153 people were asked to choose between a 5-star restaurant 25 mins away and a 3-star restaurant 5 mins away. A third decoy restaurant option was then added of 4-stars at 35 mins away.
This decoy shifted preferences from the closer, cheaper restaurant towards the 5-star option.
Determine your target.
What is the product you want to sell more of, next to a lower-margin competing product? Build your decoy product around this with a price or attributes that inadvertently highlight the target's attractiveness.
Don't overwhelm.
Offering too much choice or highlighting too many competing attributes where neither option is clearly more attractive will trigger Analysis Paralysis, making consumers' decision processes more difficult.
How is your target clearly more attractive?
Test different decoy values to optimize the effect.
Huber et al., (2014) suggest that decoys work best when it’s really easy and quick to see the dominant product, when pre-decoy desire is roughly split between target and competitor and when people don’t strongly like / dislike the decoy.
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