- Darjan Hren
Ecommerce store owners, designers and marketers are constantly looking for ways to influence consumers’ decisions, drive sales and boost revenue. One of the most effective techniques used in this regard is the decoy effect cognitive bias. This phenomenon is based on the idea that people prefer one option when offered three alternatives – a valuable insight that can be applied to all sorts of situations, from pricing models to product configurations. In this article, we’ll explore how ecommerce store owners, designers and marketers can utilize the decoy effect cognitive bias to win customers and drive more sales.
What is the Decoy Effect Cognitive Bias?
The decoy effect cognitive bias is a phenomenon wherein people make decisions based on relative preferences rather than absolute preferences. This means that people tend to choose one option over another when given three choices instead of two – even if there isn’t a clear preference between them. In other words, adding an additional choice (the “decoy”) makes it easier for consumers to make a decision by providing them with an obvious comparison.
For example, let’s say you are trying to pick between two products: Product A costs 75. When presented with these two options alone, it might be difficult for you to decide which one is better. However, if you add a third product (the decoy) into the mix – let’s say Product C costs $60 – then it becomes much easier for you to pick between the first two options because now you have something concrete to compare them against.
How Can Ecommerce Store Owners Utilize The Decoy Effect Cognitive Bias To Win Customers?
The decoy effect cognitive bias can be utilized in numerous ways by ecommerce store owners when designing their website or pricing model. Here are some of the most effective ways:
1. Offer more than two product/price variations
By offering more than two variations of products or prices, ecommerce store owners create an opportunity for customers to compare different options side-by-side. For instance, they could offer three versions of a single product with small but notable differences such as size or design—this gives customers the chance to compare and decide which version works best for them.
2. Create bundles
Bundles are packages that contain multiple products at discounted prices—similar to how supermarkets package items like chips and soda together at a cheaper price than buying each item individually. Offering bundles allows customers not only save money but also helps them make quicker decisions due to the fact that they can compare various combinations side-by-side (4).
3. Introduce different payment plans
Payment plans provide shoppers with multiple options for making payments such as monthly installments or even pay-as-you-go plans—wherein customers only need to pay for what they use. This allows buyers who may not have enough funds upfront still purchase certain items without having to wait until they have saved up enough money (5).
Conclusion on the decoy effect cognitive bias
In conclusion, using the decoy effect cognitive bias can help ecommerce store owners effectively win over customers by providing them with more options and allowing them easily compare those options side-by-side in order come up with an informed decision quickly. By offering bundles, introducing payment plans and creating multiple variations of products/prices; store owners can capitalize on this powerful technique and increase their revenues substantially!