This week I’d like to talk about the anchoring effect. This is one of the most reliable and best-replicated effects in all of psychology. It was first investigated, like many of the phenomena that we’ll look at in this series by Amos Tversky and Daniel Kahneman. What T&K did is to have people guess at certain numerical facts like the height of Mount Everest in feet, or the number of United Nations member countries that are in the continent of Africa. But before they made their guess, the participants had a spin on a wheel of fortune – like a roulette wheel – which generated a random number. Now, of course, the participants knew that the number that came off the wheel was completely random and could have nothing at all to do with the height of Everest or the number of African countries in the UN. But still it affected their judgements.
People who span small numbers gave lower guesses for the height of Everest or the number of African countries in the UN that people who span smaller numbers. Here’s another example. Have a guess at the answer to this sum:1x2x3x4x5x6x7x8. If you’re like most people, you probably guessed just over 500. The correct answer is more than 40,000. But because the sum started with low numbers, it anchored your guess to low numbers in general. If the sum is presented the other way around 8x7x6… – the average guess was much higher.
There are lots of different ways anchoring effects can be used in sales. For example, one study showed that a sign saying, “limit 12 per customer” led to people buying an average of 7 units (in this case, cans of soup), as opposed to an average of 3 without. Another study found that pricing something at 4 units for £2 did much better than pricing them at 50p each. The 4 acts like an anchor – you expect to pay around £4, so £2 feels cheaper.
More generally, the implication is that even irrelevant numbers on your site could be affecting visitors’ perceptions of, for example, whether your prices are high or low. The robustness and size of this effect means that you need to pay attention to every single number that is floating around on your website; no matter how irrelevant it may seem. For example, suppose your street address happens to be “3 London Rd”, and you display this somewhere on your site. This seemingly innocent decision risks anchoring customers’ frame of reference to the lower end, such that a £10 product feels expensive. Similarly, you should think very carefully before displaying an empty basket with the text £0.00, which anchors customers’ frame of reference as low as it can go, potentially making any price feel expensive.
Of course, you can also use anchoring effects to your advantage. Displaying an irrelevant number that gets customers thinking in the high hundreds (e.g., “753 sold this week”) could make a £100 product feel like a bargain. So, make sure any apparently irrelevant numerical anchors are pulling your visitors in the direction you want them to go. And if there aren’t any, think about adding some.