Multiple unit pricing is when you simply add a discount for buying in bulk – for example, three packs of beer for £21 instead of £9.00 each.Īgain, the idea is to make people think they’re saving money when they’re actually buying something they don’t even need. Supermarkets have been milking this one for decades and people still queue up to hand over their cash for this classic trick. People were drawn to the place because of the hype and opened their wallets because an almost $20 burger seems reasonable at a place that charged $69 for a hotdog. ![]() But the sales of their $17.95 cheeseburgers – a price no-one in their right mind would normally pay – soared. Sales of the ludicrous $69 hotdog weren’t particularly impressive, despite all the press. The pricey food chain made headlines and even landed itself in the Guinness Book of World Records for the most expensive wiener in history – all of which resulted in masses of exposure for the New York eatery. If you need proof this actually works, look no further than the hilarious $69 hotdog marketing ploy by Serendipity 3. Start by showcasing your £16,000 honeymoons and £8,000 starts to sound more reasonable. The same thing applies to every kind of luxury purchase. #3: Manipulating price perceptionĮver wondered why car dealerships put their most expensive models at the front of the display room when they’re typically the slowest selling models? When you walk past that £120,000 BMW i8 that £65,000 M5 suddenly doesn’t seem so expensive. But when it displays the annual price at $12.49 after the monthly price, it seems like people are saving money by signing up for a year even though they’re paying $134.51 more and tying themselves into a year-long contract. Obviously, it’s far better for Zoom to get an annual payment of $149.90 from users upfront than a single $14.99 payment each month. This is a classic tactic used by software firms that exploits anchoring bias. Any discount price that follows instantly gains weighing because you’ve already anchored that initial price into people’s minds. If you put the original price first, though, this acts as an anchor representing the true value of the item. In many cases, they’ll simply put the new discounted price and tell people they’re getting a bargain – but this doesn’t really illustrate the saving. Next time you see promotion sales, pay attention to how retailers present their savings. So let’s look at how marketers use anchoring bias to influence buyer decisions. Various studies have shown how difficult it is to avoid anchoring since the pair theorised the phenomenon and this helps explain why it’s so effective in marketing. The first price acts as an anchor, influencing people’s interpretation of the prices they come across in the future.Īnchoring bias was first theorised by Amos Tversky and Daniel Kahneman in the 1960s. Likewise, they’ll assume the item is overpriced if they see it on sale somewhere else for £12.50. During decision making, anchoring happens when the initial information influences the way people interpret following pieces of info and then form a conclusion.įor example, if you tell someone a product normally costs £9.99 they’ll instinctively think they’ve found a bargain when they see it advertised somewhere for £7.99. What is anchoring bias?Īnchoring bias is the human tendency to put more weight on the first piece of information offered than everything that follows. And, as of today, you’ll be using it to boost conversion rates in your own marketing efforts. You’ll see this as you walk around the supermarket, compare different software platforms online and feel the temptation of discount promotions. ![]() This week we’re looking at something called anchoring bias, which is one of the most fundamental principles in marketing today. Throughout 2017 we looked at a number of psychological devices marketers use to influence buyer decisions – and we’re not done yet.
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