I think we can all agree that anchoring affects consumers. It is regularly used in pricing strategies - just think about all those “offer prices” featured alongside a higher sum - the “original price” that’s been scored out.

The evidence for anchoring isn’t just anecdotal. The research stretches back to a 1974 study by Amos Tversky and Daniel Kahneman, who rigged a wheel of fortune so that it landed on either 10 or 64. After inviting participants to spin the wheel, the psychologist questioned them as to the proportion of countries in the United Nations that were African. Estimates were far higher when they’d just seen the wheel of fortune land on 64, even though this clearly had nothing to do with the question.

Is business more rational?

In the B2B setting though, decisions surely can’t be so biased. Professionals are making informed decisions about what will be financially optimal for their companies. These must be fact-based and objectively reasoned decisions, right?

Actually, no. Evidence suggests that behavioural biases affect commercial decision making too. Gregory Northcraft and Margaret Neale, two psychologists at the University of Arizona, ran a study to test the impact of anchoring among estate agents.

Anchoring effects everyone

Participants were asked to value a home in Tucson, Arizona, after receiving a tour of the property and a pack of information. They all received the same information apart from one detail: half were told the list price was $65,900 and half that it was $83,900.

Those who saw the low list price estimated the house’s value at $67,811. In contrast, those who saw the higher anchor appraised the property at $75,190, on average. That’s a difference of over $7,000. A considerable variation considering they were trained professionals.

The study shows that anchoring affects professionals as well as amateurs.

Nor are estate agents the only professionals affected behavioural biases in B2B. Studies have shown cognitive biases affect a wide range of professions, such as anchoring and judges, framing and economists and even confirmation bias and doctors.

An opportunity

While cognitive biases affect amateurs and professional decision makers alike, there is one important difference. Professionals are far more likely to believe in the absolute rationality of their own decisions.

Evidence for this comes from the Northcraft and Neale study, which included amateur subjects – a group of business students – as well as estate agents. Perhaps unsurprisingly, the non-professionals were influenced by the property list price as much as the estate agents. But what is most interesting is that when questioned about their decision processes, more than half (56%) of the students mentioned the anchor – the list price – as one of the factors considered. Only 24% of the estate agents acknowledged this influence.

This suggests that professionals are unwilling to acknowledge any influences that might appear to undermine their expertise. Most communicators take this denial at face value.

What can you do?

Apply the same behavioural biases in B2B settings as you would to consumers, and your competitive advantage will be significant. These biases are underused, but equally effective in professional decision makers as they are consumers.

The Behaviours Agency, are combining their strong creative thinking with insights from behavioural science to develop more impactful and effective ideas for clients in the B2B and B2C worlds and I’m pleased to be working with them as well.

By Richard Shotton

Behavioural Scientist