The Decoy Effect In Marketing

Jomicro Blog
What Is The Decoy Effect? 

Know How You're Affected And Influenced To Choose A Purchase Without Really Knowing It.



The Decoy Effect is defined as the phenomenon whereby consumers change their preference between two options when presented with a third option.

In other words, customers are clear that they prefer a cheaper option over the more expensive one. However, they usually change their mind when a third option is introduced.

For the decoy effect to be more effective, the products should be very similar but with slightly different features.

And for it to work, the price difference between the 2 options or products must be less than the others, almost negligible.



How The Decoy Effect Is Used. 

Imagine you’re lining up at a movie cinema to buy some popcorn. You’re pretty hungry.

You have three options to choose from.
Small - $3.00
Medium - $6.5
Large - $7.00

In this scenario, the cheap option will make the expensive one seem to be the best deal. Right?

You don’t really need that whole large popcorn, but you end up buying it anyway, because it’s a much better deal than the medium and small. 
It makes you believe that you're making a better descion.

But usually, in most cases, the brain always tend to go for the medium option.

Key Take-away: Decoy Effect causes buyers to spend and consume more than they need. And with time, this can add up to a big hit on their finances.


How Sportify uses the Decoy Effect.
When it comes to online subscriptions. You can look at Spotify as an example.

Sportify uses this psychology marketing strategy to influence subscribers sighn up for expensive subscriptions. Their offer includes;

•The Individual plan at $9.99

•The Duo plan for two people at $13.99

•The Family plan for six people at $16.99

The small price difference compared to the service provided will make most couples choose the family plan, even if they don’t really need it.



The Psycolology Behind Decoy Effect.

The decoy effect is a psychological pricing strategy where by you will need to offer only 3 options. Including more than 3 options for buyers to choose from will slow down the decision making process.

When they're 3 options, the consumer's mind will directly compare the price and quality of the product.

And as a result, their mental picture on the available options or products will make it clear that the most expensive option is the best deal for them.


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