The anchoring effect how to#

Penny eliminated all sales and coupons at every store location. Penny learned the power of the anchoring effect when it changed its store model. This is a tactic used by many retailers for one simple reason: It works. They advertised my couch at a price of $725, calling it an “everyday low price.” How would I know that was a good deal without having another price to compare it with? I wouldn’t, which exemplifies the power of the anchoring effect. So, in my mind, I saved $465! Score!īut let’s say I only went to Furniture Store No. By going to all three locations, I could use the $1,190 original price as my anchor. This first piece of information (the “anchor”) informs our judgment of all information after. The anchoring effect is a common human tendency to rely heavily on the first piece of information offered when making decisions. This phenomenon is known as the anchoring effect.

But would I have known that had I not compared the price at different stores? If I had only gone to the last store, would I have felt like I was getting a good deal? The truth is, probably not! Clearly the third location was the best value. I almost purchased this couch at the first location, but luckily waited till I had visited all three stores before finally making the purchase at Store No.

The anchoring effect how to#

How to Use Psycho-Sensory Principles in Brand Marketing Are you currently using psycho-sensory principles in your marketing? If not, you should. Your Customers as Seen Through Their Cognitive Biases and Predilections