By introducing a third, strategically priced but less appealing option (the "decoy"), you can manipulate how customers perceive value. A medium popcorn priced close to the large makes the large seem like a much better deal. This proves that value is relative and can be shaped by deliberate choice architecture.
Related Insights
In a study, subtle gray tape lines on a gray carpet—consciously unnoticed by shoppers—steered 18% of them into a target aisle, up from just 4% before. This shows that retailers can use almost invisible environmental cues to powerfully manipulate shopper behavior and store pathing without their awareness.
To encourage better choices, emphasize immediate, tangible rewards over long-term, abstract goals. A Stanford study found diners chose more vegetables when labeled with delicious descriptions ("sizzling Szechuan green beans") versus health-focused ones ("nutritious green beans"). This works with the brain's value system, which prioritizes immediate gratification.
Contrary to the economic theory that more choice is always better, people sometimes prefer fewer options. Removing a tempting choice, like a bowl of cashews before dinner, can lead to better outcomes by acting as a pre-commitment device, which helps overcome a lack of self-control.
Instead of imitating successful competitors' tactics, deconstruct them to understand the underlying psychological principle (e.g., scarcity, social proof). This allows for authentic adaptation to your specific context, avoiding the high risk of failure from blind copying which ignores differences in brand and audience.
The principles influencing shoppers are not limited to retail; they are universal behavioral nudges. These same tactics are applied in diverse fields like public health (default organ donation), finance (apps gamifying saving), and even urban planning (painting eyes on bins to reduce littering), proving their broad applicability to human behavior.
When a new KFC premium product wasn't selling, they doubled the price instead of discounting it. This aligned the price with consumer expectations for a premium item, signaling quality and causing sales to soar. Low prices can imply low quality for high-end goods.
When Nespresso priced a feature-rich coffee machine the same as its basic model, customers grew suspicious. Assuming a hidden flaw in the advanced version, they overwhelmingly purchased the simpler one, showing how price equality can paradoxically devalue a superior product.
The way a price is presented alters a consumer's emotional response, even if the total cost is identical. Breaking a large sum into smaller installments, like Klarna does, makes it feel more manageable and less intimidating, thus boosting sales.
AI analyzes sales, operations, and media data to identify price elasticity across product bands. Brands can then increase prices on premium items where consumers are less sensitive, while keeping prices flat on essentials, thus protecting margins without alienating the entire customer base.
"Anti-delight" is not a design flaw but a strategic choice. By intentionally limiting a delightful feature (e.g., Spotify's skip limit for free users), companies provide a taste of the premium experience, creating just enough friction to encourage conversion to a paid plan.
