Behavioral Pricing For Accounting Firm Owners With Etinosa Agbonlahor

The Abundant Accountant: Leads, Sales & Business Growth for Accounting, Tax and Bookkeeping Professionals

This podcast episode explores behavioral pricing strategies for accounting, tax, and bookkeeping professionals, featuring guest Etinosa Agbo

Key takeaways

• Clients make financial decisions based on psychology, not pure rationality—contextual value matters more than absolute price.
• Reference points shape perceived value; positioning your pricing relative to competitors or alternatives influences buying behavior.

Main topics

• Behavioral economics in pricing strategy
• Reference points and anchoring effects

Notable quotes

People make decisions relative to a reference point—value is contextual.

Anchoring influences choices even when the number is random.

Conclusion

Accounting firm owners can confidently raise prices by leveraging behavioral pricing principles. By

Transcript preview

Speaker 1 (0:09) Welcome to the Abundant Accountant Podcast, the show for firm owners who are done working too hard for too little. If you're a tax, bookkeeping, fractional CFO, or accounting firm owner, and you are ready to stop discounting, setting boundaries that actually stick, and start enrolling premium clients with confidence, you're in the right place. We cover topics that help you create consistent cash flow in your firm, Have the freedom that you've always dreamt of and have the firm growth without the burnout or long hours. Let's turn your firm into an abundant one. Speaker 1 (0:49) Welcome to the Abundant Accountant Podcast. Today, we have a very special guest. Our special guest is a behavioral economist and the CEO of Decision Alpha, which is a behavioral pricing firm that helps businesses improve pricing for growth, traction, and having a stronger perceived value. She is also passionate about helping people live healthier financial lives and brings over a decade of experience working across the US, Australia, Africa, and the UK. But before we welcome our special guest to the show, if you are a solo firm owner or maybe have a small firm with a small team and think, I'm too small to charge premium rates, think again. Premium pricing isn't about size. It's about positioning, confidence, having clarity in your sales conversations, using a repeatable sales process that works. Even if you hate selling or freeze up when someone asks, what do you charge? It's okay. There is a plan and you can break free from imposter syndrome and actually build the kind of firm that works for you, not the other way around. So if you'd like to explore what that looks like, go to theabundantcall.com and book your strategy call with myself or my team now. We'll walk you through exactly how to grow your revenue without having to get more clients, but having massive clarity and massive confidence. And now let's welcome our very special guest, Etinosa, to the show. Welcome to the show. Speaker 2 (2:23) Thank you so much. I'm excited for our conversation, Michelle. Speaker 1 (2:27) Yes, I am super excited to have you here, Etinosa, and just really diving into behavioral pricing challenges that many firm owners have. But before we dive in, I'd love it if you could share just a little bit about you. I already had your bio, but I always think it's a lot different and more unique coming straight from you. So I'd love it if you could share just a little bit about you, quick 30 seconds to a minute, and then we'll dive into our conversation because this is a hot topic. Speaker 2 (3:00) Absolutely. My name is Atiyah Sagwan-Lahore. I am the CEO of Decision Alpha, and at Decision Alpha, we help business owners with how to price, how to package, and how to communicate their value to clients so they can build more profitable. We do all of this using the power of behavioral economics, which really focuses on understanding how do people make financial decisions and how can you use that to structure the decision you put in front of your clients. So that's kind of what we do at Decision Alpha. I am a behavioral economist trained as one. I've worked with big organizations like Fidelity Investments, the Commonwealth Bank of Australia. I have a deep kind of finance background and I bring all of that to Decision Alpha. Speaker 1 (3:43) Awesome. Super excited to have this conversation because I think for any tax accounting, fractional CFO, bookkeeping firm owner, the understanding of how people make financial decisions is probably the one of the most challenging things for a firm owner to wrap their head around. I think many people think that people just buy based on price, and that's why this industry, I believe, we need to eradicate this epidemic of the under-earning and overworking disease that many firm owners, I believe, have. And the reason why is that everyone just has these price conversations where here at the Abundant Accountant, we talk a lot about relationship-based selling and value pricing and doing things based on what you want, not what the people around you want or are doing, right? So what would you say is, you know, how do people make? financial decisions like from all of your knowledge and your experience and you know being a behavioral economist I'd love it if you could just share what you see on how people make these decisions and what you see the biggest challenge in this industry specifically is Speaker 2 (5:07) absolutely so people make financial decisions not as you said not rationally but we bring our psychology into it right so What that means is we make decisions, for example, relative to a reference point. So if you landed a client who pays you $50,000, you're excited, you think that's a good number until you find out that everybody else like you landed clients who pay them $100,000, right? Yep. Number, but now it looks different because of what you compared it to. The number itself then was meaningless until you compared it to get and to give it value. So value is contextual. That's the first one. We use reference points to help us understand things. What is this like? If I wasn't using Michelle's service, who else would I be using? What do I compare her services to to help me understand if it's valuable to me or not? That's the first one. We're reference dependent. The second one, and this is really interesting, as business owners, is that people also will anchor. right so anchoring is when you look at a random number out there in the environment and it influences what you then do down the line so you see charities use this a lot where you can donate anything you want right but they always have a