What is Decoy Effect? How Can I Use it in My Website or Application?

Decoy Effect in Website and Mobile App Sales

Introduction

Every strategy in sales and marketing is meant to beat out other rivals and change the way a customer makes a choice. The Decoy Effect is one of the most important techniques that marketers use. This article will discuss the Decoy Effect and how it may be incorporated into marketing tactics to enhance the effectiveness of sales in mobile apps and websites.

Understanding the Decoy Effect

Definition of the Decoy Effect

To put it simply, people change their views about which of two options they prefer when presented with a third, less appealing option. This is called the decoy effect. People tend to base their choices on relative comparisons rather than absolute values, and this phenomenon takes advantage of that.

Psychological Principles Behind The Decoy Effect

Asymmetrical dominance and contrast are cognitive flaws that are used in the decoy effect. Asymmetrical dominance means that the fake is better in every way than one option but not so much when compared to the other option. People use contrast bias to use the fake as a point of reference, which makes one of the real choices seem more appealing.

How the Decoy Effect Works

Human Decision-Making Process

People naturally want to make decisions that are easy, especially when they have a lot of options. As mentioned above, the decoy effect takes advantage of this trend by giving people a point of reference that makes it easier to make choices. When people have three choices, they often use relative measures to figure out which one is best. When there is a decoy around, the chosen option stands out as the smartest and best choice, which makes it easier to make a choice.

Impact on Perceived Value

The decoy effect also greatly affects value perception. The environment in which decisions are presented often shapes consumers. Using a decoy helps companies change the value perception so one choice seems to be the best one among the rest.

Consider a software company providing three pricing strategies: a basic plan for $10, a decoy plan for $25, and a premium plan for $30. The premium plan seems more desirable because the decoy plan, which gives far less but is somewhat close in cost. Though they might not have thought of it without the decoy, consumers will view the premium plan as a wiser investment.

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Cognitive Biases at Play

The success of the decoy effect is based on multiple cognitive biases. Asymmetrical dominance is one kind of bias in which the decoy is somewhat better than certain alternatives but obviously worse than others. This sets the stage for the aim, the better alternative, to dominate and become the clear choice.

Contrast bias is another kind of bias in which the presence of a decoy produces a clear difference between the choices. This contrast makes the better option readily apparent to consumers. The variations between the decoy and the target option draw attention and help the target to seem much more appealing.

Psychological Comfort in Decision-Making

When people know they might regret a choice, they tend not to make it. As a result of lowering the perceived risk of the choice, the decoy effect makes people feel better. When one choice stands out as clearly the best one, people feel more sure and right about their choice, which lowers their fear of making the wrong one.

Simplifying Complex Choices

In markets with complicated products and services, the decoy effect helps to simplify decision-making. Businesses can help consumers make faster and easier selections by organizing choices in a way that makes one option look better.

Anchoring Effect

The anchoring effect also helps the decoy effect. This is when an initial piece of information acts as a point of reference and affects decisions that are made later. An anchor is something that sets a baseline and makes the goal option look more reasonable and appealing when compared to it.

Implementing the Decoy Effect in Website Sales

Identifying Product Options

To make the decoy effect work well on your website, you should first decide what kinds of goods you want to show off. There should be a decoy, a premium choice, and a basic option. Make sure that each product is different in terms of price and features so that customers can easily compare them.

Here you can see some of our application using Decoy Effect:

Structuring Price Tiers

Set up a pricing system with different levels that includes a fake option (Decoy Option) that costs about the same as your real option but doesn't have as many features. Adding this will make the premium choice look better and more valuable.

Here’s a short example, when selling fruits through a website:

Basic Fruit Package

Price: $5
Contents: 2 apples, 2 bananas, and 2 oranges
Description: A simple selection of fresh fruits for a quick and healthy snack.

Decoy Fruit Package

Price: $12
Contents: 5 apples, 5 bananas, and 5 oranges
Description: A larger selection of the same fruits, but with no additional variety or extras.

Premium Fruit Package

Price: $15
Contents: 6 apples, 6 bananas, 6 oranges, 2 kiwis, and a small bottle of fresh orange juice
Description: A deluxe collection with more variety and a refreshing drink, ideal for a nutritional boost.

Highlighting Key Features

Make sure that the most significant aspects of each product are visible on your website. To show how the basic, decoy, and premium choices are different, use comparison charts. Customers quickly understand the extra value of the premium choice when they have visual aids to help them.

