Chris Brogan - Anchoring and Social Proof - Influencing Your Audience - I2I

If you pay any attention to the social media space you probably have heard that Chris Brogan - Social Media Consultant and the face in front of (behind?) New Marketing Labs, talked about how much he charges for his services.

$22,000 per day.

I'm guessing there were a few raised eyebrows when that number hit the interwebs but Chris does a great job of walking through the logic of his pricing on his post...

"I charge that much because I don’t want hundreds of takers. I want 2-3 takers a month at that rate."

He then highlights the other ways you can get his thinking at different price points. His day rate is for his undivided and focused attention on the client. His day rate is designed to limit the number of takers.

But this post isn't about pricing or even about consulting fees - it's about influence and how this little bit of information could (probably will) have an effect on the entire social media consulting space.

And if you're smart - a lesson to be learned about setting goals and objectives within your performance programs.

Anchors

The rate Chris quoted puts a number out there for all to see. It's now public. In psychology-speak this is called an "anchor." This means (given Chris's expertise, reputation and results) others who do the same "type" of work will probably see that number as the high end of the spectrum. The "industry" now knows what the limit is. I'm sure there are others, as even Chris points out in his post - Godin, Kawasaki - who may charge more, but we don't know their numbers exactly and it doesn't really matter. We have Chris's number and he's a good point of reference for people at that level, in that space.

Now, assume you're a Social Media Consultant charging $20,000 per day but don't have the reputation and the history of success that Mr. Brogan has - your day rate just got lower. Why would a client hire you for $20K when they can get the best for a few grand more? Your services didn't change. But the anchor for your services did.

Now assume you are a very, very good social media consultant with great references (maybe even Chris himself) but you only charge $1,000 per day. Congrats - you can probably give yourself a big raise. Not that you're doing anything better - just that the anchor for the work you do is now known and you can point to it and say - "hey, I do similar work as Chris and I'm only $10K per day." Your clients may now think your $10K rate looks like a bargain.

That's what anchors do. They provide context for discussion and allow for comparisons.

Social Proof

The other thing this discussion does is create more business for Chris - and all other Social Media Consultants. (This to me is the either the genius of Chris or the best lucky accident in the world.)

The mere fact that Chris sets the bar that high to LIMIT the number of takers communicates:

There are a lot of takers and he needs to limit them. Potential clients are now going to think - "jeez... I better get in on this social media stuff 'cuz there are so many people out there who want this that Chris has to charge a huge number to keep it manageable."
There are a lot of people willing to spend $22k for this stuff so - "I'd better get ANYONE in here to talk about it - even if I can't afford the top guy - I'll take someone who knows something about it - and at $10K it's 50% cheaper."

As I mentioned in my money quotes slide preso in my review of the book Switch:

"In this entire book, you might not find a single statement that is so rigorously supported by empirical research as this one: You are doing things because you see your peers do them."

Chris single-handedly established the price point and the demand in one fell swoop.

Love it.

Your Performance Program

These concepts are important to your performance program and goal setting from this perspective:

The goals achieved in the past are your anchors. Those are the points of reference for your people. If you've set them too low, or too high, they will affect the results of your program. They are either a positive anchor in that they communicate they are achievable or they are negative in that they aren't. Only you know what is doable.
The goals other people have hit in the past show what is possible. They are the social proof that these goals are doable. Allowing others to see the performance spectrum eliminates any confusion on whether the goals are correct, attainable, etc. People are influenced by what other people have done. Your people, just knowing someone else is hitting those levels - will work harder to prove they are part of that club.

In Closing

If you're wondering. No I didn't raise my rate. No it isn't $22,000 per day.

But then again - I'm no Chris Brogan. As he says at the end of his post:

But are you measuring against me? Maybe not a good plan.

Word.