Mysolutionspot’s Weblog

While reading this article earlier today, I started reflecting on my own experience with “anchors” and their power of persuasion. In the short time I’ve owned my home (a little over a year), I’ve had a fence put up around my back yard and new windows installed throughout the house. For each project, I had multiple companies give me price estimates. I gave the same “this is what I want” spiel to each company, and each installer used the same measurements. Some of the companies used the same products—exact same windows, exact same fence parts—yet there was a huge difference between the highest estimate and the lowest. In the end, for both the windows and the fence, I decided to go with one of the companies in the middle of the pricing spectrum.

I bypassed the company that gave the highest estimate (for obvious reasons), and even though I wanted to save money, I skipped over the company with the lowest offer. Why? The anchor got to me. With the mid-priced estimates, I felt like I would be getting a better deal than if I went with the high-priced installers.  Regarding the companies that offered lower prices, I was concerned that they wouldn’t do as good of a job as the others, or they wouldn’t be able to offer continued care should I need it. The mid-priced estimates proved to be the anchor by which I judged the rest of the estimates.

Mental anchors do exist, as Damon Gudaitis notes in the above article, and small businesses need to be aware of this. Check out Gudaitis’ article, and then take a look at your business: Are your prices too high, causing customers to feel as if they’d be paying too much? Or are they too low, giving your business a vibe of “low price, low quality”? By becoming aware of your anchor, you can readjust it so that it better reflects your business and the quality of its offerings.