“The way you present your price will affect sales volume and willingness to pay of your buyer.” – Per Sjofors in today’s Tip 1406
Do you set a price anchor?
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Per Sjofors. As a serial entrepreneur, running companies in Europe and the US, he did pricing experiments. Some of these worked spectacularly well, and some did not work at all. As a result, Per founded his company out of his frustration with what business schools teach about pricing. Here he is:
Per Sjofors: The way you present your price will affect sales volume and willingness to pay of your buyer. The way to do this is to set an anchor, right? And what I mean with that is that when you present your price, first of all, I would recommend that you always give the buyer a choice of three. A good, better, best, right? You probably already know that, but it’s always good practice because then the choice is not should I buy? Should I not buy? But the choice for the buyer becomes which of the three should I buy?
Now, the way you present your price should be done in such a way that as your buyer read your price. That we typically read from top to bottom and from left to right, at least in the western world. So you want to start with a high price that sets an anchor point because as humans, we cannot avoid comparing numbers. And if you set that anchor, a high anchor really should be as high as possible. And the consequent numbers, the consequent prices would appear more affordable for the buyer, right? And you may want to make that anchor, like I said, as high as possible and very few will buy it except a few people who say, well, I just got to have the best, I just got to have the most expensive thing. But those are not many.
What you’re going to find out is that you’re going to sell most of whatever the middle choice is, and that’s going to be obviously the most attractive choice for most buyers. Now, adding an anchor point like that will typically add between 3% to 5% additional sales volume. And who wouldn’t want that, right?
Scott Ingram: For links to connect with Per, and to his book “The Price Whisperer: A Holistic Approach to Pricing Power”, just click over to DailySales.Tips/1406. Once you’ve done that. Be sure to come back tomorrow for another great sales tip. Thanks for listening!