How to establish a reasonable price in your customer’s mind.
Anchor points – those prices that we have stuck in our heads which give us a sense of whether or not something is a good value. Take coffee for instance. We all know that you can get a cup of coffee at McDonald’s for about $1 or you can get one at Starbucks for as much as $5, but what if I told you that some place was selling coffee for $30 a cup? That would hit you as abnormal because your mind has established anchor points for what’s a reasonable price for a cup of coffee.
How are anchor points set for your product or service? Do your customers see similar things advertised on the radio or in the newspaper? Have they heard from their friends what to expect for price? Or maybe they have no idea and you’re the one who will first set that anchor point in their mind. You’d better do it carefully because the number they first hear will be indelibly set in their mind.
If you say, “We sell copy machines that range between $5000 and $10,000 each” they’ll hear, “$5000” never ever processing the price range and will likely think that you’ve overcharged them when they get a bill for $9000. The human brain has a way of blocking out the higher price to avoid the pain that’s produced in the subconscious by the higher price. You just might have to set a higher anchor point initially and surprise them by coming in lower in order to prevent their brain from triggering pain and associating you with that pain. If you said, “Our copiers go as high as $10,000” you’ll help your customers to set a higher anchor point in their minds, thereby avoiding future pain (and eroding trust) when you show them lower-priced models.