Several years ago, I convinced my husband to move the television out of the bedroom. The problem was he liked to go to bed late, and I liked to go early. So, the pattern that was established was that both of us went to bed around ten, but then he watched until midnight while I slept. This could be a perfectly good arrangement, except at the time, he liked to watch the Jerry Spring Show starting at 11:00 PM. Virtually every other word was beeped out, which created restless sleep for me. So, I convinced him to relocate the television out of the bedroom.
But recently, I have begun missing the television. I miss listening to the news in the morning when getting ready. During the infancy of this idea, I stopped at a big box store and decided to look at the televisions. That week, they had an amazing deal on a 32-inch Samsung for $279.00. I considered purchasing it but decided that enough research had not been completed for me to spend that money. After completing the research, I found that the deal at the first store was great and went back to purchase… but that deal was no longer available. In fact, the same television was significantly more.
Determined to find that deal at another vendor, I have spent months looking through sale flyers in search of the same deal. To be honest, I have seen some great deals, but not as good as the original one. This obsession has been going on for months now, with no television purchased and hours wasted looking. Why not buy using one of those other deals?
Well, it’s what psychologists call anchoring.
Anchoring is when we consider buying something at a particular price, and once we do, that price is now established in our mind as THE price. It’s similar to zebras (I know an odd transition) because when they are born, the pattern of their mother’s stripes is imprinted in their brains, and they follow her everywhere. Once a price gets imprinted on our brains, we judge everything by that price.
As salespeople, why do we need to know this? Many salespeople encounter prospects that have a price imprinted on their brains. Real estate agents often see this problem with both buyers and sellers. Sellers often decide a value on their house based on either an appraisal, another agent’s opinion, an online estimator, etc. Very often, conditions have changed, and they are unwilling to consider a different price because they have anchored a higher price.
Secondly, a seller may have a commission fee anchored in their mind and will not entertain a higher commission fee even when the end result is better.
Buyers, particularly those moving from one area of the country to another, have a predisposed number in their head about what a house costs. When coming from a more expensive area to a less expensive area, they tend to still buy a house at the same price as the previous area. Those doing the opposite struggle with higher prices in the new area and are not satisfied with their options.
So what do you do about it? This is a very difficult question because they do not give up the anchoring easily. The answer is two-fold: patience and uniqueness. Buyers suffering from sticker shock often have to be allowed an education process to create a new anchor.
Sellers, on the other hand, require a difference to be established. For example, with commission, they must understand what they get for the additional money and why it’s better (i.e., more net in their pocket). In my case of the television, if a salesperson can establish why the higher-priced television is better and provide me with a better deal and experience, I would drop the anchor and buy the more expensive one.
So the question of the week is, “Can you tell a client why your service/product is better than your competitors and why yours is worth more?” Think about it.