‘Anchoring’ in Marketing.. Me thinks it might just work!

“Sir, would you care to get car insurance from GEICO?.. its only $40 a month! We have a special offer for you!”

“Sir, how would you like to avail of our super awesome discount of 45% on a home loan? We can give you a special special deal.. just for you, we’ll make the discount 48%! plus, we’ll throw in a key-chain… Value for money!”

Telemarketing .. telemarketing… How many of you got calls like this? And what is usually your response to it? Bharath (colleague at the place where I work) has a pretty awesome take on why this wouldn’t work. My personal experience? I don’t own a car nor do I have the financial capacity to pay for a home. Yet, I get these telemarketing calls frequently. Why?

The answer is that firms don’t know who their customers/prospects are. Awful targeting, and even worse, insistent selling are some of the biggest turn offs in a customer’s mind. Telephony is a rich medium of communication! If used optimally, you can make some serious money! But no.

#FAIL..

Anyway.. moving on. In addition to using telephony to acquire customers, companies use the same medium to maintain it. I’m going to focus specifically on the ‘customer service’ people when they deal with product fails. Take for example, the case of a canceled flight. Your 11 am flight to NYC is canceled due to a blown tire. Now you can’t make it to the 1 pm sales call. WHAT DO YOU DO?

  • Step 1: Curse your luck.. then realize your luck has nothing to do with it. So then , you blame the airlines for messing this up.
  • Step 2: You want to vent it out somewhere..You try your spouse/friend/relative. Not happening.. phone slamming ensues.
  • Step 3: Call customer service.

What happens next is very interesting.You wait for half an hour, braving

  • the annoying intercom music (usually opera or orchestra.. both of which i hate),
  • a gazillion automated lady voices, who can never get your name right (Indian names are especially decimated).
  • Automated msgs that take you on a key-punching spree on your phone until you’re back listening to the annoying intercom music

And finally, someone (most likely a call center from you-know-where) comes online and explains to you how he/she understands what you are going through and that they can book you only on a flight the next day. Blah blah blahblah blah..

But how many times have you heard this,

“I know I can book you on the flight the next day… but lemme see if I can do better than that. I’ll try to book you on a flight with another airline, even if it’s not a direct flight.. and not business class.. but I’ll do it for you, ABSOLUTELY FREE”

Aha! Now we’re getting somewhere… right? … Dont know for sure.. but I guess so.

This is a practice better known as ‘anchoring’. Many companies try to create the WOW effect for their customers. Zappos is the best example that I can think of. If your shoe is torn (and of course, if you bought it from Zappos.com), and you wanted to return it, the customer service rep goes out-of-the-way to make you feel better. They really make the customer ‘feel good’ about them. They prove to the customers that they really really do care. (A whole case study about this came out in the HBR 2010. For more, go there.. I could get into trouble for putting all the info in my measly little blog). In fact, executives today forbid customer service reps from using negative language like , ‘No’, ‘that’s company policy’ etc.

By using this anchoring method, do companies make money on the customer? I doubt it.. They certainly do gain some trust with the customer. Now imagine, if they could ‘differentially’ do this for their customers. Then we might be in business!

– Sarang Sunder

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About nrimolaga

If you are thinking what PZAU means and why I have that as my handle, I cant help you there. But, on to other matters about me, I am a student of Marketing, self proclaimed Basketballer and worshipper of Metallica, Pinkfloyd...Apart from that, Highly Opinionated and therefore not very popular.
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