Knowledge · B2B Sales

Anchoring Effect

Anchoring Effect

📂B2B Sales⏱2-min read📊Hands-on🔗7 related

What is the anchoring effect?

In one line
A cognitive bias in which the first number or piece of information presented becomes an 'anchor' that pulls later judgments and negotiation outcomes toward it.
Bring this topic to your team📚 Related course💬 Ask about training
⚡ Summary in 3 lines
  • The first number becomes the reference point for judgment
  • Why making the first offer in a negotiation pays off
  • Defend with preset benchmarks and a counteroffer

Understanding anchoring means that in negotiation, 'who puts a number on the table first' is not a matter of taste but a tactical decision. Even with the same product, the same cost, and the same people at the table, the final contract value can swing by tens of millions of won depending on which number lands on the table first. That’s why everything in practice becomes part of the design: the order of items in a quotation, the budget line in an RFP, and even an offhand remark at kickoff like "A project this size usually runs around this much."

An anchor’s power comes less from the number itself than from its 'precision' and 'rationale'. KRW 98.4 million (≈ US$73,600) makes a stronger anchor than KRW 100 million (≈ US$74,800): a rounded number reads as a 'rough guess' and invites large adjustments, while a precise figure signals that there is a calculation behind it, which narrows the range of adjustment. The conditions that weaken an anchor are just as clear. The effect shrinks noticeably when the other side has documented its reservation price and market rates in advance, or when three or more competing quotes are on the table. Also keep it distinct from the framing effect. Framing is about whether the same fact is described as a loss or a gain; anchoring is about where you set the starting point of the judgment.

The most common misconception in the field is "Whoever names a number first, and aggressively, wins." When you have less information, going first can actually box you in. If the customer’s budget is KRW 300 million (≈ US$224,500) and sales opens at KRW 150 (≈ US$1) million, your ceiling is fixed at KRW 150 million (≈ US$112,200) the moment you say it. Throwing out two or three times the market rate with no justification is risky too: instead of negotiating down, the other side may walk away and go to a competitor. Buyers make the mirror-image mistake. Putting a budget cap in the RFP up front seems like it would save money, but in practice every proposal comes in right at that cap, and what gets cut is not the price but the implementation scope and maintenance staffing. Knowing about the bias doesn’t make you immune either. A 'fair price' calculated after hearing the other side’s number is already contaminated, so writing down your target and walk-away prices on paper before the negotiation is effectively the only defense.

Training that covers this term · Negotiation & Sales
Recommended courses · Recommended instructors · Quick quote
📚Business Negotiation A to Z4 hours · On-site corporate training · John KimSee the course →📚Stakeholder Management: Building Strategic Alliances Across Internal and External Decision Structures8 hours · On-site corporate training · John KimSee the course →
Instructor John KimJohn KimAuthor of B2B Marketing Design and CEO of Nanum ConsultingInstructor Jaehyuk ParkJaehyuk ParkHands-on instructor in B2B technical sales and AI-driven sales strategy
🧮 Mini quote · Based on instructor fees
About KRW 1.2 million (≈ US$900)2-hour talk · up to 20 people · Korean
Get a quote for these requirements →
💡 In plain English
Just as a ship swings only around the anchor it has dropped, a negotiation tends to move back and forth close to the first number put on the table.
Why it matters in practice
Price negotiations, salary negotiations, purchasing terms: the outcome of almost every negotiation in an organization hinges on the first number. Knowing about anchoring, or not, makes a real difference in your negotiating power.
⚠️ Common misconceptions
There is a misconception that 'logical people don’t fall for anchoring,' but anchoring is an automatic bias that even experts struggle to avoid. The real defense is not knowledge but criteria and procedures set in advance.
Origin and sources

Amos Tversky and Daniel Kahneman established it as the 'anchoring and adjustment' heuristic in their 1974 Science paper, “Judgment under Uncertainty: Heuristics and Biases.” It became widely known through Kahneman’s book Thinking, Fast and Slow.

Source · Amos Tversky & Daniel Kahneman, “Judgment under Uncertainty: Heuristics and Biases” (Science, 1974) · Read the original
An example

Consider a hypothetical case. Company A, an industrial parts maker (450 employees, annual revenue of about KRW 120 billion (≈ US$89,780,000)), had used Company B’s quality-management solution for three years at KRW 180 million (≈ US$134,700) a year. Two months before renewal, Company A’s purchasing manager spoke first and laid down a marker: "Our IT budget was cut by 30% this year. You’ll need to come in under KRW 120 million (≈ US$89,800) for us to even consider it." For Company B’s sales rep, the negotiation began with the other side’s anchor already dropped.

