You're negotiating with a potential client. They throw out a number—$3,000 for a project you'd normally charge $8,000 for. You counter with $7,000. They push back to $4,500. You settle at $5,500, feeling like you've compromised.
What just happened? You fell victim to the anchoring effect, one of the most powerful forces in negotiation. The client's opening bid became a psychological anchor that influenced the entire negotiation, pulling the final price significantly lower than your target.
Understanding and mastering the anchoring effect can transform your freelance negotiations—and your income.
What Is the Anchoring Effect?
The anchoring effect is a cognitive bias where our brains rely heavily on the first number we encounter when making decisions. That initial figure becomes a "reference point" or "anchor," and subsequent negotiations tend to cluster around it rather than diverging significantly.
The research is compelling. In one famous study, judges were asked to sentence a criminal. Before deciding, they rolled dice that determined a suggested sentence. Even though they knew the dice were random, their sentences clustered around the number the dice showed. The random number anchored their judgment.
In freelance work, anchors are much more strategic—but the effect is just as powerful.
Why Anchors Are So Powerful
Several psychological mechanisms make anchors sticky:
- Insufficient adjustment: When presented with an anchor, we adjust away from it, but not enough. We unconsciously assume the anchor is somewhat informed.
- Priming: The initial number primes our brain to consider that range as normal or reasonable.
- Ego involvement: Once we've engaged with an anchor, we develop some psychological commitment to it.
- Fairness perception: Numbers closer to the anchor seem more "fair" or "reasonable" to us.
These mechanisms work whether you're conscious of them or not. Your client who suggests a low price isn't necessarily being dishonest—they may genuinely believe their anchor is appropriate. But intentionally or not, it's pulling your thinking toward a lower number.
The First-Mover Advantage
Here's the critical insight: whoever makes the first offer has tremendous power. They get to set the anchor.
If you're negotiating with a client and they go first with a low number, you're starting from a disadvantage. If you go first with a strong number, they're anchored to your higher figure and will adjust down from there—but probably not as much as if the process had reversed.
This is why confident freelancers often make the first offer. You set the anchor in your favor.
How to Set a Powerful Anchor
Research Your Range First – Before negotiating, know the realistic market value for your work. This gives you confidence to anchor at the high end of reasonable, not just hope.
Lead with Your Best Case – Present a number that represents your ideal scenario. It doesn't have to be outrageous, but it should be ambitious. You're not lying; you're establishing where you'd like to land.
Justify Your Anchor – The more justification you provide for your number, the more legitimate and less arbitrary it feels. "Based on the scope you described, this is a $7,000 project because of X, Y, and Z" is far more powerful than "$7,000."
Use Specific Numbers – $7,500 feels more thoughtful and researched than $7,000. Specific numbers are harder to dismiss as arbitrary and create stronger anchors.
Make the First Move When Possible – If the project timeline allows, propose your rate first before the client can anchor you with a low number.
Defending Against Low Anchors
Sometimes you won't get to set the initial anchor. A client will propose a low number first. What then?
Recognize the Anchor Immediately – The moment you see the number, acknowledge it consciously. "I see they're suggesting $3,000. That's significantly lower than my standard rate." This conscious recognition weakens the anchor's psychological grip.
Don't Accept the Anchor's Frame – Don't negotiate within the space they've established. Instead, reframe the conversation around value and scope. "I appreciate the budget consideration. Let's talk about what's really essential for your goals here. A full project like you described typically requires..."
Introduce a New Anchor – Counter with your own number and explanation. Make it your new reference point. "Projects in this complexity range typically start at $6,500 based on..."
Walk Away if Necessary – The strongest defense against a bad anchor is the willingness to refuse it. If a client's anchor is so low that accepting it would undervalue your work, sometimes the best move is to politely decline the project. This paradoxically strengthens your negotiating position if the client comes back to negotiate seriously.
The Compromise Illusion
Many freelancers feel virtuous when they "split the difference" in a negotiation. If the client anchors at $3,000 and you ask for $7,000, splitting at $5,000 feels fair.
But here's the trap: if the client's $3,000 anchor was artificially low to begin with, the "compromise" still favors them. You're anchoring to their bad anchor rather than your actual value.
The better approach: When you counter, don't split the difference immediately. Let the client make another offer. Often, they'll move closer to your number when you stand firm. You might get $5,500 instead of $5,000—not huge, but meaningful over many projects.
Multiple Anchors and the Package Deal
Sophisticated negotiators sometimes use multiple anchors. For example, a client might anchor the hourly rate low but suggest a long-term contract at that rate (another anchor: duration). Or they anchor the total project price low but want many revisions included.
Counter this by establishing your own anchors for each variable. "The rate for ongoing work is $X per hour, projects like this typically include two rounds of revisions, and the timeline looks like Y weeks." You're creating multiple anchors that work in your favor.
Practical Example: Applying This to Your Next Negotiation
Scenario: A prospect reaches out about a three-month content project. They ask "What would this cost?"
Without understanding anchoring: "It depends on scope. What's your budget?" Now they anchor you with a low number.
With anchoring knowledge: "Based on the scope you described—three months, weekly content pieces, and strategic planning—this typically runs $6,000 to $8,000 depending on specific deliverables. Where does that sit with your planning?" Now you've anchored them to a reasonable range.
The second approach sets the psychological tone for the entire negotiation.
The Ethics of Anchoring
You might worry: "Isn't using anchoring manipulation?" The answer is nuanced. Using anchoring ethically means:
- Being honest about your number and justification
- Not pretending an inflated anchor is your "real" rate
- Being willing to negotiate and adjust based on legitimate scope changes
- Respecting when a client genuinely can't meet your number
Using anchoring unethically would mean lying about your value, refusing all negotiation, or misrepresenting scope. The difference is integrity.
Conclusion
The anchoring effect isn't good or bad—it's just how human psychology works. But knowing how it works gives you enormous power. Set strong, justified anchors. Defend against weak ones. Understand that the first number in the room often determines the outcome of the negotiation.
Master this, and you'll see both your rates and your confidence in negotiations increase significantly.