How can you help keep your business afloat with pricing anchors
Anchoring is profoundly important to pricing for profit. Here’s why…
A product is never really ‘cheap’ or ‘expensive’ it’s all relative. People like to compare prices when deciding on a purchase. If you are out shopping for a Television, you will look at the different models and compare the prices and the specification of each.
One might be 55 inches and cost £1500 while the other might be 52 inches and cost £1000, so you would probably think that the 52-inch TV is the better value option given that the difference is only 3 inches, this is exactly what the store you are purchasing it from want you to think. You have inadvertently anchored yourself to the £1500 TV so that the £1000 TV looks like really good value alongside it.
When you understand the value of pricing anchors, you can then see how important they are in tiered pricing and how top-down pricing can be used very effectively to demonstrate to your buyer that you have provided different versions of the same product at different prices, while so subtlety driving them towards to price you want them to pay.
For more information on the effectiveness of pricing anchors in 3-tier, top down pricing go here