How to Use the Anchoring Effect in Your Pricing Strategy

Why every serious SaaS company has three pricing tiers and how to build yours.

Look at the pricing page of almost any successful software company. Notion. Slack. Figma. Zapier.

You'll see the same pattern: three tiers.

A cheap one. A mid one. A premium one.

Most people assume this is about giving customers options. It isn't.

The middle tier is what they want you to buy. The premium tier exists to make the middle tier feel reasonable. The cheap tier exists to catch price-sensitive users who would otherwise leave.

This isn't a coincidence. It's applied psychology. Specifically, it's the Anchoring Effect, one of the most reliable pricing tools ever discovered.

If you're building a business, launching a product, or writing a pricing page, this article is for you.

The First Number Wins

In 1974, psychologists Amos Tversky and Daniel Kahneman ran an experiment with a rigged wheel of fortune. Participants who saw the wheel land on 65 estimated that 45% of African nations were in the UN. Participants who saw it land on 10 estimated 25%.

The number was random. The question had nothing to do with the wheel. It didn't matter.

That's the Anchoring Effect. The first number your customer sees becomes their measuring stick for everything that follows.

For marketers, this is gold. Because it means whoever sets the anchor controls the range.

The Three-Tier Playbook

Return to that pricing page. Basic tier: €19. Pro tier: €49. Enterprise tier: €199.

The €199 anchor does three things simultaneously:

1. It makes €49 feel like a bargain. Without the €199 tier, €49 is the highest price and feels expensive. With it, €49 is the reasonable option, the sensible middle.

2. It signals product depth. A company that charges €199/month for anything must be sophisticated. That perception halos onto the €49 tier too.

3. It catches enterprise buyers. Rarely, but consistently, someone actually picks €199. They wouldn't have if you hadn't offered it.

This is what Kotler and marketing textbooks call psychological pricing, designing prices around how customers evaluate value, not around what the product costs to make.

Reference Prices: The Anchor Nobody Notices

There's a subtler application of anchoring in pricing that most companies get wrong.

Kotler calls it the reference price — the price customers carry in their minds before they even see yours.

Walk down a supermarket aisle. Kellogg's Raisin Bran costs €3.79. Right next to it: the store brand of the same cereal at €2.49. You don't know what raisin bran "should" cost. But now you have an anchor. The €2.49 feels like a smart choice.

That's not accidental placement. That's psychological pricing at work.

You can do the same thing with your product:

In a pricing page: show your competitor's price alongside yours. "Enterprise CRM tools cost €99/month. Ours is €39."

In a sales conversation: reference the market before quoting yourself. "Most consultants in this space charge €500 an hour. We charge €200."

In a landing page: anchor against a bigger investment. "Instead of hiring a €50,000/year marketing manager, get our platform for €199/month."

The anchor doesn't have to be your product. It just has to be the first number in the customer's mind.

Where Companies Get This Wrong

Now, the honest part. Most companies use anchoring badly, and it backfires.

Mistake #1 — Anchoring too high. If your enterprise tier is €50,000/month and your middle tier is €50/month, the anchor doesn't help. It just makes you look confused. Anchors work when they're plausible.

Mistake #2 — Anchoring with no substance. Adding an expensive tier just for pricing psychology, without any real product behind it, gets exposed fast. Customers who explore the €199 tier expect real value. If it's a fake, they lose trust in the whole company.

Mistake #3 — Ignoring the reference price. If your product costs €99/month and offers same features of your competitors and your competitors' cost €12/month, no anchoring trick fixes that. The market has an anchor. You're just fighting it.

Mistake #4 — Discount-only anchoring. Crossing out a price and writing a lower one works — but only if the "original" price was ever real. Constant "50% off" retail (looking at you, Michael's) trains customers to distrust the anchor entirely.

The Rule Behind the Rule

There's one deeper principle behind everything above:

In pricing, the number your customer sees first is the number they'll compare everything else to.

That's why the first line of your pricing page matters more than any feature list. Why the first quote in a sales conversation matters more than the negotiation that follows. Why the "before" number in a testimonial matters more than the "after."

Whoever anchors first, wins.

If you're not deliberately choosing your anchor, someone else — a competitor, a review site, a customer's assumption — is choosing it for you.

What To Do This Week

Three concrete moves:

1. Audit your pricing page. Do you have three tiers? Does the highest one make the middle one feel reasonable? If not, redesign.

2. Find your reference price. What do customers think your category "should" cost? Are you above, at, or below it? Is that intentional?

3. Rewrite your first sentence. Whatever headline sits above your pricing table make sure the first number a customer sees is the anchor you want them to remember.

That's it. Small changes, big psychology.

The Anchoring Effect isn't marketing manipulation. It's how the human brain has evaluated value since long before there were prices. The only question is whether you're using it or letting someone else use it on your customers.

Behavioral basis: Tversky, A. & Kahneman, D. (1974). Judgment under Uncertainty. Science, 185(4157), 1124-1131. Marketing application: Kotler, P., Armstrong, G. & Balasubramanian, S. (2023). Principles of Marketing (19th ed.). Pearson.

Read the science behind this article: The Anchoring Effect →

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