Anchoring Effect Principle

First impressions matter. For example, when it comes to website design, if you don’t help people understand in a few seconds how you can solve their problem, they’ll leave your site.

First impressions are quick. A Google study showed that they can be made in 17 milliseconds!

When a prospective customer first learns about your brand, they hear your company’s name or see your logo. First impressions matter when it comes to your company’s name and your logo. After all, it’s impossible to anchor and create an advantage if your prospective customer can’t remember or spell the name of your business.

The same holds true for your business logo. Far too many struggling businesses created their logo from a generic template or an online template logo maker. The problem is that thousands or tens of thousands of other businesses have identical or similar logos. It’s impossible for a brand to use the anchoring effect to its advantage when a consumer can’t recognize the brand!

So, how can you apply the anchoring effect to create a stronger brand and make sure that design works for your business and doesn’t undermine your marketing?

Make sure you find a unique business name for your business. Don’t use online name generators or generic lists of ideas. If you want a catchy business name that stands out from your competition, get help from experts.

Don’t settle for a generic logo based on a template or one created by a computer. It’ll look like tens of thousands of other logos and will help your business get lost in the crowd. Instead, understand how fonts, colors, shapes and lines in a logo design influence purchasing decisions. Work with experts to get a professional logo design that helps your business stand out.

And, if you sell products, learn how psychology can help you create an eye-catching packaging design for your products.

Anchoring has a deep impact on a person’s perception of value – which makes it an essential tool when considering a pricing strategy for your business.

A price without a value attached to it is a number with no power.

The value you assign to a price gives it meaning and helps consumers decide if they are willing to pay it.

Anchoring provides a context for estimating value.

Think of it this way: you walk into a convenience store on a hot summer day hankering for a fountain soda. The sign says you can get a 20 oz Coke for $1.79 or a 32oz Coke for $1.99. For a measly 20 cents, you can get almost twice as much Coke!

Having anchored that a 20 oz Coke is worth $1.79, that 32 oz for $1.99 suddenly seems like an awesome deal! It doesn’t matter that both are overpriced.

So, how can you apply the anchoring effect to how you price products or services for your business? Here are a few options to consider…

When setting your pricing, remember that the first option the client sees is likely to be the price that anchors in their brain. So, if your goal is to move your mid-price option, anchor the top-priced item by placing it first or by placing it in the center in a larger font to draw focus. This will make the mid-price option look like a great deal in comparison.

Want to sell your most-expensive option? Make sure that you set the lower price in a similar range and show how much more value comes with the slightly bigger price. Remember that fountain Coke? How do you say no to a much higher value for a minimal price increase?

Show a discounted price based on a higher original price. You see this often when someone posts the suggested 'retail' price which is crossed out and you’re instead presented with a lower price. Even if the final price is still high, the initial price was anchored and influenced how consumers perceive the actual price.

Customers can subconsciously anchor to any number – it doesn’t have to be a price. So, featuring any higher number next to your price increases your chance of a sale. Consider showing the number of items sold, the number of customers who have purchased, or even another unrelated item with a higher price.

Today’s marketing is ruled by data and metrics.

How do you determine if your efforts are a success? Metrics.

But, choosing the right metrics to measure can mean the difference between success and failure. And, anchoring doesn’t only impact numbers. The anchoring effect can manipulate how you perceive and value concepts as well.

The anchoring bias in marketing can easily mislead you.

So, when planning your marketing strategy, and how to measure it, keep the anchoring effect in mind.

The anchoring effect may lead you to latch onto pseudo-useful metrics because they were the first to appear on your radar. But, don’t get stuck there.

Don’t just aim for low-hanging fruit (data) that’s easy to collect and right in front of you. Instead, be mindful and carefully consider each option to be sure you’re making strong choices.

There are many important principles, theories, and concepts used in marketing psychology. These include:

• the principle of reciprocity
• information-gap theory
• scarcity
• social proof theory
• and loss aversion marketing

You can research each of these principles, plus dozens of other key principles of marketing psychology, via the links below.