Anyone who is in the process of making a decision needs a starting point. It can be a focal or anchor point. However, according to psychologists, most people tend to believe what they heard first, and it impacts their final decision immensely. It is known as a cognitive bias in psychology and referred to as anchoring bias in simple words. Apart from affecting your daily decisions, you can also use it anchoring bias to boost your sales.
You can make use of the anchoring bias effect to increase your business. It is easy and straightforward. But you must implement each of the tactics carefully. Here are a few ways you can influence the prospect’s buying decisions and make more money.
Original price or the discount
To capture the attention of a buyer, you should not only indicate the discounted price but also include the original price. Most buyers are looking forward to saving, so unless you let them know that they will save money, they are not likely to buy. Anchor the initial cost into the buyer’s mind, and you will increase your sales.
- Monthly or annual plans
The monthly and annual plans are a common sales tactic used by many online businesses. The annual offer is always appealing and one that helps you save in the long run. For example, when you see prices displayed at $14 per month and $144 annually. It means you will be paying $12 monthly if you go for the annual package. This leads to increased sales from people who need the product and plan to use for a long time.
- Manipulation of price perception
A good example of price perception manipulation is what happens in car yards; the expensive cars are displayed on the front line even though they are do not sell a lot.
However, as a buyer, you suddenly feel like the expensive vehicles are affordable and something you can do. By the time you get to the vehicle you intend to buy, your perception is already altered by anchor bias, and you are ready to pay for what you can afford.
- Multiple pricing per unit
Multiple unit pricing is a trick used by supermarkets to make people their products in bulk. They give discounts when you buy things in large amounts. It makes people they are saving money. This is one of the reasons people end buying things they do not need. Getting something for free will make people make impulse shopping thinking they save money or are getting into a good deal.
- Price Increase
The price increase is a tactic used mostly by tech brands. They raise the price of their products over a long time for every new product they release. For example, the iPhone 8 Plus was sold at £699, but the latest one is £999. People still pay a high price because they believe every new product is better than in the past.
- Core selling point
Apart from using price perception, anchoring bias can also influence the decision of buyers through a core selling point. This refers to how prospect interprets any information that you provide. As long as you can convince products are innovative, they will buy even if you are not an expert in the industry.
- GAS or the Gear Acquisition Syndrome
GAS refers to the constant desire that drives you to acquire new things even when you do not need them. It also makes you think that what you have is not good enough. If you are selling products, you can bring advanced versions or new products and make sales with the help of gear acquisition syndrome. This method of marketing works well if you target buyers who love electronics. They get new phones or computers to have the latest features that they hardly use.
Anchor bias is one of the best ways to get high conversion rates. It is a tool that every marketer should know how to use. It is a psychological ploy that makes people think are making well-calculated buying decisions. But end up benefiting the seller more.
You can do much more using anchoring bias when pricing your products. People will always fall for your tricks while thinking they are making the best choice. It is a tactic worth combining with other marketing strategies for excellent results. It changes conversions rates and increases them incredibly.
Using Anchoring Effect to Make Your Brand Better
- A catchy brand will not only make you stand out; it will be easy to identify in a crowded industry. Avoid going for common names because you will have no difference with your competitors. Get a terrific name for your company and using anchoring bias for increased sales.
- A quality logo also comes in handy. While you may be tempted to go for cheap generic logos, you should know that other people are using the same ideas. Your well-built business will lose sales as customers cannot differentiate with other similar logos.
Anchoring Bias effect on services and products prices
- Always remember that the first option is always likely what a client will buy. If you want them to buy the mid-priced products, start with the highly priced ones. You customers will find the cheaper products a great deal compare to the expensive ones.
- If you want to sell expensive products, be sure to show what value comes with higher prices. People are always willing to pay more for more excellent value, especially when the price is reasonable.
- Always include the original price when giving a discount. The buyer will be impressed by the significant price difference. Even when the current price is high, as long as the original price is anchored, it influences how a buyer perceives the newly discounted price.
The anchoring process is good, but it is vital to have a focal point. This is the only way you can be sure to make an informed decision. Get to learn how psychology helps you price and design your services or products. It is an effortless way to grow you your business.