Using Visual Cues

To draw attention to the premium choice, use visual signals like boxes that are highlighted, stars, or badges. Labels like "Best Value" or "Most Popular" can also make the more expensive option look even better.

Popular Items (Porducts), Lazurd App, Developed by TatbiqIT

The below link is the complete blog of Lazurd Project:

Offering Limited-Time Promotions

Offer special deals for a short time on the premium option. This makes the fake choice seem less appealing while making the real option seem more valuable. Additionally, customers may feel pressured or rushed when faced with time constraints, leading to a negative shopping experience.

Bundling Products

Bundle additional products or services with your premium option. For instance, offer a free SEO tool or additional customer support hours with the premium e-commerce software package. This bundling makes the premium option even more attractive compared to the decoy.

For a confectionary website: “You could offer a Basic Sweet Treat Bundle for $10 that includes 5 chocolate bars and 5 lollipops, a Decoy Sweet Treat Bundle for $20 that includes 10 chocolate bars, 10 lollipops, and 5 packs of gummy bears, and a Premium Sweet Treat Bundle for $25 that includes 12 chocolate bars, 12 lollipops, 5 packs of gummy bears, 3 gourmet chocolate truffles, and 2 caramel fudge pieces. This way, you can use the decoy effect to group your sweets on your website. The decoy bundle is priced similarly to the premium bundle but has fewer distinctive features. This makes the premium bundle look like the better deal.”

Customer Testimonials and Reviews

Use reviews and testimonials from happy customers to show how successful and happy users were with the premium option. Positive feedback can have a big effect on the choices that potential customers make.

Implementing the Decoy Effect in Mobile App Sales

Even though you can use many of the fake effect's techniques of the website for the mobile application, the app itself can also use other methods because of its special capabilities.

In-App Purchase Strategies

For mobile apps, the decoy effect can be effectively used in in-app purchase strategies. Offer three tiers of in-app purchases where the middle option (the decoy) is less attractive compared to the highest tier.

For example, if you are selling virtual items in a gaming app:

Basic Pack: $0.99 (100 coins)
Decoy Pack: $2.49 (250 coins)
Premium Pack: $2.99 (500 coins)

The decoy pack is priced close to the premium pack but offers significantly fewer coins, making the premium pack appear as the best value.

Subscription Models

In subscription models, present three options: a monthly subscription, a decoy subscription, and an annual subscription. The decoy subscription could be a quarterly subscription priced close to the annual but offering fewer benefits.

For example, in a fitness app:

Monthly Plan: $4.99/month
Decoy Quarterly Plan: $13.99/3 months
Annual Plan: $49.99/year

The decoy quarterly plan makes the annual plan seem more cost-effective and attractive.

Feature Highlighting in App Stores

When you submit your app to app stores, make sure to stress the premium version's features and benefits over the basic and decoy versions. Show the differences between the choices with images, icons, and lists of features.

Limited-Time Offers and Discounts

Offer limited-time discounts on premium virtual items or services as mentioned in the website part.

Limited-Time Offers in Product card, designed by TatbiqIT

This is the complete blog for Chayyel Project:

In-App Notifications and Pop-Ups

Use pop-ups and in-app notifications to advertise paid items. When compared to the decoy, these notifications can show how the premium things are better and more cost-effective.

Gamification and Rewards

Add game-like elements so that users can choose premium items to win rewards or unlock features. You've already seen that Hamster Kombat has a lot of game-like features. For example, you can add a friend to the app so that you can use a certain feature. You can use Hamster gamification methods in e-commerce for discounts.

User Experience and Feedback

Get feedback from users and look at it to see how well your decoy approach is working. You can keep improving the decoy effect by changing your offers based on what users like and how they act.

Trial Periods and Free Versions

Give away a free trial or a basic version that doesn't have many functions. You can use the decoy effect to draw attention to the extra features that come with paid in-app purchases or services. This will make users more likely to upgrade.

Conclusion

The decoy effect is a strong way to change people's behavior and increase sales. You can improve perceived value and get more sales by knowing the psychological principles behind it and using them in a smart way on your website and mobile app sales. To stay ahead of the rivals, remember to find a balance between persuasion and ethics, try and improve your strategies all the time, and keep up with new trends.

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