anchoring bias

 Do your consumers know how much your services or products cost?

When people are trying to make a decision, they often use an anchor or focal point as a reference or starting point.  Sometimes their comparisons are apples to oranges.

Psychologists have found that people have a tendency to rely too heavily on the very first piece of information they learn, which can have a serious impact on the decision they end up making.1 In psychology, this type of cognitive bias is known as the anchoring bias or anchoring effect.

here's an example:

If you wanted to purchase a Neuromarketing program and you read online that the average program sells for $25,000, depending on the length of the program and personal consulting. 

Next, you find a qualified expert that you connect with, on an emotional level, that offers a similar program for only $15,000, which you quickly accept – after all, it’s $10,000 less than what you were expecting to pay. 

Soon after, you receive an ad from another person selling Neuromarketing services for $10,000, which is another $5,000 less than what you paid, based on the average pricing your found online.

You might have buyers remorse and be really upset at yourself for marking such a hasty decision and not shopping around for a better deal. The question is: “why did you jump on the first offer so quickly?”

 

The Anchoring Bias Proves That We Favor The 

First Bit Of Information We Learn

Since your initial research indicated that $25,000 was the average price, the first offer you encountered seemed like a great deal. You overlooked additional information, such as the possibility of other Neuromarketing programs being offered at lower pricing, and made a fast decision on the information you already had, which served as an Anchor Point in your mind.

The Anchoring Bias Affects More Than Money

The anchoring affect has a great impact on many aspects of our businesses, beyond purchasing decisions. For example:

1. How long should it take for your consumer to achieve results?  -if your client decides that your program should give them results in “X” amount of time and you don’t deliver in that period of time, they feel cheated. This bias affects their results at an unconscious level.

2. How long does your product last? - If your customer decides that they should be able to use your product for “X” amount of months or years, and your product doesn’t last that long, they will deliver negative reviews, based on their misperception of use

3. What are your qualifications?   -Consumers are very savvy, nowadays. They do their research and know when they are working with experts or not.

If they believe that in order to teach Neuromarketing, the person needs have at least a Master’s degree or Ph.D. in Neuroscience and needs to be a professional marketer, and the person isn’t, they most likely won’t believe what the person is telling them. 

However, you don't need an M.S., MBA, PH.D. or ABC behind your name to be an expert in other things. You just need to show people that you are a few steps ahead of where they want to be.

This is why social proof and presenting yourself as an expert in your field is critical to your business success.

From making decisions, to knowing which consultant to work with, or how long it should take to receive results from a program, the Anchoring Effect has a huge impact on our lives and the choices we make.

1. How are Price Anchors Set?   - Consumers are very savvy and know the average price of products of services they are looking for. Therefore, anchor bias affects price decisions. Some of these anchors may be based on past experiences and others are from researched costs or what their friends or family have paid.

 

When presented with a price, the brain quickly runs through a comparison of anchored prices.  Often this anchor is based on a quick guess which is not correct. 

2. Can Neuromarketing Help Reset These Price Anchors?  - Since our brains a little lazy, they only store bits or information that are relevant to us at that very moment. 

Therefore, anchor prices aren’t etched into stone (most of the time) giving the brain the chance to “reset” and reboot it’s anchor. 

Often, the values that are set in our brains are incorrect, so new information becomes our new anchor. “People can expect to pay $15,000 or more for Neuromarketing services.” The new anchor becomes $15,000. 

3. Your Brain’s Always Looking For A Good Deal   -  The quickest way to get someone to make a fast decision is by giving them a lower price then they expected to pay. When J.C. Penny’s stated that they offer low pricing, without coupons, their sales decreased exponentially. 

People need coupons and sales to recognize a good deal.

When you don’t understand how biases affect the brain, your marketing efforts and business choices can cost you a lot of money, by losing sales and customers/clients.

