The Anchor heuristic: How first impressions influence purchasing decisions
The Anchor heuristic (also known as Anchor effect) is a cognitive distortionin which people base their decisions heavily on the first piece of information they receive (the so-called anchor). This first impression - be it a number, a statement or a visual representation - significantly influences our perception and subsequent judgements. Interestingly, this often happens unconsciously and regardless of whether the anchor is actually relevant.
The concept was developed by the famous psychologists Amos Tversky and Daniel Kahneman researched. Their studies show that people are influenced by an anchor even if it appears random or unrealistic. This means that even an arbitrarily chosen anchor can significantly distort our assessment of the value, price or significance of a product or service.
How does the anchor effect work?
The mechanism behind the Anchor heuristic is comparatively simple: as soon as our brain receives an initial number, concept or piece of information, it serves as a mental starting point. We then adapt our judgements to it - but often only inadequately. As a result, our judgements and decisions remain strongly influenced by the original anchor.
Simple examples of the anchor effect:
- Pricing: When customers initially buy an expensive watch for 1,500 Euro and then a for 450 Eurothe second watch appears to be a real bargain. However, if a customer first sees a watch for 50 Euro and then one for 450 Eurohe finds the latter expensive.
- Salary negotiations: Whoever first receives a salary offer from 80,000 euros puts a high anchor on the table, whereby an offer of 70,000 euros appears comparatively low.
- Discount campaigns: An advert with "Instead of **199 euros - now only 79 euros!" uses the original price as an anchor, making the reduced price appear more attractive.
The crucial thing is that even if we rationally try to ignore the anchor, it remains unconsciously present in our judgements.
Application of the anchor heuristic in marketing
The Anchor effect is one of the most effective techniques in modern marketing. Companies use targeted anchors to steer the perception of products, services and prices in a desired direction. Here are some of the most important methods:
1. pricing and discounts
Pricing strategies are one of the most common areas of application for the Anchor heuristic. Customers do not evaluate a price in absolute terms, but always relative to other prices they have seen before. Retailers use this specifically to make products appear more expensive or cheaper.
- Show comparative prices:
- "Instead of 199 Euro only 99 Euro!" - Here the original price is set as the reference value, which makes the reduced price appear particularly attractive.
- Online shops often show crossed-out prices next to current offers to give customers a sense of value.
- Premium products as price anchors:
- A shop could deliberately display an extremely expensive product in order to make other products appear cheaper.
- Example: A television retailer first presents a high-end model for 5,000 eurosbefore he developed the actual sales model for 1,500 Euro shows - that feels like a bargain afterwards.
2. Upselling and premium offers
Many companies deliberately use more expensive alternatives to make the cheaper models appear more attractive. This strategy is also known as Decoy effect.
- Restaurants and menus:
- High-priced dishes are deliberately placed at the top of the menu. Customers unconsciously compare with this anchor and perceive other dishes as "good value".
- Drinks in different sizes: A small beer for 4,50 €a medium one for 5,50 € and a large one for 6,00 €. The medium size appears to be the best value for money due to the higher anchor (large beer).
- Software pricing models:
- Basic version: 9.99 € per month
- Standard version: 19.99 € per month
- Premium version: 49.99 € per month
- Customers often tend towards the middle price, as the highest option is deliberately presented as overpriced.
3. time-limited offers and artificial scarcity
The anchor does not always have to be a price. Time pressure and availability are equally strong anchors:
- "Only 3 pieces available!" → The anchor for scarcity ensures quick purchasing decisions.
- "Offer valid today only!" → The time anchor increases the pressure to act immediately.
- "More than 10,000 customers use this product!" → A social anchor for popularity and trustworthiness.
4. psychological pricing
Numbers have an enormous influence on purchasing decisions, even if the difference seems minimal:
- Charm pricing (99 prices): A product for 29,99 € instead of 30 € appears significantly cheaper, although the difference is only 1 cent.
- High anchor values in adverts: A car manufacturer could first develop a model for 120.000 € before it can show a mid-range model for 45.000 € presented - making the second car appear more fairly priced.
5 The role of numbers and comparisons
The way in which figures are presented can have a massive influence on purchasing decisions:
- A fitness studio could use "Spare 500 € per year" instead of "Only 9.99 € per month". The larger number acts as a stronger anchor.
- A luxury car is first labelled "Only 2.5 % Interest on financing" to make the total price appear less relevant.
Why does the anchor heuristic work so well?
The Anchor heuristic works because our brain works efficiently, but not always rationally. We rely on mental shortcuts instead of painstakingly analysing every decision.
Psychological mechanisms behind it:
- Cognitive lightness: Anchors give us a quick orientation.
- Priming-effect: The anchor prepares our thinking in a certain direction.
- Loss aversion: If an anchor is high, a discount appears as "loss avoidance".
- Social norms: People orientate themselves to supposed standards.
Conclusion: The power of the first impression
The Anchor heuristic is one of the most powerful psychological principles in marketing. Whether pricing, upselling or artificial scarcity - if you set the right anchor, you can influence purchasing decisions in a targeted manner. The best thing about it? Most customers don't even realise that they have been influenced.
It is therefore crucial for companies to use anchors strategically in order to maximise sales and Customer loyalty to maximise the value. If you understand the anchor heuristic, you can subtly guide the decision-making process and be successful in the long term.