The anchoring effect: how to present prices so they appear cheap - psychology marketing

Presenting a price is not just a number. The way information is arranged, what is shown first and what is hidden, deeply influences the perception of value. A key technique to make an offer seem more affordable is to use a prior reference point that guides subsequent evaluation. From that point, the mind compares and judges. If that initial anchor is well chosen, the result is that the target price looks cheaper without actually changing the economic value.

What it is and why it works

The human mind evaluates relative quantities better than absolute ones. When a prominent number appears at the outset, it acts as a reference. From there, everything that follows is interpreted in relation to that first number. This comparison is fast, automatic and happens even when we know the first number may not be the best metric. That is why a high reference price, a visible “premium” option or a historical figure create context and shape the feeling of expensive or cheap.

Psychological principles involved

• Relative comparison: the brain assesses whether something is more or less than the initial reference, not its absolute value.
• Mental shortcuts: faced with complex information, people rely on simple cues (first price seen, size of the discount, order of options).
• Perceived coherence: once the reference is set, we tend to justify the decision to maintain consistency.
• Scarcity and urgency: when linked to the reference, they reinforce the sense of opportunity.

Strategies to present prices that seem lower

Three-option structure

Offering three levels (basic, intermediate and advanced) works well. If the advanced one is clearly more expensive and has additional benefits, the intermediate appears to be a balanced bargain. The basic serves to anchor downward, but the “decoy” is often the expensive plan, which makes the middle one look reasonable.

• Descending order: show the most comprehensive plan first.
• Differentiating tangible benefits: quantity, support, speed, guarantees.
• Highlight the recommended plan with design cues, but without distracting.

Visible reference price

Showing a previous or market price creates a comparison frame. Even if strikethroughs are not used, placing “Before: X / Now: Y” establishes that the perceived value is greater than the current price.

• Use real references: avoid invented figures that damage trust.
• Add context: “Industry average: X”.
• Avoid noise: don’t accompany with too many labels that confuse.

Bundles and added value

The same price can seem better if it includes extras. The mind adds benefits more easily than it subtracts costs. Including extended support, free shipping or premium access raises perceived value without touching the price.

• Highlight the total savings of the bundle.
• Show the individual price of each extra to reinforce the comparison.
• Avoid overly complex bundles.

Units and time frames

Dividing the cost into small units makes acceptance easier. A service of 300 per year can be perceived as 0.82 per day. The small numerator reduces friction, provided the total commitment is made clear.

• Indicate the total to avoid generating distrust.
• Use everyday comparisons: “less than a coffee a day”.
• Maintain consistency between periodicities (monthly vs annual).

Decoy option

Including an option similar to the intermediate but with a worse value/price ratio pushes people to choose the desired one. The decoy works as a contrast, making the target seem optimized.

• Ensure the decoy is believable and not misleading.
• Do not saturate with too many options.

Visual presentation and order

What appears first carries more weight. Showing the reference price or the premium plan first sets the frame. Using round numbers in the anchor and figures with decimals in the offer can emphasize precision and savings.

• Clear hierarchy: titles, bullets and prices well spaced.
• Design consistency between options to facilitate comparison.
• Place the savings near the call-to-action button.

Practical examples

Digital subscriptions

Presenting “Pro Plan” at 49 with a full list of benefits and then “Standard Plan” at 29 makes 29 seem reasonable. Adding “Industry average: 59” reinforces the perception.

Retail and ecommerce

A 3-pack at 24 versus a single unit at 9 positions the pack as cheaper per unit. Showing “Unit: 9 / Pack: 8 per unit” guides the decision.

Tourism and experiences

Flexible fare with changes included at 180 alongside a basic fare at 129 makes the basic seem cheap, especially if the anchor includes visible advantages.

Food service

Tasting menu at 60 alongside individual dishes priced 18–22 anchors the perception. The diner evaluates that the menu offers more for the whole.

How to choose the right anchor

• Market relevance: references the customer recognizes as valid.
• Target segment: different profiles require different anchors.
• Price elasticity: if it is high, more aggressive anchors are advisable; if low, be more cautious.
• Costs and margin: the anchor must support profitability.
• Stage of the purchase cycle: informative anchors at the start, confirmatory at the end.

Validation with tests and metrics

There is no single formula. What works in one category may fail in another. The key is to test, measure and adjust. A/B tests with variants of order, anchors and bundles allow quantifying the impact.

• Conversion rate by variant.
• Average order value and margin.
• Upgrade and downgrade rates.
• Returns, cancellations and support required.
• Retention and customer lifetime value.

Define concrete hypotheses, run tests with sufficient sample size and avoid changing multiple variables at once. Document learnings to create internal guidelines.

Common mistakes to avoid

• Unrealistic anchors: inflated figures that undermine credibility.
• Too many options: cognitive overload that stalls decisions.
• Inconsistent messages: different prices or benefits by channel without explanation.
• Hiding charges: surprise fees at the end destroy the positive effect.
• Not segmenting: presenting the same anchor to everyone reduces effectiveness.

Ethics and compliance

The technique should be used to clarify value, not to confuse. Be transparent with prices, taxes and conditions. Avoid practices such as hidden fees, pseudo-discounts or unsupported comparisons. A perception of manipulation reduces trust and increases support and return costs.

Checklist for implementation

• Define the objective: conversion, margin, sale of the intermediate plan or increasing ticket size.
• Select the anchor: premium plan, historical price, industry average or high-value bundle.
• Design the option matrix: three clear levels with tangible differences.
• Establish key messages: savings, benefits and time frame per unit or day.
• Prepare the visual presentation: order, hierarchy, spacing and clarity.
• Plan A/B tests: variants of order, savings label and bundle composition.
• Measure and document: conversion, AOV, margin, retention and satisfaction.
• Review legal and ethical aspects: verifiable references and visible conditions.
• Iterate by segment: adapt anchors to profiles and channels.

Application in digital and physical channels

On websites and apps, the order of price cards, microcopy and comparators influences immediately. In physical stores, signage and shelf arrangement play the same role. In both cases, the first point of contact should introduce the reference and maintain consistency throughout the journey.

Practical conclusion

Making a price seem low is not about tricks, but about context. A solid reference, well-structured options, visible benefits and continuous testing multiply the perception of value. With a credible anchor and clear design, the target price is interpreted as reasonable, even attractive, without sacrificing margin. The key is to combine psychology, data and ethics: a sustainable strategy that converts today and builds trust for tomorrow.