Decoy Effect on Landing Pages
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Decoy Effect on Landing Pages

Last updated on November 11, 2016 by Fahad Muhammad in Conversion Rate Optimization

Your pricing page is where the action happens.

It’s where your prospects decide whether or not you’re worth your salt. It’s where they take the leap from being visitors to being customers.

Most marketers naively spend very little time optimizing their pricing pages. They believe that just because they’ve divided the page into plans and have added a call to action button, they’ll start seeing a higher conversion rate.

However, this rarely happens.

There’s a lot that goes into designing an effective pricing page. But what if we told you that there’s only one trick you need to know to not only design an effective pricing page, but to get your prospects to choose the plan that you want them to choose.

You don’t have to do any chants or voodoo for this. All you need is some psychological savvy – or more precisely, the decoy effect.

What’s the Decoy Effect?

According to Wikipedia, the decoy effect (or asymmetric dominance effect) is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated.

An option is asymmetrically dominated when it is inferior in all respects to one option, but in comparison to the other option, it is inferior in some respects and superior in others.

In other words, in terms of specific attributes determining preferability, it is completely dominated by (i.e., inferior to) one option and only partially dominated by the other. When the asymmetrically dominated option is present, a higher percentage of consumers will prefer the dominating option than when the asymmetrically dominated option is absent. The asymmetrically dominated option is, therefore, a decoy serving to increase preference for the dominating option.

What does this mean for your pricing page?

To explain the concept in simpler terms, let’s build a hypothetical SaaS company together. Our software creates code-free websites. Let’s call it Better Web. We offer two pricing plans. The Basic plan is $20/month while the Pro plan is $65/month.

With the Basic plan, customers get to build 3 websites along with team integration and office support while with the Pro plan they can build up to 10 websites, get team integration and 24-hour live customer support.

plans2

We naturally want our customers to go for the pro plan, but most of them select the basic plan because they don’t want to spend more money than they have to. Enter the decoy – our Intermediate plan. It’s priced at $58/month and offers customers the option of building five websites with team integration and office support.

plans3

So, what does the introduction of the Intermediate plan do? It forces visitors to realize that the Pro plan is the better plan for them because by paying just $7 more they get to build five more websites and get live customer support.

Who would pass up on that plan? Hardly anyone.

What you’re doing with the decoy effect is pricing one item in such a wild way that the other plans/items start to look pretty reasonable.

Here’s a graphic that explains this concept nicely:

decoy effect image

How do you create your decoy plan?

There are some rules to the decoy game. You need to…

  1. Create at least three choices or price plans.
  2. Intentionally imbalance these plans on price or benefits/features.
  3. Price the decoy closer to the high-priced option.
  4. Make the decoy’s features/benefits only marginally better than the low priced plan.
  5. Make your decoy plan look a little outrageous – that’s really the whole point.

Examples of the decoy effect on pricing pages

The Economist has been utilizing the decoy effect on their pricing plan for quite some time.

This is a snapshot of their old pricing page.

economist

The middle option is the decoy effect. The price is closer to that of the expensive option, and the benefits are only marginally better than those of the low priced plan. The reader then selects the third plan which offers a one-year subscription to both the print and online editions of The Economist.

The Economist’s new pricing page also uses a decoy effect.

economist new pricing

The only logical plan is the “Best Offer” plan that offers customers so much more than what both the other plans do. It almost looks like a double decoy effect to me. Nice work, guys.

The Basecamp pricing page is another example.

basecamp pricing page

The $100/month is the decoy plan. It urges the visitor to go for the $150/month plan, because it gives them unlimited projects for just $50 more.

The Launchlist Pro also uses the decoy effect on their pricing page.

launchlist pro

Notice how much better the Planetoid plan looks next to the Rocketship plan?

The decoy effect is a simple yet effective technique which when used on your pricing pages gets you a lot of sales.

Still have any questions about this technique? Let us know in the comments.

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