation with host John Ray, Etinosa reveals the three main reasons service providers underprice: lack of confidence in their value, the dangerous habit of anchoring to competitor pricing, and the fear that clients are scrutinizing every price change. She shares research showing that customers can’t even remember what they paid for items they just bought, yet service providers operate as if clients are tracking every dollar. Etinosa explains how premium pricing can actually attract better clients, why doing nothing with your pricing has real costs, and how to use pricing as a steering wheel rather than just a revenue engine. She also provides practical first steps for service providers stuck in the knowledge-action gap around pricing.
The Price and Value Journey is presented by John Ray and produced by North Fulton Business Radio, LLC, an affiliate of the Business RadioX® podcast network.
Key Takeaways You Can Use from This Episode
- Your confidence level shows up directly in your pricing as a business owner, whether you want it to or not.
- Copying competitor pricing is dangerous because you don’t know if your competitors are leaving money on the table, if their pricing is right, or if they deliver the same value you do.
- Most customers aren’t as price-sensitive as you fear. Research shows more than half of shoppers couldn’t remember the cost of items they had just put in their cart.
- Premium pricing can attract better clients who associate higher prices with higher quality. Some prospects won’t work with you because low prices signal you won’t deliver the value they need.
- The cost of pricing inertia compounds over years. Doing nothing costs you clients who thought your prices were too low, growth opportunities, higher margins, and time you could have taken off.
- Use pricing as a steering wheel, not just a revenue engine. Design your prices to influence how customers choose, what packages you offer, and how you position yourself against competition.
- Talk to your customers about what they value in working with you, including the softer things like responsiveness and friendliness, then crystallize those value conversations into pricing decisions.
Topics Discussed in this Episode
00:00 Introduction and Guest Introduction
01:29 Understanding Behavioral Economics
02:47 Psychology of Pricing
04:24 Common Pricing Mistakes
10:21 Money Scripts and Their Impact
18:54 Unlearning Money Scripts
20:59 Scarcity Mindset and Environmental Influence
23:43 Self-Reflection for Business Growth
24:17 Understanding Regret Aversion in Pricing
26:04 The Ostrich Effect and Business Margins
28:29 Positive Reinforcement vs. Shame in Pricing
30:43 The Psychology of Discounted Pricing
34:10 Behavioral Pricing Tactics
36:39 The Journey of Pricing Strategy
38:14 Bridging the Knowledge-Action Gap
42:11 Counterintuitive Insights in Behavioral Economics
44:13 Final Thoughts and Contact Information
Etinosa Agbonlahor
Etinosa Agbonlahor is a behavioral economist and CEO of Decision Alpha, a behavioral pricing firm that helps businesses improve pricing for growth, traction, and stronger perceived value.
Passionate about helping people live healthier financial lives, she brings over a decade of experience working across the U.S., Australia, Africa, and the U.K.—shaping pricing, engagement, and customer behavior strategy for global financial institutions and venture-backed startups.
MarketWatch, Morningstar, and other leading platforms have featured her work, highlighting her focus on how behavior drives financial outcomes.
Etinosa is the author of How to Talk to Your Parents About Money, a guide to navigating complex financial conversations.
John Ray, Host of The Price and Value Journey
John Ray is the host of The Price and Value Journey.
John owns Ray Business Advisors, a business advisory practice. John’s services include business coaching and advisory work, as well as advising solopreneurs and small professional services firms on their pricing. John is passionate about the power of pricing for business owners, as changing pricing is the fastest way to change the profitability of a business. His clients are professionals who are selling their expertise, such as attorneys, CPAs, accountants and bookkeepers, consultants, coaches, marketing professionals, and other professional services practitioners.
John is a podcast show host and the owner of North Fulton Business Radio, LLC, an affiliate of Business RadioX®. John and his team work with B2B professionals to create and conduct their podcast using The Generosity Mindset® Method: building and deepening relationships in a non-salesy way that translates into revenue for their business.
John is also the host of North Fulton Business Radio. With over 900 shows and having featured over 1,300 guests, North Fulton Business Radio is the longest-running podcast in the North Fulton area, covering business in its region like no one else.
John’s book, The Generosity Mindset: A Journey to Business Success by Raising Your Confidence, Value, and Prices
John Ray is the author of the five-star rated book The Generosity Mindset: A Journey to Business Success by Raising Your Confidence, Value, and Prices, praised by readers for its practical insights on raising confidence, value, and prices.
If you are a professional services provider, your goal is to do transformative work for clients you love working with and get paid commensurate with the value you deliver to them. While negative mindsets can inhibit your growth, adopting a different mindset, The Generosity Mindset®, can replace those self-limiting beliefs. The Generosity Mindset enables you to diagnose and communicate the value you provide to clients, which allows you to price your services more effectively in order to receive a portion of that value.
Whether you’re a consultant, coach, marketing or branding professional, business advisor, attorney, CPA, or work in virtually any other professional services discipline, your content and technical expertise are not proprietary. What’s unique, though, is your experience and how you synthesize and deliver your knowledge. What’s special is your demeanor or the way you deal with your best-fit clients. What’s invaluable is how you deliver outstanding value by guiding people through massive changes in their personal lives and in their businesses that bring them to a place they never thought possible.
Your combination of these elements is unique in your industry. There lies your value, but it’s not the value you see. It’s the value your best-fit customers see in you.
If pricing your value feels uncomfortable or unfamiliar to you, this book will teach you why putting a price on the value your clients perceive and identify serves both them and you, and you’ll learn the factors involved in getting your price right.
The book is available at all major physical and online book retailers worldwide. Follow this link for further details.
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