  1. Company B’s sales rep didn’t discuss numbers on the spot. Saying, "Let’s look at the last three years of results before we talk price," they booked the next meeting. Internally, they wrote down a target price of KRW 170 million (≈ US$127,200) and a walk-away price of KRW 152 million (≈ US$113,700) and got the team lead’s sign-off.
  2. At the meeting two weeks later, the sales rep opened with figures compiled together with Company A’s quality team: after adoption, the process defect rate fell from 2.1% to 0.9%, and annual claim-handling costs dropped by KRW 43 million (≈ US$32,200). The rep then moved the reference point: "The value this solution creates is KRW 43 million (≈ US$32,200) a year."
  3. Only then did the sales rep present the renewal quote. Instead of a flat KRW 180 (≈ US$1) million, the quote read KRW 176.4 (≈ US$1) million, broken down by unit price per module, with a rationale for every line: "License KRW 112 (≈ US$1) million, maintenance KRW 41.8 (≈ US$1) million, on-site training KRW 22.6 million (≈ US$16,900)."
  4. When Company A’s purchasing manager held firm, saying, "KRW 130 million (≈ US$97,300) is still our internal limit," the sales rep didn’t chip downward from that number. Instead: "At KRW 130 (≈ US$1) million, we’d have to drop training and on-site support staff, and then we couldn’t respond the way we did during last year’s line expansion." The rep turned the conversation from price back to scope.
  5. They finally agreed on KRW 168 million (≈ US$125,700) a year in exchange for a 3-year contract. That was 40% higher than the KRW 120 million (≈ US$89,800) the purchasing team first put on the table and 93% of the existing contract price, and Company B locked in KRW 504 million (≈ US$377,100) in three-year revenue at once.
Related terms
NegotiationThe process of reaching agreement by finding terms both sides can accept. The point isn’t squeezing on price but 'growing the pie together.'Pricing StrategyHow you decide what to charge for a product or service. Whether you base it on cost, competition, or value shapes your profit.Objection HandlingThe skill of answering customer concerns like 'It’s too expensive' or 'Not right now' with logic and empathy to move the deal forward.Confirmation BiasThe common tendency to seek out and accept only information that fits your existing beliefs or hypotheses, while ignoring or discounting contrary evidence.BATNA & ZOPABATNA is the Best Alternative To a Negotiated Agreement, your best option if talks fail; ZOPA is the Zone Of Possible Agreement, the range both sides can accept. Together they explain where negotiating power really comes from.Cialdini’s 6 Principles of PersuasionReciprocity, consistency, social proof, liking, authority, and scarcity: six principles of influence compiled by social psychologist Robert Cialdini, which underpin sales, negotiation, and marketing messaging.Salary Negotiation & Raise Rate SettingThe process of dividing the company’s raise budget into individual raises based on performance rating and position within the pay band, then agreeing on the result with the employee and finalizing it in the employment contract.
Training linked to this term
📚Business Negotiation A to ZNanum Consulting corporate training · In person / onlineSee the course →
Need in-house training on this topic?
Get a curriculum and quote tailored to your needs right away.
Ask About Training
📚 See the Related Course🗂 All Programs📄 Free Resources🔎 Glossary Home
Last updated 13 Sep 2026 · Reviewed by John Kim

FAQ

Many studies suggest that, when well prepared, the party that makes the first offer and sets the anchor has the advantage. But when you lack information about the counterpart or the market, a hasty first offer can become an anchor that works against you, so the rule is to set the anchor only once you have the evidence to back it up.
The best defense is to set your target price, reservation price, and objective market benchmarks before the negotiation. If the other side’s opening offer is unreasonable, don’t start haggling from that number. Reframe the discussion with a counteroffer that resets the reference point, or by asking them to justify their figure.
No. Research shows that even experts who know about the bias are not fully immune to anchoring. That’s why objective criteria and procedures prepared in advance are a more reliable safeguard than knowledge alone.
Common examples include showing the list price first and then the discounted price, or displaying a premium product first so the next one looks reasonable. In B2B quotes, it’s used by presenting a higher-tier package alongside to raise the reference point.