Price Anchoring: 8 Examples and How to Set an Anchor That Builds Trust
Short answer
Price anchoring is when the first price someone sees becomes a reference point for judging the next one. If a buyer sees a premium plan at 2,000 first, a plan at 800 feels reasonable. The effect was shown by Amos Tversky and Daniel Kahneman in 1974 and works because people struggle to judge value without a comparison.
Key takeaways
- ✓People judge prices relative to the first number they see.
- ✓Even unrelated numbers can influence how much people are willing to pay.
- ✓Strong anchors include premium plans, original prices and the cost of the problem.
- ✓Fake anchors damage trust, so every reference price should be real.
Why does anchoring work?
Most people do not know what something should cost. So they look for a reference point and adjust from there, usually not enough. In one study by Dan Ariely, George Loewenstein and Drazen Prelec, people who wrote down the last two digits of their social security number before bidding on products bid more when those digits were higher. A random number shaped what they were willing to pay.
8 examples of price anchoring
- Original price crossed out. The old price anchors the sale price, which works only if the old price was genuine.
- Premium plan shown first. Listing the most expensive plan first makes the others feel affordable.
- Cost of the problem. "Missed leads cost the average clinic thousands a month" anchors a service fee against a bigger number.
- Luxury flagship products. A very expensive item in a store makes other items feel accessible.
- Value stacking. Listing the value of each part of an offer, then the lower combined price.
- Starting high in negotiation. The first offer in a negotiation sets the range for the rest of the conversation.
- Competitor comparison. Showing a higher-priced alternative next to your product.
- Bulk pricing. Showing the per-unit price of a single item next to the lower per-unit price of a multipack.
How do you anchor honestly?
| Honest anchor | Misleading anchor |
|---|---|
| A genuine previous price | A "was" price that was never charged |
| A real premium option people can buy | A fake option that does not exist |
| The documented cost of the problem | An exaggerated or invented cost |
| A fair comparison with alternatives | A comparison with an unusually expensive outlier |
Shoppers compare prices across sites and remember past prices. A fake anchor might lift one sale, but it costs you trust with every customer who notices.
Related reading: decoy pricing examples and how to raise prices without losing customers.
Frequently asked questions
What is an example of price anchoring?+
Showing a product's original price crossed out next to the sale price is the most common example. Showing a premium plan first on a pricing page is another.
Does anchoring work for services?+
Yes. Comparing your fee with the cost of the problem you solve, such as lost sales or wasted ad spend, is a powerful anchor for services.
Can anchoring backfire?+
Yes, if the anchor feels fake or unrealistic. Buyers who feel tricked trust the brand less and are less likely to return.
Sources
- Tversky, A., and Kahneman, D. (1974). Judgment under Uncertainty: Heuristics and Biases. Science, 185(4157).
- Ariely, D., Loewenstein, G., and Prelec, D. (2003). Coherent Arbitrariness: Stable Demand Curves Without Stable Preferences. Quarterly Journal of Economics, 118(1).
Team Husbar
Husbar Editorial
Team Husbar is the strategy, psychology and research team at Husbar, a psychology-led growth agency headquartered in Dubai. Together we have worked with 100+ brands over 10+ years.
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