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How Price Anchoring Can Make or Break Your Email Campaigns

In the intricate dance of marketing and consumer psychology, there’s a subtle yet powerful force at play: price anchoring.

It’s the silent influencer that can sway decisions and shape perceptions without a word.

A common saying you may have heard is “What’s the best way to sell a $2,000 watch? Put it beside a $10,000 one”

What is Price Anchoring?

Price anchoring is our cognitive compass, directing us towards what feels like a financial win.

It’s the art of setting a reference point, the ‘anchor’, which customers use as a benchmark to judge subsequent prices they encounter.

This initial piece of information is pivotal, as it can significantly affect decision-making and perceived value.

The Psychology Behind Price Anchoring

Humans have a natural tendency to rely on the first piece of information offered when making decisions, known as the ‘anchor’.

This cognitive bias can significantly influence our shopping behaviour.

For instance, when we see a discounted price next to the original one, our perception of the deal’s value is anchored to the initial, higher price, making the discount appear more substantial.

Steve Jobs Price Anchoring Masterclass 📈🍎

Steve Jobs stood in front of a captivated audience as Apple launched the iPad.

He went through all the impressive features and specifications of the new device. However, Jobs had another trick up his sleeve.

He was about to ploy a price anchoring technique.

A prominent figure of €999 displayed on the screen behind him.

By showcasing the $999 price, he established it as the initial anchor, a reference point that would anchor the audience’s perception of the iPad’s value.

“I am thrilled to announce to you that the iPad pricing starts not at $999,” Jobs declared, “but just $499.”

They had just pulled off one of the oldest, yet most successful tricks in the book – price anchoring.

This strategy is used in almost every industry. Tax luxury car manufacturers, by first presenting their high-end models, they set an anchor that makes their entry-level cars seem more affordable.

Similarly, fashion retailers often display premium lines at the front of the store, establishing a high price point that makes the rest of their collection feel more accessible.

🎩 The Magic of the Right Anchor

But it’s not just about slapping on any high number. It’s about choosing the right anchor that aligns with your product’s value, your brand’s integrity, and your audience’s expectations. It’s a delicate balance where credibility meets desire.

Anchoring not only influences the attractiveness of a price but also the perceived value of a product. A higher anchor can enhance the perceived quality, while a lower anchor might suggest affordability. The key is aligning your anchor with the value proposition you want to communicate.

Implementing Price Anchoring in Your Strategy

✅Set the Stage: Introduce a higher price point early in your email to establish the anchor.

✅Follow with Value: Present the actual offer against the anchor to highlight the deal.

✅Keep it Real: Ensure your anchors are believable and justifiable to maintain trust.

✅Test and Learn: Use A/B testing to find the most effective anchors for your audience.

Price Anchoring in Email Marketing

Now, let’s bring it closer to home—email marketing.

When you’re crafting that perfect email campaign, consider your anchors.

Are you leading with a premium product to make the follow-up offer seem more accessible?

Or perhaps you’re presenting a before-and-after price to showcase the deal.

Remember, the anchor is your opening act, the first number your audience sees. It could be a suggested retail price, a crossed-out higher price, or a competitor’s price.

This is your chance to frame their perception.

Price anchoring isn’t just a pricing strategy; it’s a psychological lever that, when pulled correctly, can unlock tonnes of perceived value and customer satisfaction.

Use it wisely!

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