Have you ever wondered why setting a higher “original price” or imposing purchase limits can make a deal seem irresistible? This is the influence of anchoring bias, a psychological phenomenon that affects how we perceive value and make purchasing decisions. In this article, you’ll find out what anchoring bias is, how it operates in marketing, and some proven tactics to leverage it for better results.
Key Takeaways:
- Anchoring bias is a powerful psychological effect that shapes how consumers perceive value and make decisions.
- Marketers use anchoring tactics, like price comparisons, product tiers, and quantity limits, to influence purchasing choices and boost conversions.
- Understanding the mechanisms and factors behind anchoring bias helps businesses design more effective marketing strategies.
- Consumers can reduce the impact of anchoring bias by comparing options, questioning reference points, and taking time before making a purchase.
What is Anchoring Bias?
Anchoring bias occurs when we tend to rely too heavily on the first piece of information we encounter when making decisions or forming judgments. Whether we’re shopping for gadgets, deciding what to eat in a restaurant, or negotiating a salary, our perception can be heavily swayed by the initial number or fact we see, even if it’s completely arbitrary.
Anchoring in Behavioural Economics
In marketing, anchoring bias is like an invisible hand, gently steering consumers towards or away from a purchase. With people often overwhelmed by information and pressed for time, anchors provide a quick, seemingly logical reference point, helping (or sometimes misleading) us to make snap decisions.
Mechanisms Behind Anchoring Bias
Anchoring bias is rooted in a few psychological processes that lead people to put a lot of weight on initial impressions or reference points. Getting to grips with these core mechanisms can help explain why anchoring has such a strong influence in marketing and decision-making.
Anchor-and-Adjustment Heuristic
When we’re given an initial figure, people tend to cling to that starting point and only make small tweaks. Often, these tweaks aren’t enough, so our final judgment remains pretty close to where we began.
Selective Accessibility
When we see an anchor, our minds naturally start looking for information that supports or confirms it. This tends to make it more difficult to objectively consider alternative views or evidence that contradicts it.
Primacy Effect
The first piece of information or fact we come across tends to stay with us. This early insight often sets a baseline, influencing how we interpret everything that follows.
Attitude Change
An anchor can influence what we see as acceptable or normal. Once it’s established, it can even shift our attitudes, making options that once seemed unreasonable now appear perfectly acceptable.
Factors Influencing the Strength of Anchoring Bias
- Anchor value: Higher anchors = higher estimates and vice versa.
- Knowledge & expertise: Less familiar consumers are more susceptible; experts are less so, but not immune.
- Emotions & personality: Positive mood or open-mindedness can reduce anchoring; conscientious personalities may be more susceptible.
- Time pressure & uncertainty: Anchoring is strongest when decisions are rushed or consumers lack information.
- Credibility matters: Untrustworthy or blatantly false anchors can backfire and erode trust.
- Group settings: Anchoring bias is reduced when decisions are made collectively, as internal anchors compete and are questioned.
How Does Anchoring Bias Work in Marketing?
Anchoring bias influences how consumers see things far beyond just pricing. In marketing, the first message, feature, or comparison a customer comes across often becomes the benchmark that shapes all their later judgments. Whether it’s the order in which products are presented, the key benefits highlighted, or the first testimonial they see, these initial impressions create an anchor that subtly guides how they evaluate everything else.
Marketers often use this by carefully arranging content, emphasising certain product features, or showcasing compelling statistics early in the customer journey. As a result, anchoring bias can affect brand perception, how important a product’s features seem, and even the chances of engagement, often before the customer even realises a decision is being made. By understanding and managing these initial touchpoints, marketers can leave lasting impressions and better influence consumer behaviour throughout the decision-making process.
Examples of the Anchor Bias in Marketing
Anchoring bias isn’t just something big brands use; it’s a handy tool that businesses of all sizes can make use of. Here are five practical examples showing how marketers and shopkeepers might use anchoring to influence what consumers decide.
1. Restaurant Menu Engineering
A bistro lists a £50 premium steak at the top of its menu, followed by a £29 steak and a £22 chicken dish. Most diners don’t opt for the £50 steak, but its presence makes the £29 option feel like a reasonable treat, boosting its sales compared to when the £50 steak isn’t available.
