Would you donate $180 to a charity you’d never heard of?42-30301030 (2)

I received an interesting letter from a charity recently.  Most charity direct mail encourages me to make a small donation of, say, $15 or $20.  This letter was different.  It asked me for $180.

There is some interesting psychology behind the letter.  Most of us make a decision on whether to respond to charity letters like this:

  • Some of us will always ignore these letters – maybe we give to other charities or maybe we are not in a position to donate.
  • Others are open to donating.  But our donations are guided by the wording of the letter.

Normally, we expect to give a small amount.  But this letter encouraged me to think very differently.  It encouraged me to change the amount that I normally thought of giving.  Will many people donate $180?  Possibly not.  However, I am sure that the charity will receive a very large number of donations that are substantially more than the normal $15 or $20.

It’s a perfect example of price anchoring

Price anchoring is the science behind setting prices.  If we are told that we should pay more, we generally believe it.  That’s why we are prepared to pay more for luxury chocolates, specialty coffees and high value smartphones.

Often the profit margin on these items is substantially higher than lower priced alternatives.  However, we rarely question this:  we are convinced that it is worth paying extra for these items.

Many people feel that price anchoring doesn’t work in the print industry

Print is seen as a commodity sale.  There is plenty of capacity.  Buyers see most printing companies and most printed jobs as being very similar.  They are happy to shop around for the cheapest price.

But that doesn’t mean that there are not some great opportunities for price anchoring in the print industry.

Here’s an instance where price anchoring could have worked extremely effectively

When web to print software was introduced to the industry, there was a real opportunity to increase profits.  There was real value in the software for buyers.  They could have benefitted from:

  • reduced artwork fees
  • improved brand consistency
  • lower ordering costs
  • more efficient stock management
  • improved reporting

Suppliers also had opportunities to make extra charges.  There was a good case for charging for:

  • software licensing
  • implementation
  • artwork templates
  • PDF downloads

So buyers could have been persuaded to pay more for extra value that could be calculated.  But what happened was very different.

The print industry gave this value away for free

Nearly all print companies decided to offer web to print as a free extra service to their customers.  As a buyer, I rarely came across anyone who tried to charge me for using the software.  No value was given to the opportunities.

This mentality has to change if print companies are going to move from being considered commodity suppliers.  In my next article I will present a case study of how one company did change their mentality and have significantly increased profit margins as a result.

In the meantime, if you deal in direct mail, you can start telling your customers about my charity letter.  You can show how price anchoring might help them.

Editor’s Note: This post is part of a larger series on how to effectively increase profit using price anchoring and price valuation selling  :


Matthew Parker has been buying print for over 20 years. He’s had over 1,400 sales pitches from printers. Now he’s using that experience to help printing companies engage with their customers and sell print more profitably.  Find out more about Matthew on his siteDownload his e-book “Ten Common Print Selling Errors And What To Do About Them” for free here, and also check out his latest e-book “How to Use Social Media to Create Warm Prospects” for free here