What would you think if I told you that that box of cereal you want to buy will cost you $10? Likely, you would think to yourself, WTF? Erika is crazy! Is that cereal made of gold? Suppose I followed up by saying, “No, actually it is $8.” Then you would think that was better and you might even come close to being satisfied with the $8 price tag. You would be far more convinced by that pricing than if I had started the conversation by saying the cereal costs $8. That’s because of a little psychological phenomenon called the anchoring effect.
As part of our monthly series about how to use psychology to improve your website presence, we’ll delve further into the anchoring effect and figure out how you can make it work for you.
Before we get started, let me show you perhaps the best example I have ever seen of the anchoring effect in action. Take a look at this video of master marketer Steve Jobs disclosing how much the new iPad will cost. Notice that he starts talking about pricing the device at $999 and leaves that price up on the screen for what seems like ages before disclosing the real initial price of $499 to waves of cheers. Had he started out by saying, we’re pricing this at $499 would people have cheered? Maybe, but likely not as loudly. He created excitement about the lower price by “anchoring” the price at $999.
So how can you use anchoring on your website? Here are three ways:
Offer multiple options with the most expensive first: We all know this basic principle of
High prices slashed: Everyone loves a sale. That jacket you tried on last week and loved was
Reducing price of upsells (buy both items and save): What do you first think of when you hear the word ‘upsell?’ Some sleazy, used car salesman trying to sell you something you don’t really want (obviously, you need a paint protection package on a faded Honda Civic), right? But when used well, upselling can actually make your customers happier.
As a small business owner, your survival depends on influencing customers to use the services you offer. There’s no doubt that learning a little about psychological principles like anchoring can help.
Have you seen any standout examples of the anchoring effect at work? Let me know in the comments below.