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Anchoring

Anchoring (also known as the primacy effect) is simply the effect that dictates that a person will use the first impression of something as the filter for every subsequent interaction.

Underlying Psychology/Biases

Sub-Techniques

  • Anchoring itself can be used as tool to make yourself look better or change your positioning
    • You anchor the person with the initial impression you want to cause;
    • Do you have a medium-tier product that you want to make seem a premium one?
      • Simply throw out a big price in the beginning, so the person is anchored to the big price;
      • Even if you later lower it, it will still seem a premium product;
    • In fact, a very useful technique is the anchored ramp-down
      • You start with the ideal conditions, test them, and if the person doesn’t accept them, just lower them;
      • Many consultants do that. “My price is 3k per month”. Actually, it’s whatever the client wants to pay;
        • But they first throw out the 3k. Some clients accept it, some will lower them to half, some will lower them even more;
        • But all of them will still have the impression they’re dealing with a 3k/month consultant;
      • In short, it allows you to define the initial impression you want to cause, regardless of what you end up changing (or charging!);
  • In specific, negative anchoring can be used to provoke objections by using extreme versions of parts of the offering to test the person.
    • Saying something such as “This will be very expensive”, or, “This will take a lot of effort”;
    • On top of it, this technique is also useful because, sometimes, the person will accept this extreme version of a term, and you don’t need to go back;
    • You should use negative anchoring not with all the possible terms, but the most important ones to you
      • If the most important term is price, anchor the person on price;
      • If you use all terms, it may sound overwhelming. “This will cost a lot, and it will be a lot of effort, and there’s no guarantees, and you have to obey my authority all the way, and [ABC]”. Whoa;
    • You can also anchor multiple things at the same time to condition the terms – bundling.
      • “If you accept this position, you will be not only expected to produce results, but also report to this person. Are you still in?”;
      • “If you become a client, you need to realize that not only does this have a very high cost, but I also require 3 testimonials. You have to accept both. Are you still in?”;

Examples

  • Anchoring for positioning/first impressions
    • A bug, not a feature
      • Very used in the tech world, especially for startups. Any problem can be converted into a feature;
      • Overheating becomes a device that is a warmer as well. No Wi-Fi makes the device a “distraction-free” one;
    • “What do you prefer?”
      • A very good question to wrap up perceived contrast;
      • List the negatives of the other side and the positives of yours, and simply ask, “What do you prefer?”;
      • “This candidate is known for having bad reviews, has no proof or support. My candidate has a lot of testimonials and past performance. John, which do you prefer for this opening?”;
    • “Vision or no vision?”
      • An example of using perceived contrast for a Passionate;
      • “John, [ABC] will not respect your vision or let you be an inspiration. On the other hand, we will focus on making you a reference, getting you results so you can celebrate. Which do you prefer?”;
    • Attitudinal contrast
      • When you have two people in a negotiation or persuasion situation, it’s not uncommon for one of them to seem bad so the other can seem kinder. The “good cop, bad cop scenario”;
      • Very used in sales and Customer Success. CS is the trusted advisor that is honest and kind, while sales is the “bad guy” that just charges, period;
    • Different seats
      • The anchoring effect is so powerful it can last for years. Personal story;
      • I would visit my father at work, where he and a coworker would have assigned seats;
      • Unknowingly, that day they had switched seats. So what I considered “normal” was actually a different situation;
      • Every time I would visit my father at work, although I knew logically that the different seat disposition was the “normal” one, it never really sat well with me. Even after years. That’s how powerful anchoring is;
  • Negative/extreme anchoring
    • “I need you to respect [ABC]”
      • When the person is eager to buy or sign a contract, but respect is more important than the money, the expert may anchor them on that as well;
      • “If you sign this contract, I need you to realize that you need to listen to me and respect my authority at all times, more importantly than the payment. Is this OK?”;
    • “This won’t be easy”
      • When someone is pitching something, but they don’t want you to underestimate it, they may tell you this;
      • “Just to make sure before we begin, this won’t be easy. Are you still in?”;
    • “Salary, team, terms”
      • Telling your boss, or a hiring manager, “I will only accept this position if I have [ABC] salary, if I can pick my team, and other terms. Are you still interested?”;

Commercial/Known Uses

Key Takeaways

  • Anchoring is nothing more than defining the first impression you make, which becomes the filter through which the person sees everything after;
    • You can use an anchored rampdown, where you cause the initial first impression that you want, and then, even if the person asks you to change some terms, they will still have the initial anchor in their mind;
  • Negative anchoring
    • Negative anchoring is nothing more than throwing out extreme versions of price, effort, or others in order for the person to accept the worst-case scenario (or if they don’t accept it, you can slowly come back – the anchoring ramp-down);
    • The best part about negative anchors is that, despite the fact you’re willing to come back from the extreme terms, sometimes a person will accept the extreme, and in that case, you don’t need to go back;