Welcome to the latest installation of our weekly blog series – Psychological Hacks for Marketers. Each week we will introduce a new shortcut that the consumer’s brand takes and how the crafty marketer can take advantage. Last week’s topic was Confirmation Bias.
This week we are discussing:
Anchoring refers to the cognitive bias for human beings to overly rely on one piece of information, usually the first piece of information, and to judge additional information provided against it. This impacts decision making, because instead of parsing out options and weighing them evenly, we tend to place more importance on the first option and then compare and contrast each proceeding option against that one.
That means that options are not on an even playing field, even though we’d all be better off if they were.
For marketers, however, this means that there are some best practices you can follow to steer consumers in the direction you want them to go. Here are a few examples of how to do that:
- When presenting a discount or special offer, always mention the full price first. Rather than simply describing something as half off, quote the full price and then show the new, lower price. That discount looks a lot better when compared to our anchor, which is much higher.
- Pricing tiers are common in many industries, especially among technology and service companies. Pay one price, get X. Pay a higher price, get X +Y, and so on. You will notice that a common practice is to show three different plans side by side. That’s because if there were two plans, people would steer toward the cheaper one. But with three, people are comparing the second two to the first one, and will usually choose the middle option.
- When comparing your own products to those of your competitors, anchoring is a powerful tool. By choosing the specific characteristic where your product offers more value and highlighting it, you are controlling the conversation in the consumer’s mind.
Successfully deploying strategies that take advantage of anchoring can help companies convince consumers to make the right decision right now.
Stay tuned next week for another installment of the Psychology Hacks series. Have a suggestion? Let us know.