Price anchoring

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Price anchoring is often a business strategy where a company sets a value of a certain package or tier to make other deals they provide seem more attractive.

How it works

Often, price anchoring works by showing an initial price point or other more expensive plans which can often change the customers perceived value of what is currently being offered. things like a cut through price tag a discount or promotional offer. Values however don't need to change to make consumers feel like they are getting a better deal it is merely a comparison point to judge the value of other products or plans.

Why it is a problem

False discounts

Platforms who deal with offering goods or services may show an original price with the original discounted price being the original, this makes consumers feel like they are getting a better deal when when the slashed price "anchor" convinces the consumer of the perceived value of the said product or plan. some may even keep it this way often known as the "forever discount" where you will always be getting the "discounted" price.

Price restructuring

Usually with subscriptions, consumers may often find themselves on the end of the short stick when paying for the initial plan for it's value and a company decides to move the anchor while giving you the consumer a worse experience for a downgraded tier.

Competitor price fixing

Companies may use similar brokers or comparison metric services to tell them how to set prices by doing that they can show the consumer some other brand name competitors showing similar value or even better pricing convincing the consumer that you should buy from the company instead of looking for other competitors.

Examples

Some examples of Price anchoring include:

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