Product Anchoring
Arguably my favorite class this past semester was a course called “Psychology and Economics” taught by Tomasz Strzalecki and David Laibson. Most of what the professors focused on was evaluating supposed rational models of economic behavior of agents in markets. The classical model assumes that humans are completely self-interested and are always optimizing for what’s best for them.
But in reality, this isn’t true. As humans, we don’t really know what we want, and this is reflected in how behave in everyday life. What I loved about this course was that it applied many psychological principles to common financial decisions we face in our lives, from buying insurance to purchasing TVs in a store.
Some of the primary material the teachers hammered on was the highly influential work of Daniel Kahneman and Amos Tversky, notable psychologists who changed the field of economics for the better with their work on decision theory, which is concerned with the choices of influentials under uncertainty.
One particular piece that stuck out to me from Kahneman and Tversky’s work was the concept of heuristics — techniques and methods people use to inform their decisions. They introduced three, but the one that I’d like to speak about in this blog piece is anchoring.
Anchoring is a bias which entails humans relying too much on the first piece of information offered to them when making decisions.
An example from the course is that people tend to donate more money if a solicitor writes a specific recommended amount on the request for donation. This presented information creates a mental heuristic through which a person will make their choice. I’m obsessed with flow and layout of software products and looked to see how some of my favorite brands and startups used anchoring in their on-boarding process.
PillPack, is a pharmacy built from the ground up on the heels of using better technology, data, and design. I love how they use simple anchoring techniques before the call to action for the customer sign up. They list several differentiators and then state, “It only takes 5 minutes!” as opposed to previous pharmacy sign ups which are more extensive.
One thing I enjoy about how Medium uses anchoring is that they offer a “Learn More” button adjacent to the “Get Started” call to action. This is a great way to offer more insight into the product for the curious customer.
The use of anchoring in product design is certainly not a novel concept, but I love to see the interplay of academia and real-world applications. I believe product designers can learn a lot from the field of behavioral economics, as well as vice versa. What do micro-interactions with websites and apps reveal about our ability to make decisions? It’s definitely a fascinating question, and I hope to keep exploring the topic as I continue to learn more and build up skills in the realm of product design.
