Article content:

1. Definition of anchoring bias
2. Anchoring examples in price perception
3. Anchoring examples to increase sales
4. Anchoring examples in meetings
5. Anchoring examples in estimating numbers
6. Anchoring examples in negotiations
7. Summary

Definition of anchoring bias

Anchoring bias is our tendency to rely on the first piece of information we encounter. Such information serves as an anchor, and we adjust our next decisions around that reference point.

Anchoring bias affects our daily decisions, including purchase decisions and the important decisions we make at work. An anchor can be basically anything – our perception of price can be anchored by a number (even a random one), and we can use our previous decisions as a reference point for our subsequent choices.

Examples of anchoring in price perception

The most common use of anchoring in sales are discounts. You see it every day – the original price serves as an anchor and the discounted one suddenly doesn’t seem that bad.

Take Serendipity 3 as an example. This restaurant in New York City created something no one had done before. Literally – it made it to the Guinness Book of World Records. A $ 69 hot dog.

But they didn’t make it to sell it, no. Just think about it – once you see that expensive hot dog on the menu, $ for a cheeseburger suddenly seems like a much more reasonable price, doesn’t it? And that’s exactly how anchors work. After introducing the hot dog, the sales of their cheeseburgers skyrocketed hvorfor gifte seg med en kinesisk kvinne.

The Haute Dog of Serendipity 3, also known as “decoy”. Because of its ridiculous price, it makes the other items on the menu seem cheap in comparison. Source: Money.inc

Example 2: Changing the context to make the price seem lower

What’s the highest price you would be willing to spend for a 474g (17oz) bag of coffee? €10? €20? €45?

Let’s be honest, €45 for a bag of coffee sounds ridiculous. BUT, if you did the math, you would find that it is the same price per gram as 50 cents for a Nespresso pod

People are well aware of the prices per bag, as they buy coffee quite often. This is already an anchor. Whenever we see a €45 bag of coffee, we compare it to the price we are used to, so it seems far too expensive.

Nespresso came up with the brilliant idea of selling their coffee in pods. A pod equalled a cup of coffee, so it changed the anchor. When we think of a cup of coffee, we don’t compare it to a bag of coffee but to the cost of a cup at Starbucks. Suddenly 50 cents for a Nespresso pod looks like a bargain compared to €3,50 for an Americano at Starbucks.

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Example 3: The good ‘ol “.99” trick and the power of the first number anchor

If you think the .99 price is the oldest trick in the book and does not work anymore … maybe you should think again.

Study after study finds that the first digit works as an anchor for price gauging. That is why we are 50-100% more likely to buy a t-shirt costing € than one costing €40. In a study from 2021, a group of researchers from Ohio State University found out that when choosing between a small coffee for $0.95 and a large coffee priced at $1.20, only 29% of people chose to go with the larger option.