Have you ever been a victim of the decoy effect? You may think that you haven’t, but trust me, the majority of people have.
Okay, so here are two options:
- The first – you get a 5-blade razor with one additional blade head for $10
- The second – you get a 5-blade razor with a pack of 10 additional blade heads for $65
Which one would you choose?
Okay, now I’m going to add an option:
- The third option – you get a 5-blade razor with 4 additional blade heads for $50
Which one would you choose now?
I’m guessing you’re going to choose the $65 option because why wouldn’t you?
For another $15, you get 6 more blade heads than the $50 option. 6 more.
That’s going to last a long time, especially if you’re cheap like me and will use the blade until it’s dull like the most boring thing you can think of (country music?).
Another reason why I’m guessing this is because of a specific psychological theory about decoys.
What Is The Decoy Effect?
This psychological phenomenon, which is called the decoy effect, says that when two options are given, people will use preference and logic to make a choice.
But when a third option, one that is less attractive than the more expensive option, is presented, people will tend to select the most expensive one.
The Popcorn Experiment
In 2013, there was an episode of National Geographic’s Brain Games where the host, Jason Silva, ran an experiment to see how the addition of a medium-sized popcorn at an unappealing price would affect consumer behaviour.
So here’s what he did:
For the first group of movie-goers, they were offered two popcorn size options –a small and a large.
The small one cost $3 whereas the large one cost $7. Because of the big price difference, the majority bought the small popcorn.
When asked why they made that decision, most of them said $7 was too much for a bucket of popcorn.
For the second group of movie-goers, however, they were offered three popcorn sizes: small, medium, and large.
Again, the small and large were $3 and $7, respectively. The medium was priced at an unattractive price of $6.50.
However, this time around, the majority of popcorn buyers bought the large one because it was only 50 cents more than the medium bucket.
But why did they make this rationale? Well, the first group only had two options, which caused them to think critically about what they actually wanted.
But with the second group, the medium-sized popcorn allowed them to compare the size differences, and this showed them the value they would gain if they just got the larger option.
How to Use Decoys in Your Ads
The decoy effect is used in a lot of marketing campaigns.
If you have ever supersized a meal at McDonald’s, you’ve fallen prey to the decoy effect.
If you have ever picked the most expensive option for magazine or newspaper subscriptions, you’ve, ding, ding, ding, ding, fallen prey to the decoy effect.
So how can you apply this to your ads?
You just have to offer an option or options that are unappealing.
Make the item or service you want to sell a lot of look like it will offer more value for a more reasonable price with the decoys.
Have you ever been tricked by decoys? Be honest! Think back and try to find a time when you were fooled.