Pricing Strategies – Part 2
Part 2 of our series on Pricing Strategies looks at how to direct your customer’s focus where you want it.
Anchor Pricing
When a Customer looks at a list of options for your product or service, they will tend to compare prices and use the highest priced offering as a guide.
A successful marketing technique is to create a very highly priced premium offering and make it the first thing the customer views, so it acts as an anchor for them to use when looking at your other offerings.
You aren’t trying to discourage a customer from purchasing your highest offering, a percentage of customers will do that anyway, just because it’s the most expensive, therefore it’s perceived as the best. Your strategy is to use this highly priced anchor to throw a halo effect over your lower priced options. Package your lower priced offerings in a way that makes them look like exceptionally good value compared to the anchor.
You cannot be deceptive, the anchor pricing option must be a valid product or service and you must be able to articulate to your customer what is being offered.
Example Offer from a Car Detailer
Service 1: Exclusive car indulgence $350
Service 2: Squeaky-clean in and out $160
Service 3: Quick and easy clean $90
The bottom two options seem much more appealing to the target market than the anchor price which is priced more than twice as high as the next option. Up to a point, a larger gap can produce better results.
Now take some time to brainstorm how you might be able to use this technique to direct your customer’s focus where you want it. How can you change the way your present your offerings to incorporate this simple but very effective technique.
3 simple and effective pricing strategies