2. Fitness Studio Memberships
A gym offers three membership levels: Basic at £49 a month, Standard at £69, and Premium at £120. Interestingly, by featuring the more expensive Premium plan at the top of the comparison chart, most customers tend to compare the Standard plan to it. This often results in a greater number of sign-ups for the mid-tier option.
3. Online Retail Bundles
An electronics retailer sells a laptop for £799 on its own, or as part of a bundle with accessories for £1,099. Even if most customers don’t need every accessory, the higher price of the bundle actually makes the standalone laptop seem more affordable, which can boost its appeal and increase the chances of a purchase.
4. Limited Edition Online Course Enrollment
An e-learning platform advertises a premium masterclass with just ‘100 seats available.” This sense of scarcity creates the impression that demand is high, encouraging visitors to sign up quickly, even if they were only browsing. The limited number of spots serves as both a psychological nudge and a prompt to act swiftly, helping to boost conversion rates.
5. SaaS Subscription Tiers
A project management software offers three subscription options: Starter at £12 a month, Pro at £29 a month, and Enterprise at £99 a month. The Enterprise plan is seldom purchased by small businesses, but its prominent placement makes the Pro plan seem much more appealing and feature-rich. As a result, most customers tend to upgrade to Pro rather than sticking with the cheapest option.
6. Online Design Tool Annual vs. Monthly Pricing
A popular online graphic design platform presents its pricing options in a way that feels quite convincing. The annual subscription is shown as £120 per year (equating to £10 a month), placed right next to the monthly plan at £16 per month. By making the monthly price seem higher, the annual plan appears as a great deal, encouraging more users to commit for the year upfront, even if they were initially unsure.
How to Use Anchoring Bias in Marketing
Marketers can employ a range of evidence-backed tactics to shape consumer perceptions, boost engagement, and drive conversions, all while maintaining trust and transparency. Here are some strategies to help you incorporate anchoring bias into your campaigns.
Price Anchoring and Discounts
One of the most effective ways marketers use anchoring bias is through price comparison. For example, showing a higher “original price” next to a discounted offer quickly creates a reference point, making the deal seem more appealing. Even if the original price was rarely actually offered, it acts as a mental anchor, boosting the perceived value of the discount and encouraging customers to act quickly. This tactic works particularly well in e-commerce, seasonal sales, and product launches.
Key points:
- Always display the original price clearly next to the sale price.
- Ensure any reference price used is truthful to build long-term brand trust.
Decoy Pricing and Tiered Pricing
Introducing multiple options for products or services allows marketers to tactically guide consumer choices through the use of anchoring.
Decoy Effect
By introducing a less appealing, pricier “decoy” option, you can make your main product or plan seem like the most sensible choice. For instance, The Economist’s well-known three-tier subscription model included a redundant print-only option, which made the print plus web bundle appear to be a much better deal. This classic tactic subtly nudges customers towards the option you most want to sell.
Want to dive deeper into the psychology behind the decoy effect and discover more real-world marketing examples?
👉 Read our full guide on the Decoy Effect and how to use it in your campaigns.
Tiered Pricing
Offering “basic”, “standard” and “premium” options plays on the anchoring bias by positioning the most expensive choice as a reference point. This makes the mid-range options feel more reasonable and appealing. Brands like Apple often use this tactic with storage or feature upgrades to encourage customers to upgrade.
Key points:
- Clearly differentiate features and benefits between tiers.
- Use visual hierarchy (such as highlighting the “best value” option) to guide customer focus.
Quantity Anchoring and Scarcity Tactics
Anchoring isn’t limited to price. It can also be used to influence purchase volume and urgency.
Purchase Limits
By capping the number of items a customer can purchase, for example, “Limit 12 per customer,” marketers create a sense of scarcity and also establish a mental benchmark for what’s considered a “normal” quantity.
Real-world examples support this approach: when Campbell’s Soup introduced a purchase limit sign, the average sales per customer more than doubled. Similarly, KFC’s “Just 4 packs per customer” campaign increased fry sales by 56%, demonstrating the power of quantity anchors.
Key points:
- Use limits to drive higher average order value and create urgency, especially during promotions.
- Pair quantity anchors with time-limited offers for an even stronger effect.
