It seems that our word is filled with numbers. Account numbers, passwords, price tags, calorie counts, discount percentages, credit card points, shoe sizes, and the number I have the hardest time remembering, the combination to the lock I use at the gym. We know of the obvious places where numbers influence our spending choices, like at the market where you see a display of bread with the number $4.39 crossed out, and next to it it says $3.25. The sign is meant to say to you "be happy, you're getting a really good deal" and you purchase a loaf, whether the $3.25 is a good price or not. Think of the infomercial sales pitch: Knives like these usually sell for over $300, but through this special, limited offer, we'll sell you the knives and this Snuggie for just $19.99! This is called "price anchoring" The pitchman sets an anchor of $300 in our heads, and we think we're getting a screaming good deal because we're buying the product for $19.99. Woohoo! It's like money in your pocket.
Even if we already know this stuff, it turns out we're still effected by it. We know the MSRP on that thing is meaningless, but it still sets our expectations of what we think that thing should cost, and anything less feels like a good deal (and vice versa). But interestingly, it turns out these numbers don't aways stay attached to the correct subject. These numbers have been shown to break off and float through your mind, attaching to something else entirely. So you may have just tried on a European size 36 shoe, and then expect that those shoes should cost about $36. Or you may have just stepped off the #12 bus, and then expect your latte to cost $12. It's like numerical free association.
So one way to take advantage of this phenomenon is to plant your number anchor first. You're competing to get YOUR number that prime spot of someones mental real estate, and to influence the outcome, you have to mention a number before THEY do. If you are trying to sell something or negotiate a salary, you have to mention a high number, even if you're talking about something else. Saying something like, "This car has only 25,000 miles on it" is likely to get the person to pay you something closer to $25k (unless it's your 1986 Yugo). Next time you walk into a meeting with a client just yell out 299,792,458 before anyone says anything else. This reference to the speed of light might call your sanity into question, but you might also close a really big deal (depending of course on what it is you sell).
I was thinking about all this, and then I heard a radio program about how often numerical information in our minds is just plain wrong. People throw around numbers and percentages on everything from federal spending, illegal immigrants and social security spending, which are at times nowhere near the true numbers, and even when given the actual numbers, most people don't change their numerically based opinions. Don't bother us with the facts, our brains can't distinguish them anyway, so just make something up. If a politician (or other salesman) wants his viewpoint confirmed by statistics, he can merely invent some and repeat them, until others start doing the same, thereby confirming their accuracy somehow.
If you put these two ideas together, you realize that much human decision making, when it comes to things like spending and voting is based on numbers that are irrationally anchored in your head, sometimes having nothing to do with the subject you're contemplating, and sometimes having been completely invented out of thin air. So how can you use this information when setting your price or negotiating costs? Did you know that today is National Peanut Butter Day? Americans eat around 700 million pounds of peanut butter per year. Sorry to have changed the subject. How much did you say that new fridge was going to cost me?
