Deceptive Pricing Strategies Employed
Increase Restaurant Profits with the Decoy Effect
In the competitive world of the culinary industry, every edge counts. One effective strategy that can boost your restaurant's profits is the Decoy Effect, a psychological phenomenon that nudges customers towards certain menu items.
The Decoy Effect works by strategically introducing less appealing options, which, in turn, make other, more profitable items appear more attractive. This is not about tricking customers, but about helping them make confident, value-driven choices while subtly guiding them towards items that benefit your bottom line.
To harness the Decoy Effect, consider the following key strategies:
- Attractively Priced Decoy: Offer a premium item at a slightly lower price than an even higher-priced, less desirable (decoy) option. The decoy serves to highlight the value of the premium item.
- Menu Layout: Position the decoy prominently on your menu - often at the top or right side - to capture diners' attention. Place the premium item just below or next to it to maximize appeal.
- Price Differences: Ensure there is a noticeable but not excessive price difference between the decoy and the premium item. A too-small difference may not create enough contrast, while a too-large one may deter customers entirely.
- Combo Offers: Utilize the Decoy Effect within combo meals. Offer a high-priced combo as a decoy, and a slightly less complete yet still premium combo as a desirable alternative.
- Descriptive Language: Use tempting, vivid language for the premium item, while keeping the decoy's description simple or plain. This psychological nudge further steers customers towards your target option.
For example, consider a steak menu offering a 6 oz. sirloin for $25 (a competitor), an 8 oz. sirloin for $35 (a decoy), and a 10 oz. sirloin for $38 (the premium target). Or picture a burger deal: the burger alone is $10, the burger with fries is $14, and the burger, fries, and a drink combo is $15. The $14 option acts as a decoy, making the combo seem like an excellent value.
By intelligently designing your menu to manipulate the Decoy Effect, you can significantly increase the likelihood that guests will choose your most profitable dishes and drinks. To enhance effectiveness, monitor sales data, train staff, and regularly update your menu to keep the effect fresh.
Dr. Melissa Hughes, a keynote speaker, author, and neuroscience enthusiast, specializes in combining research in neuroscience, behavioral science, and psychology to help restaurateurs and hoteliers create exceptional guest experiences. Those interested in her work can learn more at MelissaHughes.rocks.
- Incorporating data-and-cloud-computing tools can help restaurants track and analyze sales data related to the Decoy Effect, allowing for continuous refinement of the menu to maximize guest experience and profits.
- The Decoy Effect strategy, rooted in lifestyle and consumer behavior, can be combined with food-and-drink offerings, creating a harmonious business model that caters to diners and boosts financial performance.
- Leveraging technology and focusing on the guest experience, restaurants can implement innovative solutions to enhance the Decoy Effect, attracting a broader clientele and solidifying their position in the competitive culinary industry.
