Problems with the 'from' price
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I recently spoke at the Bookkeepers Conference on pricing and a large part of that was about price anchoring. If you’re not sure what price anchoring is, let me explain using this famous optical illusion.
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[MM_Member_Decision membershipId='1|2|3|4'] I recently spoke at the Bookkeepers Conference on pricing and a large part of that was about price anchoring. If you’re not sure what price anchoring is, let me explain using this famous optical illusion.
Let me start by saying that both orange circles are the same size. If you don’t believe me, print it and measure them with a ruler. The orange circle surrounded by the large grey circles looks smaller than the orange circle surrounded by the small grey circles though. The same is true in pricing. If we were to sit a £1,000 watch next to a £10,000 watch we’d see it as cheaper than if it was next to a £10 watch.
I want to share with you a recent experience I had with price anchoring and a ‘from’ price. I recently went through a phase I go through about every 6 months. I decided that my home office was too small for me and wanted to look at other available space nearby. I often do this, and realise later that my home office actually best suits my needs.
I saw a website of a local serviced office building advertising offices from £45 per week. The photos looked amazing so I made the arrangements and went to see them. They were even nicer in real life, with large mahogany desks complete with green leather tops and large leather chairs. They had everything I wanted from the phone line to broadband and 24 hours access.
As I was shown round I was told that the smaller room (a one person room) was £65 per week and the larger (2 person room) was £85 per week. My heart dropped a little. They seemed expensive. Let me recap, they were ideal offices but the owner had anchored the price at £45 per week and then told me it was about 40% more expensive. The offices weren’t bad value, it was only that the owner had chosen to anchor low.
As I look around the world I see that a lot of people, including me, advertise products and services using from prices and I now begin to wonder if we’re missing a trick.
Discuss…. [/MM_Member_Decision]
This resource is only available to members. To read more, login or join now as a free member [/MM_Member_Decision]
[MM_Member_Decision membershipId='1|2|3|4'] I recently spoke at the Bookkeepers Conference on pricing and a large part of that was about price anchoring. If you’re not sure what price anchoring is, let me explain using this famous optical illusion.
Let me start by saying that both orange circles are the same size. If you don’t believe me, print it and measure them with a ruler. The orange circle surrounded by the large grey circles looks smaller than the orange circle surrounded by the small grey circles though. The same is true in pricing. If we were to sit a £1,000 watch next to a £10,000 watch we’d see it as cheaper than if it was next to a £10 watch.I want to share with you a recent experience I had with price anchoring and a ‘from’ price. I recently went through a phase I go through about every 6 months. I decided that my home office was too small for me and wanted to look at other available space nearby. I often do this, and realise later that my home office actually best suits my needs.
I saw a website of a local serviced office building advertising offices from £45 per week. The photos looked amazing so I made the arrangements and went to see them. They were even nicer in real life, with large mahogany desks complete with green leather tops and large leather chairs. They had everything I wanted from the phone line to broadband and 24 hours access.
As I was shown round I was told that the smaller room (a one person room) was £65 per week and the larger (2 person room) was £85 per week. My heart dropped a little. They seemed expensive. Let me recap, they were ideal offices but the owner had anchored the price at £45 per week and then told me it was about 40% more expensive. The offices weren’t bad value, it was only that the owner had chosen to anchor low.
As I look around the world I see that a lot of people, including me, advertise products and services using from prices and I now begin to wonder if we’re missing a trick.
Discuss…. [/MM_Member_Decision]
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