Snare That Sale with a Decoy

In a post at the Neuromarketing blog, Roger Dooley talks about staring at a shelf filled with shaving gels and creams, unsure of the actual difference between those labeled "Aloe" and those touting an "Advanced" formula, when a particular can caught his eye. "[It] was identical to several other cans of 'Advanced,'" he says, "but was an inch or two taller and held a couple of ounces more of product. Best of all, it seemed to be the same price as the shorter cans."

Dooley bought the tall can of shaving gel for the sole reason that it appeared to be the best value. And, he argues, this logic helps explain a seemingly counterintuitive method for boosting sales: Offer the "decoy" of an inferior alternative for about the same price as the product you really want to sell.

For empirical evidence, he turns to author Dan Ariely and the book Predictably Irrational. In a study that offered two subscription plans to The Economist (online-only for $59, or print-and-online for $125) nearly twice as many subjects went with the cheaper subscription. With a second group of subjects, however, Ariely included a third print-only option for $125 as a decoy. This time, the vast majority opted for the print-and-online subscription because it seemed to be a bargain. And by adding a less-attractive alternative to the mix, Ariely propelled predicted revenue from $8,000 to nearly $11,500.

Your Marketing Inspiration: "'Relativity' is the key element in decoy marketing," says Dooley. "Our brains aren't good at judging absolute values, but they are always ready to compare values and benefits."

More Inspiration:
Mack Collier: Social Media's Going Corporate
Paul Williams: Making Marketing Manageable: Four Building Blocks
Paul Dunay: Searching Communities and Forums: A Podcast with Twing

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