Using The "Decoy Comparison" Strategy To Earn More IM Income

16 replies
Hello All...


I love watching "educational" television. The Discovery Channel, History Channel, National Geographic Channel, etc, are on a lot in my household. I know that watching too much TV isn't good for a variety of reasons, but if I am going to watch it, I choose to watch programs that teach methings like history, science, and himan psychology. I love to learn, and this is one way that I expand my knowledge.

Anyway, there's a show called "Brain Games" that deals with human perception and psychology. There was one episode that really intrigued me, and I saw how it related to internet marketing. Let me share.

At a movie theater, they gave moviegoers two options for popcorn. They could either get a small serving for $3 or a large serving for $7.

Yes, crazy expensive (and realistic) prices for popcorn, right?

Which option do you think most people chose?

It was the $3 option. When they interviewed the moviegoers, they found that most people chose to purchase the smaller $3 tub of popcorn because $7 for a large just seemed to expensive.

Simple enough, right?

So then the researchers changed things up a bit. They added a third option. Moviegoers now had three options to choose from: a small for $3, a large for $7, or a medium for $6.50.

What do you think happened?

A majority of the people starting purchasing the $7 large size tub.

Remember, nothing else changed. All they did was add a new option to choose from. But now, instead of comparing the $3 small to the $7 large option, they were comparing the $6.50 middle tub against the large one.

The introduction of the decoy option had moviegoers thinking "for just 50 cents more, I can get a large tub."

I am not revealing anything revolutionary here. Just shining a light on something that you probably already suspected.

Now, here's the key: how do you use this in your internet marketing pricing strategies?

Pricing options can have a significant effect on profits. Using a "decoy" option may get your potential customers to purchase higher priced products and services if you use the decoy for comparison purposes.

If you have a product or service, you could be generating more income without having to do anything extra except offering buyers another option to choose from.

Much Success,

JoeMack
#decoy comparison #earn #income #strategy
  • I first learned about "decoy" pricing strategies from a fantastic book: Predictably Irrational, which also analyzes a number of illogical human choices when it comes to making purchasing decisions. I strongly recommend that book to any marketer!

    In that book, they explain the following case scenario:
    Picture Walmart, kitchen appliances section.

    They have 2 models of espresso coffee machines: Basic model at $99.00 and Deluxe model at $249.00. Most people go for Basic because they think "aaahhh I don't really need to splurge and go Deluxe for just my daily dose of coffee, it's too expensive, the basic model will serve me well anyway". Therefore, the Deluxe model was scoring very few sales.

    So, in order to get more Deluxe sales, they introduced the Professional model at $499.00. This new higher price point shifts the Deluxe market position from "top-end" to "mid-range". All of a sudden, more and more families buy the Deluxe model as they think "well, I'm not a professional coffee bartender so I don't need to go all the way to Professional, but I don't necessarily need to go for the cheapest option either. I might as well take the safe middle path and go Deluxe".

    They would hardly make any sales for the Professional model, but that was not the goal of that model. Its goal was to work as a "decoy" for the Deluxe, shifting people's attentions (and wallets!) from the Basic model to the Deluxe model - and it worked!
    Anyway, people already try to apply some decoy pricing strategies online. Have you see those pricing tables that highlight one option as "most popular"? Savvy marketers craft those pricing so one specific price level (whichever they get a better margin from) seems the better value of the lot.

    The problem with decoy options is that you need to be very skilled in pricing psychology to "re-direct" your viewers' attention to the specific price level you're interested in promoting.

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  • Profile picture of the author George Wright
    A few years ago there was a WSO that taught how to use buy buttons using this method. Worked like a charm.

    George Wright
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    "The first chapter sells the book; the last chapter sells the next book." Mickey Spillane
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    • Originally Posted by George Wright View Post

      A few years ago there was a WSO that taught how to use buy buttons using this method. Worked like a charm.

      George Wright
      Do you remember the name of that product? I'd like to take a look myself. I'm very interested in this topic
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      • Profile picture of the author Richard Van
        Originally Posted by Anonymous Affiliate View Post

        Do you remember the name of that product? I'd like to take a look myself. I'm very interested in this topic
        I'd also be keen to have a look too. I'm buying the book Bill and Anonymous Affiliate mentioned too.

        This is an excellent thread, I hate those "Thanks for sharing" posts but I genuinely am very glad you shared this Joe.
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        Wibble, bark, my old man's a mushroom etc...

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      • Profile picture of the author George Wright
        Originally Posted by Anonymous Affiliate View Post

        Do you remember the name of that product? I'd like to take a look myself. I'm very interested in this topic
        I'll find it. I only bought it in the first place because Paul Myers recommended it.

        I'll get back ASAP.

