Adding a less desirable option (a decoy) makes other options more appealing. A decoy can equally be a strategically priced third option that drives attention to the more expensive of the other two options.

Apple use a decoy effectively in their ecommerce

The already premium price tag of Apple’s products makes the decoy effect even more effective. When you look at Apple’s iPod Touch, for double the storage capacity – going  from 16GB to 32GB – you pay $70 extra and get more features, such as a 5MP iSight camera and iPod Touch Loop.

But when you want to double the capacity from 32GB to 64GB, you pay $100 more but you don’t get extra features for it. This makes the 32GB the more desirable option. Only a few would buy the 16GB and even fewer the 64GB.

Photo Credit: Apple
Photo Credit: Apple

Sonoma raised its sales using the decoy effect

When Williams – Sonoma introduced a bread making machine priced at $275, it sold really poorly. So they introduced a premium version that cost twice as much, with just a few little upgrades. The cheaper one sold out because people could see that it was good value in comparison with the other. And so the decoy effect strikes again!

So if you want to sell more of something, give people another option, make it  similar and make it less attractive.

Photo Credit: Williams-Sonoma
Photo Credit: Williams-Sonoma

What is Behavioural Economics?

Behavioural Economics has been around since the 60s. It blends elements of psychology and economics to identify the mental triggers, or bias, nudges and heuristics, that affect the decisions people make.

This blog series is your go-to guide for a snapshot into what these triggers are, and how they can be used in marketing to influence consumer behaviour.

A bit about us

As an agency, influencing behaviours is core to what we do and applying Behavioural Economics to marketing communications is a natural progression. If you are interested in understanding more about how we do this get in touch now.

Find out more about the connection between consumers and behavioural economics in our latest report on the top trends driving consumer behaviour. Download it here.

By Phil Monks

Deputy Creative Director