The Psychology of Free Shipping
The famous Economist subscription study showed the following set of options:
SIMILAR ARTICLES & IDEAS:
It happens when consumers change their preference between two options when presented with a third option, or decoy.
The decoy is priced to make one of the other options much more attra...
When consumers are faced with many alternatives, they often experience choice overload that increases anxiety and hinders decision-making.
Consumers try to reduce this anxiety by selecting only a couple of criteria (say price and quantity) to determine the best value for money.
A decoy steers you in a particular direction while giving you the impression that you are making a rational, informed choice.
Consider the price of drinks at a well-known juice bar: a small (350 ml) size costs $6.10; the medium (450 ml) $7.10; and the large (610 ml) $7.50. The medium is a slightly better value than the small, and the large better still. The medium is designed to be the decoy, steering you to see the biggest drink as the best value for money.
If you buy the biggest, was it because you made a sensible choice, or have you been manipulated to opt for bigger than intended?
It is a marketing tactic used to nudge you into purchasing a higher-priced variant of a product or service.
The Decoy effect can be applied in recruitment, polls, elections, or anywhere else ...
A well-designed decoy can shift our decision making between two options as much as 40%.
For example, we are more likely to buy the large glass of juice at the counter when we have been provided with a choice in which the smaller glass is priced only slightly less. We tend to opt for the bigger glass (even if we don't need more juice) as it looks like a bargain.