Anchoring and the Pick-Your-Own-Price Strategy

Posted by Andrew on September 15, 2007

A while back I bought the website How To Flip Websites. After experimenting with lots of different pricing strategies, I decided to try one where I let people pay whatever they wanted. I set up a special page and drove people to it with Google Ads. The page included a BUY NOW button that works like Paypal donation. When you click it, you enter your own price and then are given access to the videos. But before they paid, I used the anchoring strategy by suggesting a price. What I found is that, although people paid less than the suggested price, more people overall chose to pay. I suggested $39, and the average prices was around $17, but my conversion rate went from 2% to about 35%.