What one simple, psychological word-change caused sales of Snickers bars to increase by 38%? Using a specific, but ambitious, figure in your marketing (rather than a vague pronoun) will force customers to revise their view of your product or service and often buy more. Read on to learn about anchoring.
How many Snickers bars do they really need?
So, a potential customer walks into your store or business premises, or lands on your website, or sees an advertisement. And – whether this is a well-researched purchase or a spur-of-the-moment grab – they’re in the market to buy. Little do they know, but their ideas around quantity and price are about to change – in your favour.
‘Anchoring’ can be a simple but incredibly powerful tactic to use in your marketing. Whatever your customer might have imagined they needed or would buy, you can rapidly change their view by presenting a new figure that challenges, and shifts, their expectations. This new figure carries an element of surprise.
A small-scale example was seen in a field study of Snickers bars on display in convenience stores, during what must have been a hot season. The study ran with two variants on signage. One read simply: “Buy them for your freezer”. The other said: “Buy 18 for your freezer”.
The results of the test raised eyebrows. Displays specifying ‘18’ sold 38% more Snickers bars than their neutral control.
What’s going on here? It’s a simple test of psychology. Without a suggested figure, a customer has only their own internal ideas to go on. Most people only buy one or two candy bars to eat on the same day. Even if you were going to buy a few more to store for later, you probably wouldn’t go above 4.
We can probably agree that 18 is a fairly unlikely amount of Snickers bars to buy in one go. To most people it would feel outlandish. But because it’s an external suggestion, many customers will revise their idea of what is an acceptable number of Snickers bars to buy at once.
Their internal dialogue might go something like: “18 bars is ridiculous. Only a crazy person or a glutton would buy that many. But putting some by in the freezer is a good idea. I’ll only get 6.”
The point is, a few minutes ago, 6 Snickers bars would have been a lot. They would probably have laughed at the idea. But now it seems rather moderate. This is the power of anchoring. You’re changing people’s internal sense of what is reasonable by introducing an external opinion or suggestion that seems extreme but, because someone else might be thinking it, the customer revises what they think accordingly.
As you probably already know, anchoring can work for price, too. You’ll find many stores placing high-value products near the entrance so that other items will seem comparatively cheap. Or brands with a fairly high-spec (and high cost) product have been known to create an even more expensive version to position next to it, driving sales for the original, which now seems like a great deal.
In this way, price anchoring is the opposite of discounting. Instead of a drive to the bottom and lower profits, you have adjusted people’s perspective on the value of your product or service, so that your usual price feels very reasonable. The result being your business maintains its revenue and margins, you are not seen as a bargain-bucket option and you avoid having to compromise your standards to make a lower price work for you financially.
Helping people make 35,000 decisions every day
The ideas behind anchoring are based on an understanding of decision-making. Depending on who you ask and how you define it, the average adult makes anything between 122 and an eye-watering 35,000 decisions every day. And one source claims that an amazing 87% of people admit to frequently changing their minds.
As marketers, we only need to make a key difference to just one or two in order to change the fortunes of our clients. In fact, we could say there are 2 basic decisions we want to affect most:
- Whether to look
- Whether to buy
If we can make these decisions easier and quicker for the customer, with less doubt over the outcome, then we will have done our job. And our clients will have made more money.
More is Ok
The main point here is to get buyers comfortable with the idea that more is OK – whether that’s in terms of the quantity they buy or the amount they spend.
With only their internal frames of reference to go by, most customers will err on the side of caution. They’ll go for the cheaper deal, or not buy at all.
By using anchoring strategically, you are showing them that their uninformed judgement may be off. You’re encouraging them to question what they thought and alter their view on what constitutes a realistic amount to buy, or to pay. And, in the process, to make them feel comfortable with their decision.
How this relates to the content and copy in your business
It can be a challenge to tie subtleties like anchoring into your content, but with some thought you can find a number of opportunities. The key principles are to be unafraid of adding an unreasonably high anchor figure, and to be prepared to back up your offer if necessary.
Creating tiered offers
You may already have two or three tiers to your products or services – perhaps a basic/introductory plan, the standard offering and a premium product at appropriate price ranges. Why not add a super-premium option with everything and the kitchen sink included, for a stratospheric price? You can almost certainly bet nobody will take you up on it (but if they do, it’ll be well worth your time), and you’ll have made your standard and premium offerings look like great value.
Placing highest value item first
When listing products and services, it’s common to see designers positioning them in ascending order of cost, starting with the cheapest option. This is borne out of the idea that placing a cheap deal first will make buyers more receptive, but it’s really a mistake. Starting with your most expensive deal and then working downwards will position your business as a premium supplier right from the start and make your standard offer seem very respectable. They’ll certainly feel less inclined to go for the basic plan and be seen as cheapskates.
Using the highest stats possible
When using figures, statistics or any kind of metrics in your marketing, think in terms of scale. Instead of numbers per day or week, use per month or year. Anything viewed at a larger scale will look many more times as impressive. Unless, of course, where speed is an issue, in which case you could use the tiniest measurements of time with reference to your product. In either case, go for the furthest end of the spectrum to give your marketing the most impact.
How do you know this will work?
All said and done, using anchors in marketing can work wonders for some brands, but might not have the same effect for others. There could be many reasons for this – from cultural to the type of product, its necessity (or not) or the exact traits of your target customers.
There’s only one way to find out if what works for others will work for you: Testing. You’ll need to experiment with different ads, headlines and offers in your shop and website to see how people respond. There’s no need to feel nervous about this – every good business tests their displays, offers, products and promotions regularly (just ask Amazon) – and whatever you try will not be set in stone. You’ll just need to give tests enough time to gauge results.
The beauty of changes and trying new things is the learning that comes out of it. By experimenting with how you frame your marketing and packages, you are likely to find out something new from or about your customers. What if a mega-premium offer suddenly sells like hot cakes? How many conversations might an extreme anchor start? Don’t leave anything off the table until you know for sure you don’t need it.
At StrategiQ, testing is part of our everyday culture. You’ll get to see how we’ve run variations of ads or headlines to find out which are most effective, and you’ll easily be able to request adding a higher-priced option to see how it affects sales of your standard products.
Use psychology wisely
Anchoring can be a very powerful tool in getting customers to spend more than they anticipated. As such, you need to be careful when you use it, and be guided by your own moral compass. Customers’ minds can be changed when it comes to ideas around value, and they may be swayed to buy or pay more, but they are not idiots.
If people feel they’ve been fooled or ripped off, then they’ll react badly. Could your business endure a spate of bad reviews on Google and Trustpilot? Make sure they are satisfied and go away with a warm glow of value!
Talk to the marketing psychology experts
If you want to give your marketing more thought and look closely at your target market, then you’re in the right place. Your marketing, and your business, has a lot to gain.
Don’t wait until tomorrow to sort this out. Your competitors could be already trying some new anchor techniques today…
This article was inspired by item 9 in Katelyn Bougoin’s mind-blowingly awesome tweet thread on marketing psychology, which was in turn inspired by The Brainy Business’s podcast episode on anchoring and adjustment, which drew on a historic study in the Journal Of Market Research (p.76).