Perception is everything.
Take a picture of a pebble in the right surroundings and you can make it look like a boulder. Ten thousand dollars is a lot to a college student, but not so much to a CEO of a Fortune 500 company.
It’s important to understand the role of perception in business. The perception of retailers is what matters most, because how they perceive your product will directly affect how much they value it.
To create a high value for your product you have to influence these retailer perceptions.
One way to do this is by taking advantage of the Anchoring Effect.
The Anchoring Effect
Consumers have a tendency to use reference points, or “anchors,” when making decisions. These anchors are what affect perceptions.
Give someone 25% off on a pair of $100 jeans and suddenly she thinks she’s getting a deal. The original price, the anchor, is what makes the customer perceive she is getting a $100 value for only $75 when it was probably only a $75 value in the first place.
This instance specifically is called price anchoring, and it’s only one of the dozens of ways to create an anchor.
Anchoring Using Another Business
Instead of playing with prices, you can align your business with another one to create a useful anchor.
Associating with the right business gives consumers a point of reference for your business. If the company you’re partnered with has a reputation for producing high-quality products, then consumers are naturally going to relate that same attribute to your company.
That reference point helps consumers perceive a higher value for your services.
Creating The Right Anchor
Not every business will give you a successful anchor. To develop a good one, you first have to determine what perception you want your consumers to have. Do you want to be perceived as reliable? Safe and secure? Innovative? Efficient?
Once that perception is determined you can start to identify businesses that will help build it. Is there a business known for its reliability that could help boost the perception of your own business’s reliability? Are there multiple businesses that could help build a better perception?
The value of a product comes from how retailers perceive it, and you can help to influence perceptions to increase its value.