SOP 68 — Run the anchor upsell

1. The effect in one purchase

In one example, a buyer sets aside $400 for a new mattress. The first one she lies on feels right, and its tag reads $8,000. The salesperson sees her face, asks whether the brand name and the hand-stitched cover matter to her, and points to a second mattress waiting next to the first: the same support and the same feel, at $1,000. She takes it, adds $200 of pillows and a protector, and leaves having spent three times her budget without minding. The first price she saw made every later one look small. The figures in this example are invented.

The same effect is reported of a luxury carmaker that stopped showing its $400,000 cars at car shows, where they looked extravagant, and showed them at plane and yacht shows instead: to someone who has just decided against a $50 million jet, a $400,000 car is small change. Everything is priced against what it is placed beside.

2. How it works

Offer the premium item first. If the customer is shocked by the price, offer a cheaper alternative made by changing secondary features only. A premium version shown first at 5 to 10 times the price makes the main offer — the one most people buy — look like the better deal, and more people buy it.

Primary features stay; secondary features go. Every product has both. The anchor and the main offer share the primary ones: the cheaper mattress gave the same support and the same feel. They differ in the secondary ones: the brand name, the cover. If the difference is small and the price is a fraction — one-eighth is the fraction given, as in the example above — the main offer reads as a steal.

If what you change is something the customer does care about, you have changed a primary feature, and they have to weigh price against value all over again. Change as little as possible between the thing they considered and the thing they buy, so the judgment they already made carries over and the lower price reads as an 80 or 90 percent discount on the same thing.

3. The two further benefits

Higher spend. Buyers tend to go past the amount they planned; the mattress buyer spent three times what she meant to.
Some customers buy the anchor. Maybe one buyer in five takes it. In the mattress example, if that buyer would otherwise have taken the $1,000 main offer, one $8,000 sale in five lifts the average sale from $1,000 to $2,400. These figures are invented.

If one buyer in ten buys something ten times as expensive, you double the business — before counting the higher take-up and higher spend of everyone else.

Flag: double or just under. If the buyer of the tenfold item would otherwise have bought the main offer, revenue rises to 1.9 times what it was; if that sale comes on top of the others, it doubles. Which of the two is meant: not established on this page.

Where it fits. The anchor is the brute-force counterpart to the menu upsell: the menu is elegant and suits businesses with a high volume of transactions; the anchor suits businesses with fewer customers who each spend a lot, and is said to be able to make more than the menu upsell even though it is simpler.

4. The five steps

Present the anchor — the very expensive version.
Watch for the buyer's reaction to the high price. Expect it. If there is no reaction, you did not anchor high enough. Twenty percent above the main offer is not an anchor, and nothing within 100 percent is: it has to be 5 to 10 times, an order of magnitude, so that the buyer re-files the original purchase in a different category.
Come to the rescue. Have the main offer picked out and ready before the reaction comes. Ask whether they care about what makes the premium one premium — the brand, the finish, the extras most people do not care about.
Present the main offer, and expect relief and the sense of a better deal.
Ask how they want to pay — which card they prefer.

If there is no reaction, close the whale. If they look at the anchor and say it is nice, take the card and offer the extras that go with it. You have a big buyer; keep going.

Flag: no reaction, read two ways. Step 2 and section 7 read a missing reaction as an anchor set too low or not really sold; this paragraph reads it as a buyer ready for the anchor. This page does not settle which reading is right.

5. The asymmetry that makes it worth doing

The only thing worse than making a $1,000 offer to somebody with a $100 budget is making a $100 offer to somebody with a $1,000 budget. The first loses you $100; the second loses you $900. Customers have left, taking large amounts of cash with them, because they wanted more than there was to offer. So always have a premium upsell ready. Only a handful of customers buy anchors, and that handful brings in big profits. You are not failing if one in ten buys the offer ten times as dear; you are doubling the business. Showing a premium offer first does not lose you customers; not showing one loses you money.

6. The worked cases

Case	The anchor	The main offer
Lawn care	The owner's cell number, fancy mulch, natural pest control, biweekly maintenance: $1,000 a week	The crew chief's number, generic mulch, normal pest control, biweekly maintenance: $200 a week
A painting	Protective packaging, a 20-year insurance policy and gift wrap: $1,000	Normal packaging, one-year insurance and a sticker: $200
A newsletter	Every past issue, every new issue, 24 hours' early access: $199 a month	New issues on time: $19 a month, described as one-tenth of the price

On the lawn. The main offer is almost the same thing; asked whether the yard will look any different, the answer is not really — it depends on how much you care about the soil. The buyer who cares takes the anchor; the 80 percent who do not take the $200. What they do not know is that the same service offered straight at $200 the week before was haggled down to 150 or 99 a week.

On the painting. The buyer should feel reasonable, as if they are getting the better of you, when you designed the game and they are playing it.

On the newsletter. The main offer feels like a steal, though you might have been competing against sellers charging $7 a month before.

7. Sell the anchor for real

Treat the anchor as a prop and the customer will too. Had the salesperson shown the first mattress while saying it was probably out of range, the buyer would never have considered it and would not have been anchored. The customer has to consider the purchase properly and start working out how they would pay for it; their mind then justifies why it might be worth that much. By the time they see something at a tenth of the price, the comparing is done and it looks like good value.

Make a premium offer you would be glad to sell, and be ready to deliver it. What happens when people build a real ten-times offer is that more than one in ten buy it — a great way to give yourself permission to anchor that high.

A reaction means they considered it. None means the anchor was too low or was never really sold. Present it in earnest or it wastes their time and yours.

Watch your team. Many staff will skate past the anchor because they sell from their own wallet: I would never pay that. Of course not — they already know how to fix the car. You often cannot see the value of what you sell, because for you it is easy; that is why it is a business.

8. The ratio, stated two ways

The instruction is 5 to 10 times the main offer. It is also put this way: after anchoring, offering the primary features at a third, a fifth or a tenth of the price makes the main offer a great deal.

Flag: a third is outside the band. A main offer at one-third of the anchor means an anchor three times the main offer, below the five-times floor set in step 2. A second reading of the same point gives one-fifth alone, inside the band. This page does not settle which reading is right.

9. What this page does not decide for you

Where between five and ten times to set the anchor. Both ends are stated.
What share of buyers will take the anchor. One in five and one in ten are both used; neither is given as a measured rate. This page gives no figure for it.
Which secondary features to strip for your product. The test is whether the customer cares.

10. The checklist

Question	The answer
What comes first	The premium version
How much dearer	5 to 10 times the main offer
What the two share	Primary features
What differs	Secondary features only
The five steps	Anchor, reaction, rescue, main offer, payment
No reaction	You did not anchor high enough — or close the whale
Not an anchor	20 percent more, or anything within 100 percent
The two further benefits	Higher spend than planned; a few buy the anchor
The asymmetry	A $100 offer to a $1,000 budget loses $900
Where it fits	Fewer customers spending more each

11. What this page does not cover

For how an anchor fits among attraction offers, upsells, downsells and continuity, read SOP 59 — Assemble a money model from four prongs. The elegant counterpart for high-volume sales, which unsells before it prescribes, is SOP 67 — Run the menu upsell; the simplest upsell is SOP 66; and crediting what a customer already paid toward the next purchase is SOP 69 — Run the rollover upsell. Cheaper tiers offered to somebody who has refused outright, rather than as the rescue from an anchor, are SOP 72 — Generate tiers and downsells from the quality vectors. Setting the price of the main offer itself is SOP 2 — Set a price from the value gap, not from competitors.

Mattress construction, lawn chemistry and art insurance are not covered on this page.