Ben WiseGoogle · Head of Programmatic Media at Google | Speaker | Board Director | Startup Advisor

See how Netflix uses the Decoy Effect in the subscription page (along with every other streamer).

Name: See how Netflix uses the Decoy Effect in the subscription page (along with every other streamer).
Uploaded: 2024-10-03T13:00:45+00:00
Duration: 32 s
Channel: Ben Wise
Description: In this brief newsletter-style video, the speaker introduces the decoy effect—a behavioral economics phenomenon where an unattractive middle option…

3 Oct 2024 · 1 min

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0:32

In this brief newsletter-style video, the speaker introduces the decoy effect—a behavioral economics phenomenon where an unattractive middle option influences consumer choice. Using Netflix’s subscription page as a concrete example, they describe three tiers: a very cheap plan, an expensive premium plan, and a middle-priced plan that is only slightly cheaper than the premium. Although the middle tier is rarely selected, it serves as a decoy that reframes the premium plan as a better value. The speaker encourages viewers to apply this tactic in their own pricing strategies and to share their results.

Chapters

This week's newsletter is all about the decoy effect. Now look at this example. This is the subscription page for Netflix. You've got a super cheap option, you've got the expensive one, then you've got that one in the middle. It's barely less expensive than the top one. Now almost no one picks it, but it still serves an important purpose. The middle option is the decoy. Even if no one chooses it, it changes the frame of reference, and suddenly the most expensive option looks like pretty good value. Give it a try. Let us know how it goes.