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How the Anchoring Effect can change your customer experience
Why first impressions radically change our decisions.
We have a very narrow view of what is going on.
—Daniel Kahneman
Have you ever bought something just because it was on sale?
Your rational mind knows that the sale price is never the real price. But you were persuaded by the deal. “It’s 50% off,” you say to yourself, “I’ve saved so much money!”.
Seeing the regular price and then the sale price influenced you. It made you feel like you were getting an unmissable deal.
But in reality, the business will still make money off the reduced price. And having a “sale” triggered a purchase that they wouldn’t have gotten otherwise.
So why are sales such a powerful persuasion tool?
It’s all down to a behavioral science principle known as the Anchoring Effect.
What is the Anchoring Effect?
Discovered by researchers Tversky and Kahneman, the Anchoring Effect states that decisions are influenced by the first information we see. We anchor to this information without being consciously aware of its effects.
This principle has been rigorously researched, in situations as varied as house prices, legal judgments, and purchasing decisions.
The Anchoring Effect in action
In 2006, researcher Dan Ariely led an experiment at MIT. He held an auction with a twist. He showed students in his class random objects, like a bottle of wine or a textbook.
Ariely then asked students to write down a fake price for the item using the last two digits of their Social Security number as if it was the price (so if my Social was 123–45–6789, the price of a bottle of wine would be $89…
