Can You Really Control Consumer Perception?

💡 Controlling Consumer Perception With Anchoring

Anchoring can be a potent psychological tactic influencing everyday decisions.

I’m going to look into how anchoring manipulates pricing and product comparisons.

Let’s jump in!

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⭐️ How to Use Anchoring

What is it?

Anchoring is a cognitive bias. It refers to the human tendency to rely too heavily on the first piece of information offered (the "anchor") when making decisions.

This initial input sets a framework for everything that follows and can significantly affect decision-making, especially in purchasing scenarios.

1) Price Anchoring

Price anchoring is prevalent in sales and marketing. Initial prices set expectations and influence how customers perceive subsequent value. This tactic can manipulate the perceived bargain of an item based on its initial displayed price versus its sale price.

SaaS companies often use a tiered pricing model to anchor customers to a particular price point. By presenting a premium or enterprise tier at a high price, the middle tier seems more reasonably priced.

• Example: a SaaS product might offer three plans: Basic at $29/month, Professional at $79/month, and Enterprise at $299/month. The high price of the Enterprise plan makes the Professional plan appear more affordable.

2) Comparison Anchoring

Comparison anchoring extends beyond pricing. It involves setting a standard of comparison in features, quality, or other attributes.
This method is effective when introducing new products or technologies by linking them to familiar concepts or benchmarks.

Historical Insight:

• James Watt and Horsepower: By equating the power of steam engines to horses, Watt provided a relatable performance metric that could be easily understood, helping to popularize his engines. Read more here.

• The "Two Months' Salary" Rule: In the late 20th century, De Beers launched a campaign that suggested that an engagement ring should cost 'two months' salary'. This set a high anchor point for the price of diamonds and also linked their value to the emotional significance of marriage and commitment.

Modern Example:

• Tech Gadgets: A smartphone advertised with "20% more battery life than the leading competitor" uses comparison anchoring to set its product apart in a saturated market.

3) Implementing Anchoring

It’s crucial to understand your audience and market dynamics. Here’s how you can integrate anchoring into your business strategies:

• Set Clear Anchors: Whether it’s pricing or features, establish clear anchors that will serve as a reference point for all comparisons.

• Context is Key: Ensure that the anchor is relevant and offers a legitimate comparison that resonates with your target audience.