Landing page tip: How to use the anchoring effect to increase conversions
A 5-min read on how to increase conversions to your landing page using the anchoring effect.
Hey friends,
Welcome to Issue #16 of Market Curve - a weekly newsletter exploring the intersection of marketing with consumer psychology and behavioral economics. Through Market Curve, I hope to offer marketers and founders a different perspective on how to better understand their customers - one that is rooted in science.
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Today on Market Curve, we talk about the Anchoring Effect - a simple tool which when used right can yield great benefits. By the end of this essay, you’ll learn:
What is the anchoring effect.
How to use it in your own landing page copy.
How to get inspired by watching 4 real landing page examples.
All in less than 5 minutes!
Let’s dive in, shall we?
Have you noticed how car salesmen quote a higher asking price than normal when you first interact with them? And they end up lower the asking price a bit because you’re an “old customer” or they're "giving you a sweet deal"?
And you take it because you thought you got a good deal?
It’s a classic sales tactic used by salesmen to get you to pay more than the actual market price. And in order to execute it, they like to use something known as an anchor.
In essence, an anchor is a piece of information you receive, like a price tag for example. It could be a $20 jar or a $27,456 boat.
Without you even realising it, this number is etched into your subconscious and your bias kicks in. What you will do is you will judge any number or piece of information that comes next relative to the anchor.
All of this happens in a matter of milliseconds. Nobel prize winning economist Daniel Kahnemann called it the anchoring effect.
It’s a pretty powerful bias, wouldn’t you say? You can use it to alter the perceived value of any product or service and people will adjust towards the anchor.
Let's see how you can use the anchor effect in your landing page.
Display a higher pricing first followed by your best value pricing.
In the anchoring effect, the customer will always use the first piece of information as an anchor. Seeing a higher priced service or product in the first instance will create the perception that the subsequent pricing is much cheaper. Your best value pricing will attract the most traffic as a result.
Here’s Unbouce showing us how to do it:
Use large numbers as an anchor.
Your pricing page is where your visitors become customers. Just before the pricing block starts, use large numbers saying something like this: "500,000 + people are using our product". This large number will now act as an anchor agaiinst your subsequent pricing numbers. As a result, your pricing numbers, though large, will appear smaller in context.
See how Privy does it here.
Highlight the call to actions on the paid plans
By making the CTA bolder on your paid plans, you draw attention to them right away. If you put equal emphasis on your free plan as well, you put it on the same footing as your paid plans. This decreases the effect of the anchor. By highlighting the paid plans, you prompt your user to notice the paid plans and compare what they'd be gaining from signing up on the paid plan.
Here’s Amplitude showing us how to do it:
Show the daily, weekly or per user cost as opposed to monthly cost.
This is a nifty way to lower your customer's perception of the cost they're incurring. Displaying the per user or daily cost leads to a much smaller anchor price. When the customer visits your competitor's landing page and sees a monthly price, he/she will perceive as the price being higher compared to yours, even though the price is the same.
Here’s Atlassian doing (fairly) a good job of this. I’m certain you can do one better.
The anchoring effect is an extremely powerful tool which can have disproportionate returns on your conversion rates. It’s definitely worth experimenting.
This Wikipedia article is a great starting point if you want to learn more about the anchoring effect.
Thank you so much for reading! If you want to get in touch, you can respond directly to this email or reach out on Twitter or LinkedIn. Always excited to meet like-minded people!
Until next week!
— Shounak.