Anchoring is an odd effect. In its basic form, it primes us to use a number that we have heard, as a reference point for our next decision or estimation.
So, in an experiment, a group of people were first asked to think of the last two digits of their social security number, and then how much they would pay for a bottle of wine. The results were that those whose last two digits were above 80 were willing to pay $20 more than those whose last two digits were below 20. Completely arbitrary, but a very scientifically repeatable effect – we just can’t help hanging onto the numbers (or concepts) that we anchor to.
It seems to be a product of associative memory, where our brains find context in what we hear and use it to help us be in the right frame to think about things. But it can badly bias us too.
So, practically, how can might use this? Heres a few ideas:
Imagine if you had a hotels or holidays site, listing differently priced offers. Then, if you wanted to anchor your users to thinking your site was good value, you might arrange that the first item on the list is a little higher in price than the ones below it. If this doesn’t convince you, then consider the anti-pattern; when the first item is cheap, and the others are all more expensive, this won’t look good.
For cheaper goods, consider a promotion coupled with a purchase limit; for example 10% off a can of soup, but limited to 12 each. When this happened in the states, when the promo was limited bought 7 on average, when there was no limit, they bought 3.5.
When calling for donations, don’t just ask for money, ask using a number like Wikipedia do.
Key final point is to experiment. You won’t get it right first time, but the knowledge and use of this very powerful technique could significantly help your business.