Latest / The Pricing Marketing Podcast with Fexingo: Price Anchoring, Bundling, and Conversion Pricing / How Price Anchoring Makes You Pick the Most Expensive Wine
Transcript
- Lucas: You’re at a nice steakhouse in Manhattan. The waiter hands you a wine list. The first bottle listed — top left, bold type — is a 2010 Château Lafite Rothschild for $1,200. Luna: Right, the sacrificial lamb. Lucas: Exactly. The restaurant almost certainly doesn’t expect anyone to order it — maybe one or two a year. But its job isn’t to be sold. Its job is to make every other bottle on that list look reasonable by comparison. Luna: So the $400 bottle next to it suddenly feels like a deal. Lucas: That’s the anchor effect in its purest form. And it’s not just wine lists. This is the same psychology behind the $2,000 MacBook Pro on Apple’s website, the platinum tier on a SaaS pricing page, the loaded SUV at the dealership. You place one item so high that everything below it feels like a value. Luna: There’s a Cornell study on this — from 2012, I think. They looked at wine lists from 40 high-end restaurants and found that when the top-priced bottle was removed, average spend per bottle dropped by about 12 percent. Lucas: Twelve percent is massive for a margin-driven business like a restaurant. The wine list has the highest markup of anything on the table — often three to five times retail. So anchoring customers up by even one tier directly hits the bottom line. Luna: And it’s not just about the highest anchor. There’s also the decoy effect within the list itself. Restaurants will put a moderately expensive bottle right next to a slightly cheaper one that’s almost as good, just to push you toward the higher of the two. Lucas: Right, that’s the classic popcorn-size experiment. Small for $3, medium for $6.50, large for $7. The medium is the decoy — almost no one buys it, but it makes the large look like a steal. On a wine list, the decoy might be a $150 bottle that’s clearly overpriced compared to the $130 bottle right next to it. Luna: So the $130 bottle becomes the smart choice. Lucas: And the restaurant’s margin on that $130 bottle is probably 70 percent. The customer walks away feeling savvy, and the restaurant gets a nice margin. Everybody wins — except maybe your wallet. Luna: I remember reading about a specific steakhouse — I think it was Peter Luger in Brooklyn — where the wine list is famously short and priced in a very intentional way. They have a few bottles under $100, then a big jump to the $400-plus range. Lucas: Peter Luger’s list is a great example. They don’t have a $1,200 anchor because their brand is more no-frills. But they still use a tiered anchor: the first page is all domestic wines at moderate prices, then you turn the page and suddenly you’re looking at Bordeaux at $300-plus. That page-turn is a psychological reset — the second anchor feels like the 'serious' list. Luna: So the anchoring isn’t just a single number; it’s a sequence. The first bottle you see sets the reference, but the second page can reset it. Lucas: Exactly. And this is where the concept of 'sequential anchoring' comes in. A study by Dan Ariely showed that if you ask people to write down the last two digits of their Social Security number before bidding on an item, those with higher digits bid significantly more. The random number anchors their valuation. Luna: That’s wild. And it’s why wine list designers put the most expensive bottle first — it’s a high number that sticks in your head even if you don’t buy it. Lucas: Let’s talk about how this applies outside restaurants. In B2B SaaS, you often see three tiers: Basic at $10 per user per month, Pro at $29, and Enterprise at 'Contact us.' The Enterprise tier is the anchor. No one is supposed to buy it off the shelf — it exists to make Pro look like a reasonable upgrade from Basic. Luna: And 'Contact us' is a soft anchor — it could be $50 or $500, so your mind fills in a high number. Lucas: Right. HubSpot used to do this with their Marketing Hub. The Enterprise tier was literally 'Get a demo' with no price. The Pro tier at $800 a month felt manageable compared to the unknown cost of Enterprise. They’ve since put prices up, but the psychology remains. Luna: What about charities? I’ve seen donation forms that suggest amounts like $50, $100, $250, and 'Other.' The $250 is an anchor — it makes $100 feel modest. Lucas: Exactly. And if you look at political fundraising emails, they often have a 'Suggested donation: $50' at the top, then a list of amounts starting at $25 and going up to $100. The $50 anchors the range, so $25 feels like a bargain and $100 feels like a stretch but still within reason. Luna: So the key takeaway for listeners: when you’re presented with a pricing list — wine, software, donations — always start at the bottom. That $1,200 bottle is not for you. Lucas: Actually, there’s a twist. If you’re a wine novice, the second cheapest bottle on a restaurant list is often the best value. Restaurants know that many customers won’t order the cheapest because it feels cheap, so they put a decent bottle at the second-lowest price point with a healthy margin. The cheapest bottle is often a decoy too. Luna: So you’re saying there are decoys on both ends. Lucas: Absolutely. The list is a minefield of anchors and decoys. But if you know the game, you can play it. Look for the bottle that’s priced just above the decoy — that’s usually the one the restaurant wants you to buy, and it’s often a solid wine at a fair markup. Luna: I want to test this next time I’m at a nice restaurant. I’ll ask the sommelier: 'What’s your second cheapest red?' Lucas: They’ll probably smile because they know you’ve done your homework. Luna: You know, speaking of homework, a lot of listeners have told us that these pricing insights have actually changed how they shop — saving them real money. If you’ve found value in these episodes, there’s a simple way to keep them ad-free and coming. Lucas: Yeah, it’s buy me a coffee dot com slash fexingo. A couple of dollars a month genuinely covers hosting costs and keeps us independent. No pressure, but it makes a real difference. Luna: And we really appreciate it. Now, back to wine — but let’s zoom out to the broader lesson. Lucas: The broader lesson is that every pricing list tells a story. The order, the spacing, the fonts — all of it is designed to guide your choice. As a buyer, the best defense is to pause, recognize the anchor, and ask yourself: 'What would I pay if I hadn’t seen that first number?' Luna: And as a seller, the lesson is to design your list intentionally. Don’t just throw prices on a page. Use an anchor to make your mid-tier look like the safe, smart choice. Lucas: Exactly. Next time you’re building a pricing page, start with the highest price first — even if you never expect to sell it. It’s your $1,200 bottle of Lafite.