Our Anchoring Bias Creates an Expectation That Can Be Used to Make A High Price or Time Frame Seem Reasonable Even When It Is Not. Simply by Initially Thinking of Higher Numbers, All Future Numbers Will Be Skewed Up and By the Anchoring Effect.
This week’s top stories include small business advice covering the following four topics:
- Why Hiring a Chief-of-Staff Could Be a Game-Changer for Your Startup
- Marketers, Is There Ad Fraud In Your Future?
- Why Ending Your Price in An Odd Number Will Increase Your Sales
- 5 Predictions for America's Small Businesses in the Biden Era
Each week we scour all the top business-related magazines and newspapers for articles with the best advice for the small business owner, so you do not have to.
Your Pricing Strategy Doesn’t Have to Be an Entirely Emotional or By-The-Numbers Exercise. The Most Important Thing Is to Offer Quality Products/Services and Ensure That Customers Perceive That Doing Business with You Is on The Right Side of the “Risk Vs. Reward” Equation.
As consumers, we have a very hard time recognizing a business’s investment in expensive and specialized tools, or paying for a person’s knowledge or acquired skills. All they see is that they are paying a lot for something that didn't seem too difficult for a person or business to deliver.
The traditional view of marketing captured by the 5P's comes from the perspective of a business looking at its prospects. However, a fascinating new concept known as the 4A’s reverses the viewpoint to consider how the perspective view of the business.
In a perfect world, what a customer spends for something should be based on their opportunity costs. However, customers are irrational when it comes to money. By distorting a customer perception of their opportunity cost, a savvy business can make the customer spend more and be happy to do it.