How To Influence Your Customers Perception of Price

Psychology has a lot of influence on customer behavior. When it comes to making decisions, we like to find ways to make them more manageable. Anchoring and Adjustment is a mental short cut or heuristic. We use to help evaluate numbers. 

Anchoring and Adjustment help us generate numbers. It works like this: First, there is a base number established either by the individual or an outside influence. Then, you adjust up or down from there. It helps simplify decision making. 

For example, if you needed to estimate the height of a tree, it can be hard to come up with an estimate just by looking at it. But if there is a building next to it, and you know how many stories the building has, you can use the approximate building height to determine the baseline. Then, adjust the height of the tree up or down from the baseline as appropriate. 

Retailers you Anchoring and Adjustment, too. Neiman Marcus, the luxury retailer, does it in its annual holiday catalog. The “Fantasy Gifts” featured in the opening spread and their sky-high prices make the rest of their high-priced items look like a relative bargain. 

However, it isn’t just the upscale retailers who use this psychological phenomenon. Warehouse stores do it, too, by putting their most expensive items right at the entrance of their retail locations. If you see a $3,000 TV upon arrival, won’t the 30-pound jar of pickles seem to be a steal at $50?

This episode of the Intuitive Customer explores Anchoring and Adjustment and the influence it exerts on customer behavior. We also reveal how you can follow the lead of retailers of all types to benefit your Customer Experience strategy, as well as your bottom line.  

Anchoring and Adjustment is a specific heuristic used to generate numbers;

The Intuitive Customer podcasts help you take your Customer Experience to the next level by unlocking the “hidden” aspects of your experience and determining what really drives value for your customers.

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