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Evergreen Notes

🌱 Price Anchoring with Elon Musk

Twitter Blue and Elon Musk gave us a masterclass on how to use anchoring to drive sales.

  • Twitter Blue costs $20
  • Mmm, too expensive
  • What about now? Twitter Blue $20 $8 now
  • OK, where do I buy?

That’s the summary of Twitter Blue. Elon Musk gave us a masterclass on how to use anchoring to drive sales.

Today — 11 Nov 2022 Friday, everyone is talking about Twitter Blue. It’s a hot topic but very controversial.

It’s not random, and Elon Musk planned for it.

When he announced that Twitter Blue would cost $20, he got a ton of backlash. People thought it was too expensive.

A few days later, he tweeted this:

Suddenly, more people are OK with paying $8 for a badge.

This is Anchoring.

If you put only one price for your product, it seems you leave a lot of money on the table. People need something to compare to define if it’s worth it. Then if we introduce a much lower price, it seems to be a good deal.

People are not rational about pricing and use comparison to decide whether they’re getting a good deal.

Here are some ways you can use anchoring:

  • Use strike-through pricing to share deals.
  • Compare your product to high-priced competitors.
  • Create an expensive option as an anchor for your core offer.

Twitter Blue and Elon Musk gave us a masterclass on how to use anchoring to drive sales.

Related: 🌱 Offering multiple prices for your product to increase revenue

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