Dirty Rotten Secret That Can Double Your Response

There have been several posts about anchoring recently and rightly so, because it's a powerful concept. This is all down to the fact that the human brain likes to work relative to a starting point and has difficulty coming up with a starting point if one isn't provided. Let me give an example -

If we go to a big concert that's absolutely full of people and I turn to you and say, "How many people do you think are here?" Your brain will reel at trying to estimate that, especially from within the crowd. But if I say to you, "Do you think there are about 500 people here?" Your brain will use that as the starting point and although you know there must be way more your estimate will be far lower than if I hadn't anchored you to the concept of there being 500 people there.

I know that ones works, that's how someone taught it to me

So what does that mean for pricing. Well, if you say something is worth $100 you anchor your prospects' minds to that price point. Some may buy, most will probably baulk at it (if it's really only a $10 price point item) but it makes their estimate of it's worth far higher than if you'd just let them draw their own conclusion.

When you combine that with a follow up email saying, "It's really only $10" and "I'm issuing lots of $90 refunds" that tells people that they are getting a bargain because the price is not only much lower than their anchor point but it's also got the social proof aspect, that if the marketer is issuing a lot of $90 refunds then he must have sold a lot at $100 which means a lot of other people thought it was worth $100 too.

I really believe this concept should be in any direct response 101 course as it's just that powerful.

I read in a copywriting book at one point about 2 old men who used a trick like this.

They sold men's suits and when a customer asked about a suit cost, he'd tell the customer he has to ask his partner.

He'd yell to his partner, "how much is this suit?" The partner would yell back "$400" loud and clear to make sure the customer heard him.

Then, the old man would pretend like he couldn't hear his partner. "I think he said $100. Sound like a fair price?"

The customer would jump at the offer thinking he got a great deal because the old man misheard the price. In reality, the suit always cost $100.

Gee, sales people are just real devious people, aren't they?

Great tip.. It sounds similar to the bargains at the supermarkets

This is actually a tactic I have used on my list once or twice. You are right the open rates and convertions are extremely good. If you make somone think they are going to have to pay a huge price for a premium product and then suddenly drop it you normally find they will buy buy buy!

Both of these sales 'tricks' are covered, along with lots more in the Robert Cialdini book "Influence: Science and Practice" 5th Ed that is quite cheap from the big A.com. It's a great and readable book on how we all fall (get persuaded) for such simple tricks. It's all the mind/brain! Recommended reading for any marketer.

I got my own experience in mishearing prices but with a different twist:

One of my offline clients thought I'm gonna make him an internet marketing
campaign including website dev't for only a one-time fee of $xxx.

He was so ecstatic and thought the price was cheap and I got the deal.
All the while I thought he understood me that he's gonna pay $xxx/mo (not a one-time fee).

We discussed and jump-started the campaign then came the billing day
and I said we need a 6-month post-dated checks to continue.
Then he was surprised and said that it never occurred to him
that it was a monthly fee.

At that point I didn't know what I do as I thought he understood
that it was monthly so I tried to explain that it was indeed a monthly fee.
A few moments later he issued the checks.

Not sure why he decided to continue, maybe it was because we've already jump-started
his campaign and he felt shy backing out because he didn't want to be stingy?

Watch this TED video:

http://www.ted.com/talks/dan_gilbert...happiness.html

The whole thing is good, but when it gets to about 8:00 it starts to reveal the psychology of pricing. I recommend this video to all of the marketers I mentor.

Check it out.

Joe Girard is noted as the World's Greatest Salesman because he sold more retail "big ticket" items "one-at-a-time" than any other sales-person in any retail industry including houses, boats, motor homes, insurance, automobiles, etc.

That record has still not been broken!

In his 13 Rules To Succeed list he does not talk about using psychological deception in any way.

As a matter of fact, number 9 states :

• TELL THE TRUTH
  If you get caught in a lie even once, you will always be a liar. Even if you tell the truth for the rest of your life, you won't be trusted or believed, consider yourself DEAD.

So not all successful sales people are deceptive, at least not the best.

Everybody lies. Those who say they don't are lying.

But I understand Joe Girard's point when it comes to deception and trustworthiness in the sales process.

Those ooops, and ouch emails I don't even read you want me to buy your product but here you are making big mistakes I am good.

Not sure if this has already been posted but here are a couple of excellent articles about the anchoring effect.

From the "You are not so smart" blog by David McRaney:
Anchoring Effect You Are Not So Smart

From mint.com blog by Matthew Amster-Burton:
Price Anchoring, Or Why a $499 iPad Seems Inexpensive | MintLife Blog | Personal Finance News & Advice

I see a couple of examples mentioned earlier are listed in these articles. Good reading.

For the "story" to be true the marketer would have had to not only made a pricing typo in his email, but he'd have had to make the same gaffe setting his shopping cart to be selling at the incorrect price. To me it's an obvious lie. I'd unsubscribe from his list and never buy a thing from him. Either that or he didn't know the price of his own product. I'm not buying that either.

Second point, if he's sold a gazillion of them and no one is complaining, I seriously doubt he'd issue refunds. I think he'd keep selling at the accidental price and rake it in, don't you? The tactic may have short term benefits, but I can't help but wonder for how long. To me, there's a big different between establishing anchors and just plain lying.

I second the Cialdini book, Influence. If you haven't read it yet, be sure you do soon. It's brilliant.

I'd attribute such a promo to the guy launching his offer at a too
high price and not selling any units at all.... he realizes his
error and tries to recoup his losses.

I've written letters for clients where we agreed on a price and
the client, enthusiastic about all the money they were hoping
to make, jacked the price way up (tripling it to $1500 in one
case), emailed their list... and didn't make any money.

If you monkey around with something as serious as peoples' money,
they take notice. Running a sale is a good thing - but playing
games with the price to a house list is asking for people
to start thinking you are full of it... a liar, a cheat.