🌱 Price Anchoring with Elon Musk
- Twitter Blue costs $20
- Mmm, too expensive
- What about now? Twitter Blue
$20$8 now - OK, where do I buy?
That’s the summary of Twitter Blue. Elon Musk gave us a masterclass on how to use anchoring to drive sales.
Today — 11 Nov 2022 Friday, everyone is talking about Twitter Blue. It’s a hot topic but very controversial.
It’s not random, and Elon Musk planned for it.
When he announced that Twitter Blue would cost $20, he got a ton of backlash. People thought it was too expensive.
A few days later, he tweeted this:
Twitter’s current lords & peasants system for who has or doesn’t have a blue checkmark is bullshit.
— Elon Musk (@elonmusk) November 1, 2022
Power to the people! Blue for $8/month.
Suddenly, more people are OK with paying $8 for a badge.
This is Anchoring.
If you put only one price for your product, it seems you leave a lot of money on the table. People need something to compare to define if it’s worth it. Then if we introduce a much lower price, it seems to be a good deal.
People are not rational about pricing and use comparison to decide whether they’re getting a good deal.
Here are some ways you can use anchoring:
- Use strike-through pricing to share deals.
- Compare your product to high-priced competitors.
- Create an expensive option as an anchor for your core offer.
Twitter Blue and Elon Musk gave us a masterclass on how to use anchoring to drive sales.
Related: 🌱 Offering multiple prices for your product to increase revenue