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Showing posts from November 29, 2019

The anchoring effect when setting your price

In my recent post I spoke about why in a negotiation you should put your price on the table first. It is all about setting an expectation or an anchor. Once the anchor is set, the negotiation will revolve around the anchor point.
Most of the time we already store an anchor of certain products in our head. You expect to pay $4.00 for a Sushi roll for lunch, or $3.50 for a regular size coffee from the coffee shop next to your office. But what happens with products that we don’t buy very often, and we are less familiar with? A few weeks ago, our washing machine blew up. During the spin cycle smoke came out of the back of the washing machine which was the end of it. The last time I bought a washing machine was probably 7 or 8 years ago, so I had no idea how much a front loader from a particular brand would cost now.
What most of us do, and I did it too, is consult the internet and look at the next best website that sells washing machines. The first price we see for that product then be…