Popcorn and Pricing - Sales Influence Podcast - SIP 543
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Show Notes
🏷️ Decoy pricing strategy involves placing the middle option closer to the highest-priced option to increase sales of the more expensive item, exploiting the brain's risk-mitigating tendency.
💰 In a National Geographic experiment, offering $7, $6.50, and $3 popcorn options led most people to choose the middle option, but many upgraded to the highest when comparing the 50-cent difference.
Consumer Behavior🧠 The brain's risk-averse nature often leads consumers to choose the middle option when presented with three choices, a tendency exploited by companies like Starbucks and McDonald's.
🔄 Adding a third option to a two-option scenario can significantly shift consumer preferences, as demonstrated in the experiment where a $5 option added to $7 and $3 choices led most to select the middle price.
Sales Tactics📊 To boost sales of premium products, offer three options with the highest price closer to the middle, e.g., $20,000, $17,000, and $10,000 instead of evenly spaced prices like $20,000, $15,000, and $10,000.