The Decoy Effect

When a price list has only two options, customers almost always lean toward the cheaper one, even if the other brings the business far better profit. This lesson looks at a little-noticed but remarkably effective behavioral psychology phenomenon in pricing: adding a deliberately designed third option can change how customers decide, because the human brain judges value by relative comparison, not absolute value. The content moves from the core psychological mechanism, through the principles of designing the third option well, to a series of case studies familiar in Vietnam: coffee chain cup sizes, telecom data plans, e-commerce bundles, and local software pricing tables. It also draws the line between transparent persuasion and manipulation that costs you customer trust, with a concrete process for redesigning the pricing table of the product you manage. Great for marketers, product managers, and sales people who want to boost conversion rates without raising their ad budget.