Curious how scarcity drives action and boosts conversions?
| How to Use Anchoring Bias in Marketing | ||
|---|---|---|
| Strategy | Description | Example |
| Price Anchoring | Show a higher original price next to a discounted price to make the offer more appealing. | Displaying “Was £100, Now £69” on a product. |
| Decoy Pricing | Add a less attractive, more expensive option to highlight the value of your main offer. | Three subscription plans with a “decoy” tier. |
| Tiered Pricing | Offer multiple pricing levels to make mid-tier options look more reasonable. | Basic, Pro, and Premium SaaS plans. |
| Quantity Limits (Scarcity) | Set a maximum purchase limit to anchor what’s considered a “normal” quantity and add urgency. | “Limit 10 per customer” in a promotion. |
How to Avoid Anchoring Bias
Anchoring bias can subtly influence your decisions when shopping, often without you realising. If you want to make smarter purchasing choices and steer clear of marketing tricks, it’s helpful to know how to spot and counter this psychological effect. Here are some practical steps you can take to minimise the impact of anchoring bias.
- Compare Multiple Options: Don’t settle for the first price, feature, or deal you see. Check different brands and sellers before making a decision, so a single reference point doesn’t anchor you.
- Question the Reference Price: Ask yourself whether the “original price” or discount is real and meaningful, or just a tactic to create a sense of urgency or value.
- Take Your Time: Anchoring bias is more substantial when you’re rushed. Whenever possible, avoid impulse buys. Take a step back and review your options before committing.
- Research Independently: Look for unbiased reviews, third-party comparisons, and honest customer feedback instead of relying solely on information presented by the seller.
- Set Your Budget: Decide what you’re willing to pay before you shop. This helps you anchor your choices based on your own needs, not just the numbers you see on the page.
- Discuss Big Purchases: When possible, talk with friends or family before making expensive decisions. A fresh perspective can help you recognise when an anchor is influencing you.
By keeping these strategies in mind, you’ll find it easier to avoid being influenced by anchoring bias and be more likely to make confident, value-oriented purchases.
| How to Avoid Anchoring Bias | |
|---|---|
| Tip | How It Helps Consumers Avoid Anchoring Bias |
| Compare Multiple Options | Prevents being influenced by the first price or offer seen. |
| Question Reference Prices | Identifies whether the “original price” is genuine or just a sales tactic. |
| Take Your Time | Reduces impulse decisions, allowing for more objective evaluation. |
| Research Independently | Offers unbiased perspectives beyond what the seller presents. |
| Set Your Budget | Ensures your decisions are based on personal needs, not external anchors. |
| Discuss with Others | Getting outside opinions can reveal potential bias or manipulation. |
Conclusion
Anchoring bias is a powerful influence in consumer psychology, often shaping how we view value and make decisions daily. For marketers, understanding and using this bias can lead to greater engagement and more sales; for consumers, being aware of anchoring strategies can help make smarter, more informed purchasing choices. By recognising how first impressions can affect decisions, both businesses and shoppers can approach the marketplace with more confidence and clarity.
FAQ
Anchoring bias is a psychological tendency where we tend to rely too heavily on the very first piece of information we encounter, such as an initial price, figure, or feature, when making decisions. In marketing, this often means that the very first price or product option someone sees can significantly shape their final choice.
Anchoring bias occurs because our brains tend to rely on mental shortcuts when processing information. We often use the first piece of information we come across as a reference point, or anchor, and then adjust our thinking from there, even if that initial piece isn’t particularly relevant or accurate. This approach can save us mental effort, but it can also lead to biased or skewed decisions.
The strength of anchoring bias can be affected by several factors, including:
– The credibility and relevance of the anchor
– The consumer’s knowledge and experience
– Time pressure or decision urgency
– Whether decisions are made individually or in groups
– The emotional state and personality of the individual
Marketers often use anchoring bias by setting reference points such as original prices, premium product tiers, or limited-time offers to influence how customers perceive value. These anchors can make mid-range products seem more affordable or create a sense of urgency through limited quantities and discounts.
To avoid anchoring bias, consumers should:
– Compare multiple options before deciding
– Question whether the reference price is genuine
– Avoid making quick decisions under pressure
– Do independent research and seek unbiased reviews
– Set their budgets and priorities before shopping
