Are marketers making decisions for you?

Dan Ariely was browsing the internet one day when he came across an ad for the magazine “The Economist”.

There were three options for you to choose from when subscribing:

1. Internet only:?$59/year
2. Print only:?$125/year
3. Internet and print:?$125/year

He had to reread that.

Internet and print were the exact same price as print alone? Why on earth would he select just print? When it came time to decide, his initial choice would have been internet only, but now he was leaning toward an option that was $66 more expensive that he wasn’t even sure he wanted.

What was going on here?

In his book, “Predictably Irrational”, Dan refers to the concept as “The Decoy Effect”. Marketers and salespeople know that humans naturally make comparisons to gauge if something is valuable.

So, knowing this, many will create their advertisements to force you into making comparisons and drawing comparisons that direct you where they want you to go.

When you come across The Decoy Effect, you will be presented with options, including a clearly unfavorable option - the “decoy”- to stimulate a comparison that will subconsciously guide you towards a pre-defined choice.

Dan ran this experiment with a group of 100 MIT students.

1. 16 Students:?Internet only for $59
2. 0 Students:?Print only for $125
3. 84 Students:?Print and internet for $125

Next, he ran the same experiment but removed the decoy. The results should be the same since the one that was removed had 0 choices in the previous experiment.

1. 68 Students (up from 16):?Internet only for $59
2. 32 Students (down from 84):?Print and internet for $125

Let’s look at another example. Let’s say you are on a road trip and you stop at a gas station to grab a coffee. When you get there, you see the small costs $2; the medium is $5; and the large is $6.50.

You don’t really need a large (especially when you think of the lectures you will get from having to stop again to pee), but you end up buying it anyway, because it’s a much better deal than the medium.

How to Avoid It

The toughest part of avoiding a human bias is that they feel rational. Our mind is wired to always look at how they compare to something else.

When you aren’t conscious of what is happening and try to think hard about your decision, it can have the opposite effect. We end up doubling down on exactly what the marketer or sales person wants us to do (and hope they are an ethical marketer but we will save the conversation).

When you are buying something, think about why you are choosing what you are choosing. Are you comparing it to something else? Was something placed on the menu, sales page, etc. specifically designed to make a choice?

You also can choose your preferences ahead of time. If you are buying a new car and you decide that gas efficiently is the most important thing to you, make sure those preferences are clearly established in advanced so you are swayed in a direction you had not planned for.

To making better decisions.

P.S. I have an awesome video of Dan Ariely talking about this. Let me know if you are interested and I will send it over.