Prices and Anchors

Pricing is all about psychology. And there's a useful psychological trick you can use called "anchoring".

Basically (and over-simplifying), it means that the first thing we hear is what we then use to judge everything we hear after that.

So if someone tells you that the new Tesla Model 3 is $35,000 - then you head to the website and see that the cheapest model available is $45,000, you're going to pause and take stock. But if it had happened the other way round, you'll be pleasantly surprised.

You can take advantage of this yourself, when presenting your pricing to your prospects.

If you mention that you've just completed a project for £100,000 for another client, you're immediately setting an anchor in their mind. They're probably drawing a sharp intake of breath at the six figures you've just mentioned. When, a few minutes later, you say "so we can deliver everything you need for £25,000", their first thought is going to be "oh, that's less than I was expecting".

Take action: What are your prices anchored against? If you're not setting it, your prospect will have set it themselves.

Rahoul Baruah

Rahoul Baruah

Rubyist since 1.8.6. Freelancer since 2007, dedicated to building incredible, low-cost, bespoke software for tiny businesses. Also CTO at Collabor8Online.
Leeds, England