The same approach can be used to communicate initial product value

Brand & Marketing

The same approach can be used to communicate initial product value. Steve Jobs used anchoring during the launch of the Apple iPad to such effect. At one of his famous launch presentations, he introduced the “rumoured cost” that was speculated to be $999. This information anchored the press to the notion that this would be the high-priced product. However, when Jobs later in the event revealed the iPad to be priced at $499, this “anchoring and reveal” tactic created a notion of value for money.

The genius of the $999 anchor is that nobody had to pay it. It only had to sit in the room long enough for $499 to look almost absurdly charitable.

Prices never arrive alone. Buyers compare them with a rumour, a rival, last year’s number, the cost of doing nothing or whatever appeared three seconds earlier. Pretending price is judged in isolation is economics conducted in a sensory-deprivation tank, with the buyer somehow left outside.

Retailers show the former price beside the sale price. Software firms compare a subscription with another employee. Estate agents know the first property can make the second feel enormous, pristine or suspiciously cheap. The anchor does not dictate the answer, but it chooses the ruler.

That makes anchoring useful and morally slippery. An invented list price that nobody ever pays is a fake bargain with a calculator. A credible comparison with the manual process, full ownership cost or realistic market range can genuinely clarify value. Before revealing the number, identify the comparison already occupying the buyer’s head. Replace it only if the new one is honest and more relevant. Manipulative anchors may win a transaction. Credible ones help the price survive the customer’s second thought.