RankRaze Technology

How to Increase your Sales using Decoy Effect?

Price is an element of the marketing that plays a very important role.It is one of the first considerations a consumer makes towards choosing a prodyct.Hence , It decides the future and acceptability of the product.To make the consumer choose a more expensive and profitable product, marketers use various digital marketing strategies, one of which is using a special pricing strategy called “The Decoy Effect”. Those who are not aware of how to create a digital marketing strategy – the below sections along with few examples provides a clear explanation.
The decoy effect is the phenomenon by which consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated. In other words, when consumers are exposed to three options in which one of them has a lesser value, they tend to choose the expensive one among the other two options as it seems like it offers the highest value. This digital marketing technique is also referred to as the “Attraction Effect” or “Asymmetric Dominance effect”
The decoy effect makes people believe that one product has more value than another but in reality, they’re just being tricked into getting the expensive one.
Generally, when consumers are left with two options – cheap & expensive, they choose according to their requirement at the moment. But when a third choice, a strategically priced decoy, is introduced the consumers are more likely to choose the expensive one of the other two options. Here’s an example of iPhone 11 pro max:
Here, by default, the first option will be ignored and the consumer will narrow it down to the other two options. The expensive option will look like it offers the highest value when compared with the decoy price. When a consumer has already made his mind about buying a better iPhone, he would go for the expensive one as it offers twice the storage for quite a higher price than the decoy.


Most advertisements of products that we see appear as three options. This is because consumers tend to see the cheapest one as inferior and the high-priced one as highly expensive. This is where the marketers include another option with medium priced value.
Decoy Pricing is a marketing strategy that boosts the sale and increases profit by creating a version of the product just to make the high-priced product seem economical in comparison. The Decoy price is strategized in a way that it has a higher value than the cheaper product and a lower price than the expensive product.
This makes the consumers believe that the combo of ₹85 is more economical when compared with the other two options.


Like we mentioned earlier, the decoy effect influences people by knowing their psychology. It involves three marketing techniques. They are:

Selective Perception

The human mind decides what information it should perceive and it is bias. When the consumer is presented with more than two options to choose, they get easily confused and narrow it down to finally decide on one product just because it looks better or is priced better.

The compromise effect

Compromise effect states that consumers tend to choose products with median values and pricing. When three options of product variants are presented before a consumer, they prefer not to choose the cheaper one because by psychology they feel like it has got lesser value. The high-priced one is considered to be too expensive. And sometimes they feel like the product has features they wouldn’t need so they tend to not choose it either. Therefore, they tend to choose a median product because this type of product has a decent level of quality and will have most of the necessary features.

The attraction effect

The attraction effect is an alternative term for the decoy effect. To understand the attraction effect better, let’s take a look at the example of Airtel Subscription packs for Talktime and data.
Here, the first option does not offer good value so it is easily rejected by the consumer. The second and third are both good options but when you take a detailed look, you’ll realize that the third option has better features like providing 1.5GB data everyday and 100SMS/day for 28days. Whereas, the second option only offers 2GB data and 300SMS for the entire 28days.

Due to this, consumers tend to choose the third option irrespective of its pricing as it has more value than the other two subscription packs.

The ultimate purpose of Decoy effect is to make consumers choose the product variant that is expensive when compared with other options. When a consumer decides to go for the expensive product in the options, there’s a better increase in the sales revenue. This, in turn, increases the profit produced by the product.

Increase in Sales → Increase in Revenue → Increase in Profit

Many large-scale industries and Small and Medium Enterprises (SME) use the decoy effect as their marketing starategy to increase their sales revenue and profit.

For example: Check out how Netflix India offers subscriptions using the decoy effect.

Consumers whose requirements are to watch movies and TV shows just on their mobiles will prefer the first option. Every other consumer will reject that option completely.

When considering the three options that are left, the “Basic Plan” is easily rejectable because it offers almost the same features as the “Mobile Plan” except that you can watch on your TV and laptop but not at the same time.
Now, the options have been narrowed down to the “Standard Plan” and the “Premium Plan”.
 The Standard Plan acts as a Decoy by offering higher features than the Basic Plan at a price that is lesser than the Premium Plan. When a consumer has reached this point in choosing a good subscription, he is more likely to choose the Premium Plan because it offers Ultra HD content and allows you to use four screens at a time while the standard plan only allows 2 screens and HD content.


The decoy effect is scientifically proven marketing strategy to influence consumers towards buying the high-priced profitable product. It can be used in almost every type of business. Implement this strategy in your business and witness for yourself the difference it makes in sales, revenue and profit.

Feel free to connect with us if you want implement similar kind of digital marketing strategies/techniques for your business. We’re always happy to help.

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