Firstly, what is a cognitive bias? A cognitive bias is a limitation in rational thinking caused by the tendency for the human brain to take short cuts to save energy. Cognitive biases are coping mechanisms that allow the brain to process vast amounts of input. While the mechanism is very effective, its limitations cause errors in decision-making.
An anchoring effect is the tendency for the brain to rely too much on the first piece of information it received in relation to decisions made later on.
An anchoring effect is often seen with examples of was/now pricing. A higher price might deter a shopper from making a purchase. However,when the brand or retailer presents a lower sale price, the original higher price serves as the anchor, making the new sale price seem like better value.
A famous example of anchoring in action was when The Economist, offered three subscription options: a web-only subscription, which cost $59; a print-only subscription, which cost $125; or both web and print,which also cost $125.
Given these options in a study, no subjects chose the print-only subscription, which was the clearly inferior option. The majority chose the combined print and web subscription. However, when they removed the print-only option, 68% of people chose the web-only subscription. Even though nobody was interested in the print-only option, it served as an anchor to make the more expensive, dual subscription seem like a much better deal.
Shoppers need context and what they see first will and does anchor them. So, if you want shoppers to anchor to your brand in-store, there are a number of aspects you should consider.
- Own the initial anchor - When shoppers first approach the aisle and bay your brand resides in, what is the first number they see? If it is a price and you are not the cheapest, create another visually impactful numerical anchor. For example, how many servings in a pack or how many grams in a pack?
- Create your best context – What numbers show your brand in the best light? Are you the cheapest, heaviest, least fattening, or something else? Find the number you want to anchor shoppers to and then shout it, shout it loud.
- Make your best value obvious - If your brand offers the best value, make sure to present the numbers (price, cost per litre, etc.) in a way that make cross brand comparisons easy.
In summary, anchoring gives you a great way of making your brand look disproportionately appealing. But equally, the wrong anchor can seriously damage brand performance. So, find your best numbers and communicate them effectively.