4. You Can Trigger Quick Buying Decisions With Anchors   - Since the brain is always looking for the best deal possible, if you offer a price that is lower than the anchor, the perceived value will increase. If there isn’t an anchor in place, like for Neuromarketing services, you can put on in place, as we have already done for you.

“Instead of paying $15,000 for our services, if you act, today, you will save $6000. For only three payment of 3K, you will have complete access to our online program. But this offer is only valid if you sign up, today.”

It's important to create new anchors and show the complete value of what you are offering your clients, prior to letting them know how much your services cost.

 Do your consumers know how much your services or products cost?

When people are trying to make a decision, they often use an anchor or focal point as a reference or starting point. Sometimes their comparisons are apples to oranges.

Psychologists have found that people have a tendency to rely too heavily on the very first piece of information they learn, which can have a serious impact on the decision they end up making.

In psychology, this type of cognitive bias is known as the anchoring bias or anchoring effect.

here's an example:

If you wanted to purchase a Neuromarketing program and you read online that the average program sells for $25,000, depending on the length of the program and personal consulting. 

Next, you find a qualified expert that you connect with, on an emotional level, that offers a similar program for only $15,000, which you quickly accept – 

after all, it’s $10,000 less than what you were expecting to pay. 

Soon after, you receive an ad from another person selling Neuromarketing services for $10,000, which is another $5,000 less than what you paid, based on the average pricing your found online.

You might have buyers remorse and be really upset at yourself for marking such a hasty decision and not shopping around for a better deal. 

The question is: “why did you jump on the first offer so quickly?”

   

The Anchoring Bias Proves 

That We Favor The First Bit Of Information We Learn

Since your initial research indicated that $25,000 was the average price, the first offer you encountered seemed like a great deal. 

You overlooked additional information, such as the possibility of other Neuromarketing programs being offered at lower pricing, and made a fast decision on the information you already had, which served as an Anchor Point in your mind.

   

The Anchoring Bias Affects 

More Than Money

The anchoring affect has a great impact on many aspects of our businesses, beyond purchasing decisions. For example:.

   

2. How long does your product last? - If your customer decides that they should be able to use your product for “X” amount of months or years, and your product doesn’t last that long, they will deliver negative reviews, based on their misperception of use

3. What are your qualifications?   -Consumers are very savvy, nowadays. They do their research and know when they are working with experts or not.

If they believe that in order to teach Neuromarketing, the person needs have at least a Master’s degree or Ph.D. in Neuroscience and needs to be a professional marketer, and the person isn’t, they most likely won’t believe what the person is telling them. 

However, you don't need an M.S., MBA, PH.D. or ABC behind your name to be an expert in other things. You just need to show people that you are a few steps ahead of where they want to be.

This is why social proof and presenting yourself as an expert in your field is critical to your business success.

From making decisions, to knowing which consultant to work with, or how long it should take to receive results from a program, the anchoring effect has a huge impact on our lives and the choices we make.

   

1.How Are Price Anchors Set?  -Consumers are very savvy and know the average price of products of services they are looking for. Therefore, anchor bias affects price decisions. Some of these anchors may be based on past experiences and others are from researched costs or what their friends or family have paid. 

When presented with a price, the brain quickly runs through a comparison of anchored prices.

Often this anchor is based on a quick guess which is not correct.

3. Your Brain’s Always Looking For A Good Deal – The quickest way to get someone to make a fast decision is by giving them a lower price then they expected to pay. When J.C. Penny’s stated that they offer low pricing, without coupons, their sales decreased exponentially.

 

People need coupons and sales to recognize a good deal.

When you don’t understand how biases affect the brain, your marketing efforts and business choices can cost you a lot of money, by losing sales and customers/clients.

Jodi & Jess - 

Founders of Neurolicity

People will be happy to jump on your bandwagon when you help them envision the virtual crowd that they will be hanging out with. As you grow your popularity, through crowd-sourced content, you will stimulate a tribe of followers who want to work with you and want to buy your products and services. Need some help?

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