Ferrari is one of the most desired exotic car brands in the world. While most other brands claim their value by selling more, Ferrari’s psychology is to sell fewer cars and more merchandise. But this isn’t the only strategy they implement – they’re also masters at price anchoring.
Price anchoring is the practice of establishing a price point for a buyer to refer to when making decisions. How this psychology works is often when we buy an item or service for the first time, we tend to rely heavily on one piece of information in our decision-making process – usually the first piece of information we came across. We then unconsciously use this initial ‘anchor’ value as a mental reference point, which influences the choice we make.
Here are some examples of how Ferrari and other companies use this pricing psychology which hopefully will give you inspiration for pricing your products or services:
Highest price first
Anchor the price of the most expensive product or service you offer by listing it first. This order makes the subsequent product or service seem like a bargain. For example
• 1996 Ferrari F50 Manual – $3,950,000
• 2011 Ferrari 599 Fiorano GTO Auto – $1,195,000
• 2019 Ferrari Portofino Auto – $449,500
Listing unrelated products
A research study by Joseph Nunes and Peter Boatwright showed that exposure to higher prices, even for unrelated products can impact people’s willingness to pay for goods and services, for example
• Scuderia Ferrari 2019 men’s team T-shirt by Puma -$90
• Ferrari Pista – $1,088,000
If the Ferrari Pista is unaffordable, your willingness to pay $90 for a Ferrari team T-shirt, although at an inflated price for a T-shirt, seems to be a steal. This is a fantastic strategy for Ferrari – the brand sells more merchandise than cars.
Exposure to any high number
A study done by Rashmi Adaval and Kent Monroe showed that price anchoring also works with any number, regardless of it being a number or a price. For example, comparing the number of fans with an item for sale: • Join 16,000,000 Ferrari supporters on Facebook
• Buy a Speedracer chronographer watch with perforated leather for $420
If your company sells software, you can mention the number of downloads before the purchase price.
Exposure to a quantity limit
Setting quantity limits affects shopping behaviour. Ferrari whet the appetites of buyers and draw in new ones by making most of their cars ‘affordable’ – a subjective term. However, every now and then they toss in a special, limited edition that is available to only a hand-picked few buyers. Their top buyers are rewarded, and potential buyers are intrigued and wooed in by fantasies of getting on “the list” as well.
The LaFerrari Aperta convertible is such a limited run beauty – at an expected production run of only about 200 and setting you back a cool $2.2 million. Super collector, David Lee, wanted one – badly. And to increase his chances, he also ordered four new Ferraris!
David was already the proud owner of a $50 million car collection in a garage brimming with Ferraris. He had cultivated a good relationship with his local Ferrari dealer, visited the factory and attended the world famous, elite Ferrari driving school in Italy. He purchased many of his cars directly from the factory and picked up several vintage ones that he restored and showed at several exclusive concourse events.
Yet, Ferrari said no to him.
I wouldn’t have the effrontery to turn down a clearly important customer like this. However, strategies like this have seen Ferrari’s brand grow. Ferrari’s sales and brand psychology are inspiring – it’s a brand with a fanatical fan base that doesn’t buy advertising and creates demand purely using anchor pricing psychology.