Asymmetric Dominance aka Decoy Theory

Asymmetic what? Asymmetric Dominance. It’s my buzz term of the month. What is it exactly? In short, it’s a decoy theory that has to do with the consumer selection process.

It goes something like this. If you have two products, product A and product B. The introduction of a third product, B, that is asymmetrically dominated in all (or almost all) ways by one of the other options, will shift consumer behavior in what they purchase.

In the marketing world, this can be used to your favor. If you create an intentional “decoy” then you can shift consumer preference from product B to product A.

For example:

A) Hard Drive with 350 GB for $150.

B) Hard Drive with 250 GB for $100.

Now, in this product line up, people will prefer A because it has more hard drive space in GB’s. People will also prefer B because it has a lower price point of $100.

Here’s where asymmetric dominance comes in. If I want to increase the number of consumers buying product A, then I can do that in 1 simple way. By introducing a third option:

C) Hard Drive with 300 GB for $175.

The introduction of a third option (C) that is more expensive than A and B, and has less hard drive space in GB than product A, makes it asymmetrically dominated by product A. Hence, consumer preference to A will go up just because of the introduction of this third option, making it look like the best deal.

Now, there is one exception to this phenomenon. There will also be a % of consumers that will realize that you offering a decoy to try to attract them to one model. And, even with this (very small) % of people that will “catch on” to what you are doing, even some of them will still think that there is a reason to buy A more times than B. If you want to lower this number even more, you can introduce an “X Factor”. The X Factor MUST be a totally irrelevant factor in the decision making process that nobody cares about, but on the same foot, it must be something that can be used as a justification to the consumer. The most common example is by offering a strange color on the dominated option (C in this example) that nobody wants in the first place.

This can be applied to anything from pricing in your ads to pricing on your sales page. Keep in mind that even a Google Adwords ad, people are making a decision where to click. Anytime someone is making a decision and there are many price points and product features available as options then the decoy theory can be utilized.

–Brian

Comments

  1. Awesome. I read about this in Influence by Cialdini.

    Would you be able to give an example of how this might work in a Facebook ad?

  2. The X-Factor is a very interesting concept and one that was new to me. It certainly brings some interesting options to the table. Thanks for sharing!

  3. Right on. Airey wrote about this concept in “predictably irrational” as well…

    Nice post man.

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