Last Updated on September 29, 2023 by Jan Barley
What is The Decoy Effect & How Can it Help You Gain More Business?
Most SaaS companies use the decoy effect in their marketing messages because they understand the power of using behavioural science underpinning choice architecture.
It’s closely related to another bias, the nudging effect, because it engineers our natural inclination to find the best deal.
What is The Decoy Effect?
A decoy is a less attractive option, by comparison, which influences our decision to make a better choice.
For example, in my graphic, let’s look at coaching options:-
- Option 1: A monthly package is £355.00 per session (with not many extras)
- Option 2: 1-2-1 weekly coaching with loads of bonus extras is £311.00 per session
- Option 3: 1-2-1 weekly with bonus extras is £288.00 per session
So, for less than £25.00 extra cost, people get exceptional value from option 2 and at £355.00 for a single coaching session, option 1 appears to be a poor choice.
Make it a Better Offer?
We could make this marketing much more appealing by adding the monetary value of: –
• Bi-weekly live
• Email and Zoom support
• Coaching retreats
• Community access
• Monthly group training
I would also suggest a 30-day guarantee (for option 2 & 3) to cease the contract because we sometimes don’t gel. An early get-out clause makes a coach appear more confident in their service.
Most coaches offer a one-rate service, but if you structure your offer by applying the decoy effect, you increase the chance of (in this example) gaining more clients committed to a one-year package.
Restaurants, cafes, supermarkets, and all businesses selling products and services apply the decoy effect to their advertising and marketing.
Why? Because it works.
I am an SEO Coach and writer helping heart-led small business owners learn how to rank on Google.