Price Anchoring is one of the easiest and most effective pricing techniques to learn. The impact that price anchoring can make when having sales conversations can be almost instant. Here are some of the best tips for price anchoring that you can implement into your process today.
1) Say the price before you show it:
Always say a price verbally to someone before you quote or write a proposal, even if all you do is start with price guides. This allows you to have a conversation about price and when using the anchoring technique, the price conversation allows for negotiation. When a price is written down, it becomes formal and should be seen as final. Changing a formal price shows a prospect that they can manipulate you throughout the project.
2) Anchor high:
The effect of “anchoring” is lost when the anchor is not extreme enough, it also leaves the door open for the other party to counter anchor. So say a price that you know will sound high, the goal here is to deliberately create sticker shock and reset the prospect's expectation of price. So make the first figure you mention well past your intended offer.
3) Anchor with words:
Not all anchoring needs to be a dollar figure. In fact, some of the best anchoring is done through descriptive words. We use descriptive words to frame someone's expectation before we talk about price. This is best done early on in the conversation, by suggesting something might be “expensive”, that the work you do is “high quality”, that the results are “valuable” because you are “strategic”. This might sound scary but chances are you have had this happen to you where a prospect has suggested they have a “limited budget” - this is the same thing but in reverse.
4) Mention price first:
It’s often said and many believe that "Whoever Mentions A Number First, Loses" - but that is not the case with Anchoring. You only lose the price battle when you start with the figure you wanted and negotiations start to move you away. With price anchoring, the opposite is true, because we get to choose where that framing starts. Starting with an extreme anchor resets and then influences the rest of the conversation around price.
5) When in doubt use price ranges:
When you are new to price anchoring and lack the confidence or experience to know what price to use as an anchor, start with a range. The range can be wide and the range can suggest that the price is scope or value-dependent. It’s important to always use the highest price first, even though that sounds strange to say, but the first price someone hears is the one they will be attached to.
6) Use high to low anchoring:
This is useful for when you are putting prices options down on paper (such as formal quotes and proposals), the tip here is to always start with the highest price. Doing this means the HIGHEST price option is seen first, which becomes the anchor so that any price lower will seem affordable. If your price table starts at the lowest price, any price after will seem expensive.
Start to imagine how using these price anchoring tips in conversation would sound and start using them the next time someone inquires about a project. These tips are very easy to master, all you need to do is to make them a standard part of your process.