Deals & Decoys: How To Increase Sales Quickly With This Cool Psychological Trick 🧠💰️

You’re at the movies. A small popcorn is $3, a large is $7. Kind of a tough choice, right?

But then, they throw in a medium for $6. Suddenly, the large seems like the best deal, right? I mean, it’s only a dollar more.

That’s the decoy effect in action. Let’s get into why this works so well, and how you can use it to sell more products and services.

Opportunity Knocks:

The average person blows an extra $5,000 a year on upsells and unnecessary upgrades. Insane, right?

Many smart businesses use this psychological trick to make us spend more.

And you can easily tap into this for your own products and services to boost sales and grow your business.

Mind Games: The Psychology Behind the Decoy Effect – Why it Works 🧠💰️

Ever noticed how a lot of businesses often offer three options? It's no accident.

The third time is the charm. The third option is usually designed to make decision-making easier and nudge you towards spending more.

The decoy effect works by introducing a middle option that makes the higher-priced item seem like a better deal.

In the movie popcorn scenario, that $7 large popcorn looks like a steal because, compared to the $6 medium, it offers way more value for just a dollar more.

So, we find ourselves budging towards the large, even if we didn’t originally intend on eating that much.

We love a good deal. Our brains love a good bargain, and when we compare three options, the middle one makes the most expensive option look like the best bang for your buck.

Popular Businesses That Mastered the Art of the Decoy

Netflix

Netflix nails this with its subscription plans. They offer Basic at $9.99, Standard at $15.49, and Premium at $19.99.

The Standard plan serves as the decoy, making the Premium plan look like a steal because it offers way more features for just a few dollars more.

With the Premium plan, you get Ultra HD and the ability to stream on four screens simultaneously, compared to just one screen with the Basic plan.

This strategy helped Netflix rake in $33.7 billion in revenue in 2023, a 6.6% jump from the previous year​​​​.

By leveraging the decoy effect, Netflix has managed to significantly increase the number of subscribers opting for the higher-priced plans, driving overall revenue growth.

Apple

Apple is the king of using the decoy effect with its iPhone lineups. You’ve got the iPhone 14 at $799, the iPhone 14 Pro at $999, and the iPhone 14 Pro Max at $1,099.

The iPhone 14 Pro is the decoy. It makes the iPhone 14 Pro Max seem like the ultimate deal because for just a bit more, you get all the top-tier features.

This clever pricing trick nudges people towards the Pro Max, boosting Apple’s sales and reinforcing its premium brand image

How to CAPTIVATE with the Decoy Effect

Here’s some simple ways you can start to leverage the decoy effect to boost sales today. 

1. Craft Three Tiers of Temptation —

Basic Option: A no-frills version of your product or service that covers the essentials. This sets a baseline for value and functionality.

Middle Option (Decoy): A step up with a few more features, but priced close to the premium option. This should look like a decent upgrade but not as comprehensive as the premium.

Premium Option: Packed with all the features and benefits, making it the best value. This is for customers who want the top-of-the-line option. This can include larger sizes, bundles, higher quality, and so much more.

2. Make the Premium Perks Pop —

Lay out the additional features and benefits of the premium, top option.

• Use bullet points, comparison tables, or infographics to make it crystal clear.

• For example, if you're offering a premium software package, showcase features like advanced analytics, dedicated support, and extra storage.

• Show how these perks make the premium option worth the extra cost.

3. Make it Look Good —

Show off your pricing options in a clean and attractive way on your website or sales materials.

• Use visuals and layout techniques to highlight the premium option, like using a “most popular” badge or a contrasting color.

• For instance, on your pricing page, use larger fonts or a different color to make the premium option pop.

• This subtle emphasis can guide customers towards the premium choice by making it stand out.

Putting It Into Action

Tonya runs an e-commerce store selling skincare products. She has two core products: a basic moisturizer for $15 and a deluxe moisturizer for $40.

She noticed it was tough to sell the deluxe size, no matter what she tried.

Tonya could use the Decoy Effect to introduce a premium moisturizer for $50, packed with anti-aging ingredients, a slightly larger size, and early access to promotions.

The deluxe moisturizer would become the decoy, making the premium option look like a much better deal with added benefits.

This strategy could help Tonya increase sales beyond the basic version and significantly boost her revenue. Just selling 1,000 more of the premium product could bring in an extra $35,000 compared to only selling the basic version.

In Closing: Keep Them Captivated

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Stay great, captivate, and sell smarter!🧠💰️

Until next time,

Profit Nic