Marketing is all about convincing. What better way can you convince someone to purchase your product than to understand their psychological needs? Savvy marketers make use of psychology to stay ahead of their competition. If they can understand how our minds function, they can more effectively market their products and services. In this blog, I’d like to discuss one strategy that has helped many other marketers and me across the globe to close more deals and increase sales by reducing the anchoring bias.
Understanding Anchoring Bias
The concept of anchoring bias refers to humans’ psychological shortcuts to making decisions. The world is constantly bombarded by data and must make quick decisions based on this information. To cut down on energy and time, the brains depend on mental shortcuts, also known as heuristics. One of these methods can be called anchoring bias.
It’s an exciting development for businesses since it lets them profit from the natural tendency of people. Companies can devise strategies to nudge their customers in the right direction and increase conversions when they understand how anchoring bias operates.
If we are confronted with some new data, our minds focus on the first item that is presented (the “anchor”) and utilize it to make decisions on the rest of the data. This could cause us to make irrational choices since we’re not considering all details. This means that we might have misperceptions which can lead to misguided decisions. One of the many crucial points to remember when leveraging anchoring bias is that everybody is susceptible to it. We believe we are rational creatures who make the right decisions based on logic. However, the reality is that our brains have been wired to take shortcuts. I am aware of how this method works, yet I’ve also observed myself vulnerable to it.
Although anchoring bias is usually employed negatively (such as when people are taken advantage of due to their tying their decisions to a too-good-to-be-true deal), it can be utilized for good. It’s an excellent opportunity to gain more customers and increase the size of your company.
Employing the Anchoring Bias To Increase Conversions
Many methods businesses can employ anchoring to steer customers in the correct direction. A popular method is price anchoring. It is when companies use the high price of their initial offer to anchor subsequent prices that appear more attractive.
Let’s take an example. For instance, suppose a company sells a shirt at $50. The buyer might believe it’s a fair price, but the business can employ price anchoring to boost the value perception for the item. They accomplish this by showing the client a shirt costing $100. They then offer the same shirt for just $50. In the blink of an eye, the $50 shirt appears to be a bargain!
Another method businesses can employ for anchoring is to provide references. This means enterprises offer clients something to look up their service or product to. For instance, a company may say its product or service provides “50% off” or “twice as good as the competition.” These references aid customers in understanding the value of the product they’re purchasing and boost their chances of making a purchase.
You could also apply anchoring bias to boost your site’s conversion rate by providing visitors with an expensive product first, then displaying discounts on the exact item. It is also possible to use it to boost the value you attach to your products by highlighting the entire list of features and benefits before revealing the cost. The idea of placing expensive items in prominent positions in displays that make others appear more affordable in comparison. Another use to use this trick.
Ultimately, businesses can utilize anchoring to give customers the impression of urgency. This can be done using limited-time deals or special offers to encourage customers to act immediately. For instance, a company could offer a “limited time only” discount or a “while supplies last” promotion. In creating a sense of urgency, businesses could pressure customers into deciding on having the time to consider it too long.
How To Utilize Anchoring Bias to Improve branding and website design
This potential bias can also be utilized to create strong branding and designs. If you start with a solid anchor, such as a striking logo or a striking color scheme–you can make an overall impression that’s hard to lose or overlook.
Contrast is an effective tool that will help to establish your brand’s image in the eyes of your customers. Different colors and designs help your business and product stick out the rest of the pack. If, for instance, the majority of your competitors use subtle shades, you might use vibrant and striking colors to attract your customers’ attention and make your brand stand out.
When designing websites, anchoring bias can play an important function. If you want your customers to be comfortable with your business, it may assist in showing the public that others have enjoyed their experience with your brand. This might mean displaying customer reviews or testimonials on your website or using social media platforms to share positive thoughts about your brand.
The most appealing thing is that anchoring bias doesn’t require any magic reserved only for the most renowned marketing experts. It’s an effective tool that can be utilized by any person who wishes to influence others.