Decoy pricing is a strategy where you introduce a third, less attractive option to nudge customers toward a higher-priced, more profitable product. The decoy is designed to make another option look like a better deal—even though it may not be the cheapest.
Why it matters for startups
This strategy is a smart way to influence buying decisions without lowering prices. It’s especially useful in tiered pricing models, common in SaaS, subscription services, and product bundles. For startups, it can increase average order value and steer customers toward the most profitable plan.
What’s an example of decoy pricing?
Offering three SaaS plans: Basic: €10/month Pro: €30/month Decoy: €28/month (with fewer features than Pro) The decoy makes the Pro plan look like a much better deal.
Does decoy pricing work for all startups?
It works best if you have at least three pricing tiers and one clear “hero” offer you want to highlight.
How do I test if my decoy is working?
Track conversions before and after introducing the decoy. If more users choose the target tier, it’s doing its job.
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