Let's talk about Anchoring Principles

Anchoring is a psychological parameter that is used as a cognitive bias in both designing as well as marketing approaches. The principle is used to limit the decision making and range of thoughts, usually making audiences to act within the suggested criterion.

Anchoring is used to make suggestive options that are desirable and can challenge the audience's decision-making capacity.

In the above image, Choice Plus is an anchor package that has already been recommended for the audiences. It is cleverly placed between Plus and Pro; where Plus is a miniscule amount away from the Choice Plus, with no additional features.

Anchoring is a principle used in User experience design to alter audience decisions by capitalizing on their inability to make critical judgements or arrive at a suitable decision. The principle uses prompts or triggers to bring about the needed shift in buying behaviour.

We see numerous cases of anchoring in our everyday life. Think about it, your grocery shopping online might give you pricing indicators like sale price and regular price. The sale price is however the anchored price making the regular price seem cheaper.?

It is only when we have a relative comparison that we know what is cheap or expensive.?

When working on Anchoring price

You should set the anchor price as a yardstick against which other prices can be defined.?

Acceptable price limits

Defining the anchor price and then setting the relative price should be well within limits. If the relative prices are too high as compared to the anchor price, the anchor price will seem cheaper, and vice versa.

Anchoring can be clubbed with newer concepts and cannot be used regularly as it does not show many conversions in the case of experienced buyers or people with higher cognitive abilities.

The above pricing strategies are not very distinct from each other. Maintaining the relativity in pricing makes deals look fairer.

In the above image the relativity in pricing is very distinct making one package comparatively steeper of higher than other. The facilities at the same time are not very attractive or distinct? if we compare the standard and plus version. Thus, creating a confusion for the client on the choice of right package. There is a distinct price variance in the Plus and Pro version, which again is differentiated only by phone support, which comes very high on the pricing. In the above example Plus version is the recommended anchor pricing against which the audience would operate.

Anchoring is usually the first price stated in a negotiation deal. Consider buying a real estate property. When the agent or the owner tells the buyer about the first price, that is the yardstick and around that price, negotiations happen. This first price is the anchor.

How does Anchoring help marketers & designers?

Communicating Brand Goals

Companies highlight through the home page banners of their service and offer, their value, mission, vision and in the case of e-commerce sites, the best and trending items are displayed on the home page. This means they are anchoring these important things to their audience such that whatever else they see is just relative or not much important.

Bringing the best to market

Projecting the best builds an impression of the service or product. A power-packed 1-minute trailer of a movie can act as an anchor for the 3-hour movie. But to put this trailer in place requires a strategy and expertise that go around anchoring.

Captivating through titles

Many headlines can also be used as intelligent anchors. E.g., Top 10 ways to increase your business through Anchoring.

Anchoring does not just influence pricing, but also audience perceptions of whether a product is good or not. Most of the time it acts as a yardstick to differentiate between costly from cheap.

Strategies to Anchor?

Prices ending in 99

The marketing concept of Price 99 is very effective in pricing strategies. This is the left-digit effect, in which the customers tend to round to the next lowest monetary value. We are psychologically influenced by the left digit first and already make an opinion of the price. Even though the price more or less does not vary, the ending in 99 increases sales of low-value items.

Think about your product or service range

Pricing alone is not a component that needs to be anchored, but, relatively, quality, service, and customer support. What is more important is hosting a range of products and services to enhance sales.?

Relativity

The most expensive option serves as an anchor to raise the audience's price threshold mostly for the mid-range product. This approach has shown confirmed results and hence marketers and designers are making efficient use of it. If a "premium" tag is offered, sales for the mid-range product or service mostly increase, despite there being minor change in the offerings.

Consider your website design

Your website is a platform that should incorporate your different goals pertaining to cost, products, and services. By doing this you can influence customer decisions by setting different anchors.

Customer testimonials, positive comments, reviews, X number of items sold, ‘We are booked’ banner, and a lot of other interesting parameters can help define anchoring and effect conversions.

CTA button

CTA buttons can be optimized in various ways. But an anchor link can be created that directs audiences directly to the CTA button.

Anchoring is also used when a prospect audience clicks a certain category on the page they are directed to another page or down below the same page for additional information in the near vicinity of a CTA button.

Anchoring can be done in numerous ways to restrict your audience’s thought process to a choice of limited options. It can be tried over various parameters and each parameter has to be cleverly crafted to convey your message, and effect right communication with your audience.