How To Get Customers To Pay You MORE By Price Anchoring // Pricing your products or services is one of the most important things you can do. The psychology of sales and the psychology of marketing effect us very deep down, so understanding how to use the cognitive bias of your target is vital. This is where neuromarketing techniques become the linchpin to improve your sales. That’s why today’s video is going to show you the huge benefits of the price anchoring bias. A price anchor can be one of hundreds of excellent negotiation techniques that you can use in your pricing strategy because of its basis in behavioural economics. So in this video I’m going to show you what is pricing anchoring, how price anchoring works, how to price, and how anchoring economics is directly related to the psychological anchoring effect. So if you want negotiation training that provides negotiation tips on behavioral economics and anchoring in sales, then let’s get started!
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Russell Brunson: https://www.russellbrunson.com/hi
– What is it
— set a price expectation that’s high and then reveal a lower price
— This reduces resistance to purchasing
— Why? We respond better/worse in reference to other things
— In same way – reaction to price may change based on circumstances
— Basics of marketing
—- pricing is value we associate with prod/service
— no pricing expectation, then cost of $200 might be shocking
—- While expecting $4000 and hearing $400 equally shocking (but positive)
— So, w/ anchoring, we understand this human tendency and use it to our advantage
– How to use it
— Ppl pay at value level they see
— don’t see $300 worth of value, then less likely to buy
— So, 3-step approach
— Step 1 – show your value
—- your job here is to inundate the target with reasons your product/service is the best
— Step 2 – set the price expectation
—- while talking about value, let slip what stuff like this “normally” costs
—— Don’t have to be so coy about it.
——- Russell Brunson will show list of things he offers and their associated price/cost-based values
—- Should be doing what you can to get them to “expect” a certain price level.
— Step 3 – Shatter the price expectation
— Job here is simple – remove the barrier you just put in place.
— There’s really only one thing to do here: Tell them how much
— Last point – give specific numbers
— More specific numbers are more believable.
—- People will assume a more specific number is more scientifically-based
— Do NOT use numbers ending in .99 ($9.99, etc)
—- The 7s are far more effective at this point
– When to use it
— when you can provide context
— Context most important part
—– Can’t do it with a single sentence
— when you’re undercutting your competitors
— Have same/similar product? Pricing often best way to undercut competition
— In this case, context is less necessary.
– When not to use it
— brand dilution
— brand dilution occurs when others value your product/service LESS than you do
— if you price anchor too much, ppl no longer believe the higher price at all
—- How to avoid this? Question of follow-through.
—– Let’s say you’re selling a course on filmmaking and, along with the course, giving away a free tripod, color grading kit, and an add-on course.
—— You price all these out, and they, along with the main course, come out to $3000
——- Then you break anchor and offer then $1k
—— If they go back and want those things later, you HAVE to charge what you said you would
— Too early in sales process
— Don’t talk about price until it’s time to talk about price
—- Means wait until you’re halfway or later through process
—– Focus on benefits first. Price when they’re ready
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