The Contrast Principle functions as a psychological technique, enhancing the attractiveness of your product or service through comparisons with something else. It's akin to presenting a color photo alongside a black and white one. This amplifies the vibrancy of the color photo due to the created contrast with the black & white. The idea is to compare your price to something larger so it doesn’t look so expensive. You may compare your price to the extra profit the client will make or to your competitors or to the much larger costs inherent in the client’s business.
The contrast effect is a cognitive bias altering how we perceive something through comparison, accentuating the disparities between them. This comparison may be explicit or implicit, occurring either simultaneously or at different times. It is applicable to a spectrum of characteristics, spanning from tangible aspects like color and taste to more conceptual traits such as price and attractiveness.
For instance, the contrast effect has the ability to create an illusion where an item seems lighter than its actual weight when positioned against a dark background. Similarly, it can give the impression of an expensive product being more affordable when juxtaposed with a pricier alternative.
A simple example of the contrast effect appears in the image above, where the grey square that’s placed on the light background appears darker than the grey square that’s placed on the dark background, despite the fact that they’re both the exact same color. So what makes it look different? Its the exterior box which makes the difference. When you see at first, which box are you attracted to? The one on the right side is quite visible because the exterior box is quite contrast to the interior. That is contrast effect and this similar concept is being used in marketing.
The decoy effect explains that, when deciding between two options, introducing a third, less appealing option (the decoy) can impact how we view the original two choices. Decoys are termed "asymmetrically dominated" because they are markedly inferior to one option (the target) but only moderately so to the other (the competitor). Due to this characteristic, the decoy effect is also referred to as the "asymmetric dominance effect".
Questions for you:
Which one of the three is a decoy?
Which one of the three are you most likely to buy?
Let us go through some real life examples to understand better.
When you open the menu in a fancy restaurant, the first soup is $21.99 and as you come down the menu the second soup is $ 17.99. The $21.99 soup hardly sells but that helps the $17.99 soup sell more.
Which iphones sell the most? Probably you end up buying a pro or pro max because it is strategically priced and featured. Many people plan to buy iphone 15 but end up buying iphone 15 pro once they visit the apple store. And when you're done buying the Iphone 15 pro, you’re provided with accessories which are way cheaper as compared to the iphone and now you start thinking if I am spending $1000 bucks why not just $100 more?
Every promotion is a trap. Is any retailer going to give you anything for free? There is always a tradeoff between price, feature and value of the product. In most cases when the customer plans to buy a product, he knows his requirements but as soon as he reaches the store, he sees multiple options available. The first thing a contrasting effect does to a buyer is to confuse him and lure him with more benefits/value at an increase of just few bucks. The customer knew his specific requirements when he left his home but now ends up paying more because of that strategically placed contrast effects.
Finally, the contrast effect is a cognitive bias that impacts how consumers perceive the value, desirability, or attractiveness of a product or offer based on its comparison to others. It can be used in conversion marketing to influence consumer decision-making by strategically positioning products or offers to create a contrast that makes them more appealing.
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