Category Archives: decoys

Volvo tricked me with a decoy

After a few weeks of hunting I bought a new car, lured completely by a decoy. A decoy, in marketing or sales, is when someone offers you a thing knowing full well that thing isn’t really what you want, but will get your attention. The world is full of decoys — $1 appetizers at bars that get you to buy $20 in beer; $7 movie tickets that coerce you to buy $10 in popcorn and candy. A decoy likely put you in your house — Realtors use a classic strategy of showing you a home that needs repairs right before the pristine home they want to unload on you. That “whew, this house is OK!” feeling was completely a psychological setup, but you knew that, right?

The most successful decoy of the past 20 years was likely the New Beetle, released in 1998 with a brilliant redesign by J Mays. VW rode a wave of new sales, but many were Passats and Jettas purchased by consumers who strode onto the lot curious about the cute new bug, then decided they needed something more.

I just did the same thing, lured by a Volvo C30 and discovered an S60 with more power and room, for a few K more. I’ve always considered Volvo one of the most boring brands in the world. Safe. Secure. Yawn. A hot-hatch design got me on the lot to discover the Swedes have been playing turbo catchup to the Germans.

Decoys are a variation of “price framing,” a concept by behavioral economist Richard Thaler that customers are bad at judging value, so marketers must give them a reference point A to react to. A dress marked 50% off, down from $200, refers to a price of “$200” that never really existed — but makes the $100 price point feel so much better. Some decoys are magnets, pulling you into a sales ecosystem to buy something else. Some can be negative, showing what you don’t want so you’ll move over to item B. Decoys cut through the clutter of commercial capitalism by giving us a beacon. They help us fool ourselves into perceiving value, since we now have something to compare that value with.

I wanted something that I didn’t want, then ended up wanting another thing. The Volvo is a rocket and is safe and has room for the kids. I never would have found it without the impulse to chase a cooler design I didn’t need.

Decoys work really well.

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.

Posted on G+.

The Daily’s clever price decoy

Quick, which of the “subscribe now” offers above is a good deal?

Neither. It’s all a game of price decoys from The Daily, Rupert Murdoch’s flashy news magazine designed specifically for the iPad. Decoys are a form of price framing, in which consumers are given a somewhat bad-feeling deal that is meant to steer them to the second-best thing.

Decoys work because most of us want to feel smart, and yet all of us are inherently bad at judging value. Is a leather jacket worth $400? You don’t know … until someone tells you it’s marked down from $650, then it feels great! And if you haggle the price down more to $350, you walk out of the store a self-proclaimed hero. But you just shelled out $350 for a piece of stitched animal skin … perhaps truly worth only $70. When consumers are offered a “better deal than X,” or “20% off Y,” they can more easily satisfy the childish Id’s need to negotiate at every possible turn whether or not that process achieves true value.

Let’s watch how The Daily does it. If you download The Daily’s iPad app, you’ll get to read the magazine for about a week, and then a window pops up warning you, oops, you’re going to have to subscribe in seven days. Two green boxes give two choices:

Option 1: Only 99 cents per week to subscribe! That sounds low, so people bad at math might leap at that. (Bonus revenue for The Daily, cleverly raising rates on the portion of their audience self-selected for low IQs.) Like an ugly house a Realtor shows you before taking you to the house she really wants to sell you, this subscription offer is the price decoy.

Option 2: Only $39.99 a year! This is actually $12 less a year than Option 1, so people good at math will take this as the better offer. A-ha, you think, I’ve outsmarted The Daily, and I will go for Option 2, a better deal!

Of course, the pricing for either option is absolutely arbitrary. The Daily has already gotten you to download the app, and it has no incremental cost to distribute one more copy daily to your iPad, since you are paying for the Wi-Fi or 3G signal that delivers it. But by giving you a choice, The Daily has slowed you down enough to check out each offer, and to try to determine which is the better value. Since one price must be better than the other, you’ll feel good no matter which you pick. Right?

Ben Kunz is vice president of strategic planning at Mediassociates, an advertising media planning and buying agency, and co-founder of its digital trading desk eEffective.