Fine-tuning Sales Strategies: The Power of Framing and Anchoring

The Art of Framing

In sales, how we present information matters as much as the information itself. This concept is known as framing. Imagine you're a painter. You have the freedom to create anything on your canvas, but how you choose to present it to the world - the frame you place around it - can significantly influence how it's perceived.

Framing in sales works similarly. It's about presenting your products or services in a way that influences and guides your customers' decision-making process. By emphasizing the benefits, mitigating perceived risks, or highlighting the unique selling proposition, you can help your customers view your product as the best solution to their problem.

So, how can you effectively use framing in sales?

Highlight Benefits Over Features: This is sales 101. Instead of focusing on the features of your product, frame them in terms of the benefits your customers will receive. If you're selling an energy-efficient refrigerator, don't just mention its high Energy Star rating. Frame it as a way for your customers to reduce their carbon footprint and save on electricity bills.

Contrast to Clarify Value: By contrasting your product or service with those of your competitors, you can make its value more apparent. Frame your product's unique advantages to ensure your customers understand what sets it apart.

Focus on the Solution: Frame your product or service as a solution to a problem. Your customers are more likely to be interested in solving their issues than just buying another product.

Anchoring: Setting the Stage for Negotiations

Now let's cover concept of anchoring. In a sea of information, the human mind tends to latch onto the first piece of data it receives, using it as a reference point for all future decisions. This is known as anchoring, and it's particularly relevant in sales negotiations.

Think about the last time you went to a store during a sale. You might have seen a shirt originally priced at $100, now marked down to $60. That original $100 price is the anchor. It's what makes you perceive the discounted price as a great deal.

So how can you use anchoring in your sales strategy?

Set High Expectations: When negotiating, start with a higher price than what you expect to settle for. This initial price becomes the anchor, making any subsequent price decrease seem like a significant saving.

Highlight Maximum Value: When discussing your product, start with the most premium option, even if you believe your customer might be more interested in a basic version. This creates a perception of maximum value and makes other options seem more affordable in comparison.

Establish Expertise and Credibility: Before discussing price or specifics, share information that positions your product or company as a market leader or innovator. This sets an anchor in the customer's mind about your credibility, which can positively influence subsequent discussions.

Pulling it All Together

Framing and anchoring are more than just sales tactics. They're about understanding human psychology and using that knowledge to guide your customers towards making decisions that solve their problems. Remember, effective sales is all about building relationships and adding value. When used ethically and genuinely, framing and anchoring can help you do just that.

So next time you're planning a sales presentation or heading into a negotiation, remember the power of framing and anchoring. Frame your product as the solution, and set the right anchors to guide your customer's decision-making. Leveraging these psychological tools can significantly enhance your sales strategy and improve your outcomes.

Further Reading

Interested in exploring the overlap between psychology and pricing? Nick Kolenda publishes an?extremely detailed guide?listing various concepts in psychology as they relate to price. Each item describes the effect and includes links to the study or studies that validate(s) the concept. A few highlights:

• Expose People To Any High Number: It turns out you don't need a higher-priced version of your product to make framing work. Including any high number near your price has a similar effect.
• Be Precise With Large Prices: If your product is considered an enterprise sale - If the list price is high five figures or even six (or seven), use precise numbers rather than whole numbers. We associate precision with small numbers ($7.99), and this translates to larger numbers ($351,562 feels smaller than $350,000).
• Mention the Increase From The Discounted Price Rather Than A Decrease: Since the unit of a percentage discount is larger when stated in the context of the discounted price (An item discounted from $100 to $80 is 20% cheaper, but the $100 price is 25% higher than the $80 discount price), use the discounted price as your anchor when presenting price. The higher number in the discount will make it feel more valuable even though the math is the same.

Nick's Guide?has dozens more of these techniques, so if you are interested in the psychology of pricing, definitely check it out.

Author, Nick Rini, is Chief Revenue Officer at TalkMeUp, Inc.