        George Wright
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        "The first chapter sells the book; the last chapter sells the next book." Mickey Spillane
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        • Originally Posted by George Wright View Post

          I'll find it. I only bought it in the first place because Paul Myers recommended it.

          I'll get back ASAP.

          George Wright
          Thanks buddy, I await your answer.
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  • Profile picture of the author tpw
    JoeMack: You and I are a lot alike when it comes to what we play on the TV and for the same reasons.

    I saw the episode you are talking about, and I had also seen the Predictably Irrational segment on the topic on YouTube. I had previously seen it discussed in another incredible book that I love reading called, "Unlimited Selling Power: How to Master Hypnotic Selling Skills". Unlimited Selling Power: How to Master Hypnotic...Unlimited Selling Power: How to Master Hypnotic...

    As a marketer, this is this kind of stuff that I find most interesting.
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    Bill Platt, Oklahoma USA, PlattPublishing.com
    Publish Coloring Books for Profit (WSOTD 7-30-2015)
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    • Profile picture of the author JoeMack
      Originally Posted by tpw View Post

      JoeMack: You and I are a lot alike when it comes to what we play on the TV and for the same reasons.

      I saw the episode you are talking about, and I had also seen the Predictably Irrational segment on the topic on YouTube. I had previously seen it discussed in another incredible book that I love reading called, "Unlimited Selling Power: How to Master Hypnotic Selling Skills". Unlimited Selling Power: How to Master Hypnotic Selling Skills: Donald Moine, Kenneth Lloyd: 9780136891260: Amazon.com: Books


      As a marketer, this is this kind of stuff that I find most interesting.
      Human psychology is one of the most fascinating topics, and it seems to affect many other, seemingly unrelated, topics as well, including internet marketing.

      I don't want to come across as doing anything deceptive. Just trying to point out how you can influence human psychology with just a minor change like price points.

      JoeMack

      P.S. Thanks for all the positive feedback guys. It's what makes this place so great.
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  • Profile picture of the author WillR
    Joe,

    Love me a bit of decoy pricing. Been using it for offline services for a long time also.

    http://www.warriorforum.com/offline-...ould-help.html

    In my opinion if you are not using decoy pricing you are most definitely leaving money on the table. Almost every product you are trying to sell should have at least 2-3 different pricing options otherwise you are making it hard for people to evaluate the value of your offer.

    It's much easier to see the value when you have other options to compare it against.

    If you have a product selling at $x then I guarantee you that by adding a second (and maybe third) options that are more expensive but not much better, you can easily get people buying more of your product. It works very well.

    A great reminder for everyone.
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  • Profile picture of the author tjaysen70
    hey man thanks for the post. That was really cool, and I think that the reason it works so that people buy the larger one, is because of what you just said. Hey for just 50 cents more, I can get the bigger popcorn. If you have kids, and you take em to the movie, you understand how this also plays on your thought process.

    But yeah I like how marketing works with numbers, especially when it comes time to pay, or purchase, or invest in product. Having that payment option that breaks a large purchase, like $3000, into 3 or 5 smaller payments. Somehow, seeing the smaller numbers make it seem like you're not spending as much psychologically.
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    • Profile picture of the author JohnMcCabe
      First off, thanks for leaving the "Learning Channel", home of Honey BooBoo among others, from your list of educational channels. Watch more than two minutes of that channel, and you'll feel the IQ points melting away...

      Second, decoy pricing is nothing new. I read a case study for a magazine:

      12 issues of print mag - $12

      12 month website membership - $36

      12 month website membership + 12 print issues - $36

      They sold a few print subscriptions and a few memberships, but ~80% took the dual offer, which was the original offer that fell flat.
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      • Profile picture of the author tpw
        Originally Posted by JohnMcCabe View Post

        First off, thanks for leaving the "Learning Channel", home of Honey BooBoo among others, from your list of educational channels. Watch more than two minutes of that channel, and you'll feel the IQ points melting away...

        I cannot imagine why people watch that drivel... :p
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        Bill Platt, Oklahoma USA, PlattPublishing.com
        Publish Coloring Books for Profit (WSOTD 7-30-2015)
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  • Profile picture of the author Sarevok
    Genius idea.

    Kinda reminds me of the theory of relativity.

    "$7 isn't that expensive for a large.... LOOK OVER THERE see it's $6.50 for a medium!"

    Imagine if Einstein stuck his hands into the marketing realm?

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  • Profile picture of the author George Wright
    Here you go its closed now. However, I think he has it up on click bank.



    http://www.warriorforum.com/warrior-...-equation.html

    George Wright
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    "The first chapter sells the book; the last chapter sells the next book." Mickey Spillane
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  • Thanks George, I appreciate it!
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