Eric Siu explains the anchoring effect: a leather jacket marked down from $2,000 to $400 feels like a steal, so you negotiate it to $300 and think you saved $1,700. Marketers set a high anchor price, then discount it to make you feel like you're getting a deal.
When you think about anchoring pricing, so let's say Neil wants to go buy a nice jacket somewhere. Okay, so Neil goes into the store and he's like, this leather jacket is very nice. How much? Right? Well, typically $2,000, but there's a sale today. Today it's $400. Oh wow. And then like Neil might try to haggle a little bit, right? And get it down to $300. And then Neil thinks, wow, I've saved $1,700, but all along it was the same price, right? But the whole idea here is that you anchor high in the beginning and then they think they're getting so much value because Neil has already shown interest in that leather jacket. And you see this happening all the time. You anchor really high and say, hey, there's a discount right now. And that oftentimes will get people to convert. If you want more insights like this on AI marketing, and business, follow to learn more.
