How to harness Anchoring in Marketing?
We often get attached to a certain campaign or product once they are promoted. Have you ever experienced this? Once you see your friends are having a vacation near Sea Beach and your interest in going to a similar location crosses your mind instantly, Do you start to plan for your next vacation?
Or you’re doing your household shopping in a grocery store. You still buy the things you do not need after seeing a discount or price comparison? There are certain psychology marketers use on a daily basis to sell more products.
There are established psychological theories that you can use to build your next product, marketing campaign or pricing of your service too?
In this series: Psychology in Marketing & Product Development, I am going to talk about Anchoring.
What is Anchoring?
We generally tend to rely on one piece of information, usually the first one, when calculating the value of a certain product. This primary “Value” or price is used as a mental reference system, which might influence the choices you are going to make.
Let’s see some examples:
Highest price first
Place or anchor the most expensive price of your product and services to the customer’s mind by listing it first. This order makes the other plan looks like a good bargain.
Lowest price first
Didn’t I just say the opposite? Well, if there’s not much of a price difference, try to anchor the lowest price. In that way, it will look like the service is slightly more expensive, but definitely more valuable offer you can’t ignore to refuse.
Listing higher-priced unrelated product
A study by Nunes & Boatwright, 2004, shows that when a customer is exposed to the higher priced goods even for an unrelated product, their willingness to pay for goods & services are influenced.
Place any high number in front of the audience
The anchoring effect works with any number, even if the number is not always a price. This can be the number of customers who bought the product previously or joined the similar cause based on a study by Adaval & Monroe, 2002.
Pricing with multiple-unit
The number of units or available stock works as an anchor in a promotion campaign. An experiment by Wansink, Kent & Hoch, 1998 proves a 32% increase in sales after using this tactic. This anchoring technique influences which quantity a customer should buy.
Setting a quantity limit
Wansink, Kent and Hoch also found out that, setting a quantity limit also affects buyers shopping behaviour. In their experiment, shoppers bought 3.3 cans of soup when they had no limit. On the other hand, shoppers purchased an average of 7 cans, when a limit of 12 was set.
Hope you liked how Anchoring is used in to influence more customer to purchase the targeted product. I am going to come up with more psychological techniques for the marketers & product developers in upcoming parts. Till then, you can go through my other articles about marketing & digital media.