suggested donation and what is the donation doing it's serving as an anchor because you would have given a dollar but now that you see the suggested donation is 10 you're like all right fine here's 15 i want to feel like a good person right Speaker 1 (6:35) right Speaker 2 (6:36) So Speaker 1 (6:37) we Speaker 2 (6:37) are reference dependent. We use anchors and this can influence our decisions even when they really shouldn't. They're just random numbers in the environment. The other one is that people tend to be loss averse, right? So we would rather... We feel the losses, especially when we're not domain experts, meaning that we haven't bought the service 300 times. We're not familiar with the context. We don't, you know, we're not making these kind of decisions every single day. When we are beginners to a context, we tend to feel the losses or we would rather. We feel losses twice as deeply as we do gains. And so what that means is if I lost $100, I feel it twice as much. It's like I lost $200 compared to if I gained $100. And so all of this for business owners means that when you are thinking through your pricing, you're not just putting a number in front of people. You're putting a decision in front of them. And whenever you put a decision in front of somebody, you become what we call a choice architect. Right. You're now you have the freedom and the ability to structure how you put that decision in front of them, knowing that it's going to inform and influence what they choose. Right. So remember, people are reference dependent. OK, how what number do I put in front of people and how do I structure that so that they can make so that I can inform what they're going to compare my price to? If I only put one number in front of that, they might go compare me to other competitors. What if I put two prices in front of them? Maybe they compare each price between themselves and now they're choosing how to work with me, not if they want to work with me. Do you see what I'm saying? Speaker 1 (8:13) Yeah. And I want to go back. I want to go back, though, because like you said, the people, you know, are more we gravitate towards loss averse. Right. We feel the loss two times more deeply. And I truly believe that that's how people make their buying decisions. in the sales process and things we've talked about here on the Abundant Account Podcast is really focusing on the questions that we ask and keeping it about the problems because people will, I'm going to guess, like you said, if we're loss averse, we're willing to invest more to get out of the losses and the pain twice as much as we are from feeling good about it. Speaker 2 (8:53) Yep. Especially if it's pain that we haven't solved before or we're not familiar with. Right. So if you are a tax rep, for example, people have never been audited before. They don't know how, you know, they don't, they've never been through this process before. And so when you dive deeper into, let's understand the pain, let's quantify the pain, let's understand the urgency around it. What happens if you don't solve it? Yep. Right. Yeah. You're feeling that you're making that deeper. You're helping them understand, OK, this is a big deal and I have to figure it out right now versus, OK, what is it going to look like to solve it? You know, you're leaning more into like the opportunities that might have more limited effect. Again, given that they haven't done this before. Speaker 1 (9:33) Yep. 100%. All aligned with everything that I talk about. And like you said, I think when we tell somebody in here at the Abundant Account, and I like to call it an investment, when we present an investment for somebody to work with us, like you said, we're not just putting a number out there. It's an actual decision that you're putting in front of them. And I've never thought of it from that point of view. And I think that's so... important to remember because you know most firm owners then maybe you can speak to this think that well I'm just going to send a quote or a proposal Speaker 1 (10:13) And I think that's probably one of the dumbest things you could do because you're helping them not make a decision. So if they see your quote, they see your proposal, yeah, I don't like it. I'm just not going to call you. And then most firm owners feel ghosted quite often. You know, how come I never heard back? How come most of the people that I've ever talked to that I've helped, you know, for almost a decade now, they don't close at a high rate. The firm owners are meeting with people, wasting time with people that are not moving forward. They're not moving them through that sales process. And I think it's because, like you said, you're not presenting a decision to them. And when we don't present the decision, there is nothing to do. You're not in a sales process anymore. Right. Because they just saw it as a number. Speaker 2 (11:13) Exactly. And this is I'm a firm believer in bringing and pulling up that decision into the actual conversation where it makes Speaker 1 (11:20) sense. Yeah. Speaker 2 (11:22) So this is something we talk about when we work with people is how do you frame up the choices that you're going to put in front of your customer within the sales script itself? Right. So it's not I'm going to like email your document to me. You make your mind up and then you get back to me. You're never going to hear back from me. Speaker 1 (11:38) No, never. It's like that's like the number one thing I think firm owners do wrong. And I think we're in alignment on that. Right. If you don't bring up the investment in your price discussion, in your sales conversation, you're never going to hear back from people. Or if you are, you're hearing back from only the people, a very small percent, and you're leaving hundreds of thousands of dollars on the table. Speaker 2 (12:02) When business owners come to us sometimes, part of the work that we do with them is teaching them how to incorporate this framing decisions within their sales script so that in a natural way, you're still framing up, here is the value of working with me. Here's how it solves the problems, right? We're selling to pain. Here's how it solves the pain points that you've raised. And this is the investment, right? It's this, this, or the other thing, which one works for you. Speaker 1 (12:29) Yeah, I even take it one step further and I know it goes against the grain with many people and some of my other colleagues in the industry, but I believe that. Speaker 1 (12:42) you know, if you're going to go to a top specialist, let's say Eric Green, right? We both know him. And you're going to get