Steve Jobs was an incredible speaker. His ability to craft a narrative about a new Apple product was unmatched. By the time of the iPad announcement in 2010, he had perfected this art.
The event started like any other Apple event with Steve coming on stage to a round of applause. Then he launches into a story about where Apple had been and where they were going.
Steve introduced the iPad by framing it as a device that blended a Macbook and an iPhone. Then, they spent 75 minutes talking about all the different ways you could use an iPad. The cheers kept coming until it was time to talk price.
Funny how no one ever cheers when price comes up.
Price is pain in our brains. How did Steve reduce the perceived pain in his customer's brain? Price Anchoring.
Everyone in the audience assumed that this new technology was going to be expensive. Then Steve confirmed their worst nightmares.
He says, "If you listen to the pundits, we're going to price it under $1,000, which is code for $999." Then a giant slide with $999 in bold white lettering comes up behind him. You can feel the weight in the room. No cheers.
Then, he makes the price feel even heavier by launching into a story about the goals of the iPad team. How they had ambitious technical goals, user interface goals, and even an aggressive price goal.
That's where the story takes a last-minute turn. Steve announces to the sound of glass shattering that the iPad will only be $499. Thunderous applause.
Finally, he introduces the six models that Apple would be launching in the spring with the most expensive model still coming in $170 cheaper than the original pundit proposed price. All anyone could think about was what a great deal they were getting.
We use facts to justify emotions.
The room wanted the iPad. They needed a way to justify the expense. Steve gave them all the justification they needed by using price anchoring.
QOTD 👉 How can you use price anchoring to help customers get out of their own way?