A few years ago I was on Wikipedia when I noticed a banner at the top of the page stating: Wikipedia is there when you need it – now it needs you. I had been using Wikipedia for years and found it quite useful. It was a good source of preliminary information and I felt the donation was worthwhile and a good way to give back.
Had they just transformed their website with the ultimate move in conversion rate optimisation?
I went to grab my credit card, and as I walked to the other room, I thought about how much I wanted to donate. Considering I was a poor student who only worked enough to make ends meet, I really wasn’t in a position to donate much.
Plus, I already subscribed to a children’s charity. So, after going back and forth for a while, I eventually settled on what seemed like a big amount then: $10. It wasn’t a lot of money but for a poor university student, paying off a university debt on top off normal living expenses, it was not exactly loose change.
Now my cheapness, or the justification of it, isn’t the point here. The point is that when I actually entered the amount to donate it had increased to $20. Between the time I grabbed my credit card and the time I entered the amount for donation, something influenced my decision and persuaded me to donate double of what I had originally planned.
What had happened?
I believe the answer lies in the screen layout of the donation page; specifically, the default figures presented as possible donation values. Listed on the page were some default figures. Intentional or not, the $250 and $100 values acted as reference points that influenced my judgment. They subconsciously nudged me to donate more than I had originally planned.
While at first, it might sound like some wacky conspiracy theory – “Ooo…Wikipedia’s out to get you and take all your money,” it’s much more likely that some other factor influenced my decision. If psychology has taught me anything, it’s that personal experience isn’t the best way to make accurate inferences.
Human perception and judgment is pitted with all sorts of biases and errors. What personal experience is good for, is finding ideas to test, such as the ideas that a high value acted as a reference point, forming the base of my donation. Fortunately, it is neither a new or untested idea. It has been widely studied by cognitive psychologists for years. It even has an official name: anchoring.
The classic experiment on anchoring was conducted by Nobel Prize-winning cognitive psychologists Amos Tversky and Daniel Kahneman. They spun a wheel to pick a random number between 0 and 100. Then they asked the participants whether the percentage of African nations in the United Nations was higher or lower than that number.
Afterward, the participants were asked to estimate the actual percentage of African nations in the United Nations. Those who had been exposed to a high random number estimated that figure to be 45%, while those who had been exposed to a low random number estimated the figure to be 25%.
In other words, an arbitrary number influenced the participants’ judgment so much that the two groups reached a vastly different conclusion for the same question.
It could be argued that the starkly different judgments resulted because the participants were not knowledgeable about African nations in the U. N. Thus they were susceptible to using the random number as a reliable marker for basing their answer.
If that were the case, then an expert would not be similarly affected.
The Judge, the Student and the Power of Anchoring
In 2001, two German researchers put this very argument to the test. The researchers had 16 experienced trial judges from a regional superior court in Germany evaluate and pass judgment on a hypothetical rape case.
Sabine K and Peter F got to know each other at a party and started flirting passionately. They had a few glasses of wine together. At the end of the party, Peter offered to give Sabine a lift home. However, rather than taking her home, he took her to a forest and attempted to have sex with her. Sabine resisted but Peter eventually penetrated her, which Sabine experienced as rape. Eventually, he took her back home.
Along with this account and other relevant information, the judges were also provided with a recommended prison sentence for the defendant. Half were given a recommendation for a 12-month prison sentence, while the other half were given a 34-month sentence recommendation. The experimenters wanted to know whether the recommendation would impact the judges’ decisions.
Consistent with the theory of anchoring, it did. The judges given a 12 month recommendation sentenced the defendant, on average, to 28 months prison. In contrast, judges given the 34 month recommendation sentenced the defendant, on average, to 35.75 months. It was a difference of 7.75 months.
What was interesting is that the recommendations did not come from trained prosecutors but first-year computer science students, a fact the judges knew prior to their sentencing. Yet the judges were still influenced by the recommendation. Hence the difference in sentencing could not be attributed to the judges relying on the reliability of the recommendation, rather to the initial figures acting as anchors around which the judges based their decisions.
The researchers concluded that even experts are not immune to anchoring because anchoring works outside the realm of the conscious mind. We are affected by it without even knowing that we are affected by it. It’s no surprise then, that I doubled my donation amount after seeing the higher figures on the screen.
By simply presenting some high values, Wikipedia elicited an extra $10. Consider if this happened on each of the 100,000 or more small donations they received. That’s a whopping $1,000,000 for adding a few random numbers. That’s how powerful anchoring can be in influencing decisions.
Anchoring at Your Local Menswear Store
Menswear stores understand this phenomenon. When someone goes in to purchase a suit, shirt, belt, and tie they start by selling you the suit first. The suit is the most expensive item and therefore acts as an effective anchor for making the cost of the less expensive items less restrictive. Once a customer is presented with a $400 suit, the $45 belt or the $30 tie seem affordable.
How to Use Anchoring to Increase Sales & Grow Your Business
If you are a store that sells multiple items, sell the expensive ones first.
If you are trying to elicit donations, like Wikipedia, present some high figures to get customers thinking high values.
Using Anchoring On Your WordPress Website
If you’re operating an eCommerce store, you’re probably in one of the easiest positions to take advantage of anchoring on your website.
Using cross or upselling on a WordPress website isn’t hard, and should assist you in increasing the average order value.
With your service-based business you might struggle to apply anchoring effectively, but overcoming these struggles will often prove most profitable.