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Actionable Optimisation

Actionable Optimisation #60: Increase your AOV by increasing the perceived value

 November 9, 2021

By  Customers Who Click

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You’re probably well aware that presenting the customer with too many options will end up confusing them, and confused customers don’t buy.

More is less, right?

It is. But also, get this: if a customer is presented with two similar items to choose from, they’ll most likely choose the cheapest option.

If, however, you were to add a third, pricier option that seems like a no brainer deal compared to the other options… Know that the customer will choose the third option, even if option 1 or 2 can fulfill their needs and they don’t actually need the third option.

Blame the decoy effect, where the third option is used as a decoy to influence a customer’s purchasing decision while they’re having trouble deciding between two products.

Prime example?

When you’re in a supermarket and you can buy 1 for £1.50 or 2 for £2.50 because you see it as saving 50p, while the supermarket sees it as gaining an extra pound.

Or, if you’re a subscription based business and have 3 subscription box options:

Ok, so what makes us choose the decoy offer? It’s all about the perceived value.

Even if options 1 and 2 both fulfill the customer’s needs, the third option is seen as “getting value for money”. If you can buy two cans of baked beans for the price of one, it’s a no brainer you’ll go for the two because it just makes sense. But even if that second can isn’t free, as long as it's cheaper than the first can, customers see it as a great deal, and are more likely to spend more money than initially intended.

It doesn’t matter that you went shopping with the intention of only buying one can (because that’s what you need for today’s lunch), you’ll end up buying two because you know you’ll eventually consume the other can and save some money today.

How can you use the decoy effect for your store?

Think product bundles.What complementary products do you sell that could be bundled together to give the impression of much higher value, without the much higher price tag

The key is to add a high margin product that people may not normally choose to buy, but when positioned properly, adds value to their order. This last bit is crucial, you can’t just add anything to the bundle and expect it to work as a value add.

What other popular examples of the decoy effect do you notice every day?

Customers Who Click


W.Laurenson

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