With this new category, the team from Digital Engage wants to introduce you to the most important psychological methods and techniques behind online persuasion. Today we want to show you what “anchoring” is and how you can actively apply this technique on your website to increase your revenue and engage your customers.
Anchoring is one of the six crucial cognitive biases, you need to know if you want to grab the attention of your online audience. Cognitive biases are mental shortcuts that we all use and are prone to – simply because our brain wants to save time and energy. But they often lead to irrational behaviors and bad judgement – this is why they are so interesting for psychologists and marketers.
Anchoring means that we humans have a tendency to rely on the first piece of information (“anchor”) when we make a decision. The anchor serves as a mental reference point for the decision we are about to make. All of this happens subconsciously, which means we are not fully aware of what is going on. In 1981, the two researchers Tversky & Kahneman discovered that we even rely on anchors if they are completely wrong or totally irrelevant to our decision.
O`Keefe & Jensen (2008) proved these findings in a scientific experiment. The researchers presented 6 different products, which included computers, wine, luxury chocolate, books, etc.. The participants were asked to write down the last 2 digits of their social security number – this served as the (unconscious) anchor. Afterwards, the participants were asked to tell the maximum price they are willing to pay for each item. The results were quite astonishing, because the anchor had a huge influence on their decision-making process . Those participants whose last 2 digits were between the numbers 0-19 were also by far the lowest bidders. Whereas, the participants whose last 2 digits were between the numbers 80-99 were the highest bidders – on average they were willing to pay 3x more. Basically the results showed that, the participants were highly influenced by a hypothetical number that had indeed nothing to do with the actual price for the products. Isn’t that super surprising?
How does this look like in real-life ?
Let’s have a look at a screenshot from Nudgify, a company which offers an app to increase social proof. A user can choose from three options, either a 89 $, 29$ and 9$ subscription. You can recognize that there is a special focus on the middle option – the genius version. It is clearly highlighted, sticks out from the others and there is also a red butterfly on the top.
Now – are you able to identify the anchor?
The anchor in this example is the agency option for 89$. Did you get it right?
The agency version and specifically the 89 $ is the first thing your brain recognizes. Remember this happens unconsciously and you are not fully aware of it but it might influence your next step. Why? Because as soon as you catch the attention of the genius option (the product you actually ought to buy), your brain will send the signal: “Wow, this is a much cheaper price. What a bargain!”. In reality your brain is simply primed to the 89$ and it uses this price as a simple reference.You can see that the marketers did a really great job here!
Lastly, we want to show you how you can apply this online. You can always use an anchor to make your prices seem more rational. Also, it is a great idea to offer several pricing options so that your online users compare your prices to one another and NOT to other companies. A good rule of thumb here is to portray 3 different pricing options, because you don’t want to overwhelm your online audience with options. Otherwise, your customers might get overwhelmed by choices and might just leave your site. Lastly, try to put an extra emphasis on either your middle (as you can see in the example) or the most expensive option. Awesome!
Anchoring is just one of the cognitive biases you need to know to boost your online success. Get in touch to find out more.