Participants were asked to quickly estimate - within 5 seconds -  the answer to one of two same calculations, anchored either low or high.

Those with the low anchor guessed 512 on average, whereas the high guessed a much higher 2,250. The correct answer was 40,320.

Put your highest price first in a list to make subsequent prices appear cheaper in comparison and increase sales. For instance, on the wine list shown, instead of putting the expensive items at the foot of the list, rearrange them in descending price. 

Don’t set your anchor price too high or the natural inclination to anchor other options against this price will diminish. Be realistic and keep it within an appropriate region of your other prices.

Audience matters. Anchoring effects  weaken for those with higher cognitive ability (Bergman et al., 2010) and those with prior product-buying experience (Alevy et al., 2011).

243 people were split into four groups and asked about the attractiveness of one of two types of chocolate truffle at one of two prices (Hersheys at 0¢ or 1¢ or Lindt at 13¢ or 14¢).

Those in the zero-priced truffle group felt disproportionately more attracted to their truffle than those in all other truffle groups.

Replace very low cost with free.

‍Amazon famously rolled out free shipping in Europe, sales rose everywhere but France, where shipping was mistakenly set at 10¢. What small costs are you passing on to consumers?

In line with Prospect Theory, it may be better to bundle ‘the pain’ within a larger cost.

Communicate what is free.

‍Consider surfacing bundled, previously hidden value that you offer, actively highlighting the zero cost in marketing material and on invoices etc.

Nudge with small charges.

‍The flip side of zero-pricing is that incurring even a small cost quietly impacts our decisions. If you're trying to change behaviour, imposing a small discomfort can disproportionately assist.

306 people visited one of three coffee shops and were asked to buy a coffee at either: €0.99, €1, €1.01 or an orange juice that was €0.15 cheaper than the respective coffee price.

Results showed that, contrary to conventional research on pricing (shown by the dashed line), the round-priced coffee saw the highest % of sales.

Use round prices to reduce fatigue.

‍There’s a growing trend for cognitive convenience in the face of Time Scarcity and Analysis Paralysis. 

A banana costing £1 is easier and faster to process mentally than one costing £0.95. UK retailer Tesco now adopts this specifically for promotions.  

If your brand places a value on saving time and energy, consider doing the same.

‍

Use for premium, green or pleasurable products.

‍Marks & Spencer (UK), Saks (US) and Levi’s now adopt round pricing, showing the zeros. Doing so signals brand quality, warmth and trust.

 Use to nudge secondary behaviors.

‍For transactions, add a Foot In The Door to give the rounded difference to charity (supermarket), savings (banks) or tips (fast food), for example.

153 people were asked to choose between a 5-star restaurant 25 mins away and a 3-star restaurant 5 mins away. A third decoy restaurant option was then added of 4-stars  at 35 mins away.

This decoy shifted preferences from the closer, cheaper restaurant towards the 5-star option.

Determine your target.

‍What is the product you want to sell more of, next to a lower-margin competing product? Build your decoy product around this with a price or attributes that inadvertently highlight the target's attractiveness.

Don't overwhelm.

‍Offering too much choice or highlighting too many competing attributes where neither option is clearly more attractive will trigger Analysis Paralysis, making consumers' decision processes more difficult.

How is your target clearly more attractive?

Test different decoy values to optimize the effect.

Huber et al., (2014) suggest that decoys work best when it’s really easy and quick to see the dominant product, when pre-decoy desire is roughly split between target and competitor and when people don’t strongly like / dislike the decoy.