As we know by now, psychology plays a critical role in marketing and advertising. Anchoring bias or anchoring heuristic is one of these cognitive characteristics that can be applied to marketing strategies. The anchoring bias describes our human tendency to favor the first piece of information offered about something when making decisions. It is then difficult to part from this once you’ve made up your mind, despite the fact that other options may be more beneficial. Let’s look at an example to further explain how this works. Let’s say that you just went shopping and the first car was a set price. Now everywhere you go look, you refuse to go any higher than this number. This is the base price that has been anchored in your mind. Side note: there are internal and external factors that affect how one uses the anchor based on prior knowledge beliefs, etc. A person’s self-confidence or lack thereof in this case will be more vulnerable to the effect. This type of anchoring bias can be used as a marketing technique for brands.
1. Higher initial pricing:
2. Offer packages of services/products at different pricing levels
3. Persuasive language
4. Highlight benefits of product/service
Brands should make sure to use social proof when using the anchoring effect. This will establish that others have purchased and believe in the product/service. This will really embed the anchor in their mind. It can help your brand increase sales and let’s be honest, you will get what your business is worth. The anchoring effect can be a very useful tool.
