Pricing psychology & negotiation · strategy atlas
Anchoring effect
what it means
The first number a customer sees becomes the reference point every later number is judged against — showing a higher price first makes a subsequent price feel like a relative bargain, even if it's still expensive in absolute terms.
a real example
Retailers routinely display a crossed-out 'original price' next to a sale price — the crossed-out number's real job is setting the anchor, not describing what anyone actually paid before.
when to use it
Whenever a customer has no independent way to judge whether a price is fair — showing a credible higher reference point first shapes their sense of value before they've formed one themselves.
when it backfires
An anchor that's obviously inflated or fake (a 'discount' off a price nobody ever paid) damages trust once customers notice, which is increasingly easy to check online.
put it into practice