SUMMARY
Our brains use handy, useful shortcuts, like heuristics, to make decisions. But that doesn’t mean our brains always make the right decision. When our brain uses anchoring its attaching itself to a reference point, no matter what that reference point is. This can cause a problem when it comes to decision making.
Founder Hamid Ghanadan explores why our brains like to anchor to the first thing we hear (relative thinking), instead of what is rational (absolute thinking).
By understanding this, B2B marketers can leverage the anchoring to influence their audience to make decisions.
The mouth of the Nile River is approximately 100 miles away from Cairo. But do you know how long the Nile River is?
Make your guess and keep that number in mind.
That number you guessed probably isn’t anywhere close to the correct answer. It’s likely because I put the number 100 in your mind prior to you making your estimate, and your brain ‘anchored’ its guess to 100.
Anchoring works because we’re much more likely to tap into our relative thinking rather than absolute thinking. We need a reference!
Anchoring the mind can create… Catalytic Results!
The brain uses heuristics—or shortcuts—to make decisions. And one shortcut is our brains’ desire to anchor itself to a reference point.
The way anchoring works is fairly simple. When we need to make an estimate, we look for, and are influenced by a familiar position. It doesn’t matter where this familiar position comes from, and often we’re not even aware that we’re basing our answer on it.
But once an anchor is set, we are biased toward interpreting other information relative to the anchor. That’s why your guess for the length of the Nile River is probably closer to the number I gave you than the actual length of 4,160 miles.
The human brain is more comfortable when it’s anchored, instead of blowing about in the wind of uncertainty.
A classic anchoring technique is subtly at play when a physician tells a patient about a success rate of a procedure. After all, a 90% success rate anchors the patient in thinking about success, and in contrast, a 10% chance of adverse effects sounds really low, even though the risk of adverse effects is the same.
Anchoring doesn’t just happen with numbers. Another example of anchoring is when a physician is anchored to the initial symptoms of a patient. These initial symptoms may influence the doctor’s subsequent evaluation, and if no other diagnostics or data are ordered, it’ll most likely affect the diagnosis. That’s why many physicians choose to order additional tests or consult their colleagues on serious diagnoses.
So how can you leverage anchoring to communicate? Think of what you’re trying to achieve with your communication, and how you’re trying to influence the behavior of your technical audience. Then, create an anchor that is closer to what your intended goal is and communicate it to the audience before asking them to make a change.
My team was once working with a group of technical professionals who were supposed to submit a report on a weekly basis, but only managed to submit their reports by the deadline 50 to 60% of the time. Not a great performance rate. But in analyzing the data, we found one week when 90% of the reports were submitted on time.
So we devised an internal communications plan, where we first shared that in analyzing the submission data, we had found on-time submissions to be as high as 90%. We then said that we understand that things can come up from time to time, affecting someone’s ability to submit their report on time, before asking everyone to tell us a reasonable expectation of what their individual submissions should be.
By anchoring the audience to their highest performance, instigating them to write down their own submission frequency, in effect committing their new behavior based on the anchor, and publishing the weekly submission rates shortly after the deadline, the team was able to maintain a submission rate of approximately 95% on an ongoing basis!
Humans are beautifully complex. And our actions are governed by certain patterns. Understand these patterns, you can inspire people to action and create Catalytic Results.
Business Examples + Studies
Anchoring often occurs when we’re shopping — whether that’s for toilet paper, a pair of jeans or a car. Say we see a car on a dealership lot for $25,000. And then we see it at a second lot for $24,000. Our brains immediately assume that this second car dealership is a really good deal. That’s because the anchoring bias makes our brains favor the first number we see.
When you see a sign at the grocery store that limits how many of one item you can take, that’s not because the store doesn’t want you to take as many as possible. In fact, in a study from the late ‘90s, researchers found that when such a sign exists, people are more likely to take more of said product, instead of less. Product limits actually increase sales.
If you want to trick your brain into beating the anchoring bias, set your own mental anchor first. This Business Insider piece goes into the pros and cons of doing just that.
This collection of studies explores how anchor values affect a person’s numerical estimates.
Viewed over 6 million times, Dan Ariely illustrates how different biases — including anchoring — put decision making out of our control.