Create the anchor point that describes the value of your offering so that you control the terms.
- Stores will often offer a discount on accessories that are bought in the same transaction as a product, and for good reason. The product provides the anchor point and so any accessory is going to look cheap in comparison. Coming back the next day to purchase accessories, you’d be comparing them against each other rather than against the price of the original product.
Anchoring in a retail environment normally works by displaying a range of products, each with a similar aura of quality, but with progressively more features and progressively higher prices. The cheapest item now becomes the anchor point. It is this one that is advertised in sales fliers. It doesn’t matter that this item is twice the price that a customer thought they should pay – as the cheapest available option it now sets the anchor point. From here it is relatively simple for sales staff to move a customer up through the range of items by showing the comparative benefits of each subsequently higher priced option.
An alternative approach is to set a high-end anchor – no matter how fanciful – so that all other prices seem reasonable in comparison. Restaurant menus do this, showing the expensive cuts of steak and seafood dishes at the top of the menu, and cheaper pasta dishes further down. Even if the pasta is expensive, it’ll seem cheap in comparison to the steak.
How to own the anchor
- For a high-end anchor:
- Show a range of comparable products, with the most expensive setting a high-end anchor price sufficiently large to make the rest of your products look cheap by comparison.
- Make frequent comparison to the high-end anchor when describing other products’ prices.
- For a low-end anchor:
- Show a range of comparable products, with the cheapest setting the lowest price that you are comfortable with.
- Ensure that the low-end anchor price does not deviate substantially from customers’ expectations, or that comparison with other vendors is difficult.
- Start from the anchor point and then work customers upwards towards more expensive products in the range.