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The Power of an Irrelevant Option

December 3, 2009

What if you could have significantly more control of the choices other people make?

Think about your life, your work, your business, your relationships. People make choices all the time that affect you, and for the most part, you have absolutely no control over those choices.

However, you often have the power to control the choices that people consider. Maybe you’re suggesting a few movies to your friends for Friday night. Or you’re creating a pricing scheme for your small business (this idea works best with choices that you give your customers).

Dan Ariely of the brilliant Predictably Irrational book and blog created a study where he offered a group of people some choices regarding a magazine subscription. In the first study, he gave them two choices: buy the online version or buy the paper version plus the online version.

Obviously if you’re selling the magazine, you want people to buy the online + print version. But given those two choices, people overwhelming choose the cheaper option.

Now let’s look at what happened when Ariely gave people a third option…the irrelevant choice of just the print version for the same price as the online + print option.

Now everybody wants the version that you want them to want. What’s the difference?

The difference is that irrelevant option. Given the fact that you could get online + print for $125, why would you buy the print-only version for the same price? That question creates a psychological paradox that convinces people to go with the more expensive option. Because once you add that print only version, it’s clear to the consumer that they’re getting a great deal. Online ($59) plus print ($125) should cost them $184. But it doesn’t. You’re offering it to them for $125, effectively saving them $59. Who in their right mind would ignore such a great deal?

This weekend, I’d love for some of you to try out this method of adding an irrelevant option to the choices you give people. So instead of giving someone two similar options–dinner at an Italian restaurant or a Greek restaurant, say–throw in a third option that will make one of those choices irrelevant. Say if you really want to eat Greek food:

  1. Italian restaurant
  2. Greek restaurant
  3. Greek restaurant plus you’ll drive there

By enhancing the Greek option, the person should look less favorably on both the plain Greek option and the Italian option. Thus you’ll get that deluxe gyro you’ve been craving.

Let me know if you give this a try. Have a great weekend!

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13 Comments leave one →
  1. December 3, 2009 10:56 pm

    Wow! Never would have considered this before. Not sure how I’ll apply it in real life, but when an opportunity presents itself, I’ll give it a whirl. I’ll keep you posted.

  2. Rachel Lyons permalink
    December 4, 2009 12:21 pm

    Have you read The Paradox of Choice: Why More Is Less (Barry Schwartz)? This post makes me think of it…and now I am requesting it from the library because I never finished reading it. Also, here is the author in TED talk form: http://www.ted.com/index.php/talks/barry_schwartz_on_the_paradox_of_choice.html

    • December 4, 2009 1:35 pm

      A great talk–I just listened to it while doing some work (until the last four minutes, when I finished working and just watched it). Definitely worth watching, but if you don’t have time, the two lessons are:

      1. Some choice is a good thing, but unlimited choice is not.
      2. The key to happiness is low expectations.

      The first key is really interesting, and I think anyone who is pricing anything online should take note. Eric actually noted this in an e-mail to me the other day–he was looking at my TypeTribe slideshow where I mention that the site recommends a minimum offer of $5 to potential readers. Eric asked me if a I really meant that, because he usually takes the recommendation of a site he’s using. And it’s true. When we shop for an item or choose to give to a charity, how often do we enter our own amount? Hardly ever. We choose the amounts that have been pre-selected for us the vast majority of the time.

      If you’ve ever given to a project on Kickstarter, you’ve experienced this same phenomenon. On Kickstarter, you can give any amount you want to a project. But the only amounts you actually consider are the recommended giving levels. Part of that is because those levels come with specific gifts, but the other part of it is that we don’t want to add more clutter to our lives in terms of choice. We want 5 choices, each available with the click of a button, not a million choices that we have to type in to get.

      This is powerful knowledge for those of you who price things online. You have the power of choosing those five or so levels (prices or giving levels). Use them wisely and responsibly.

      • T-Mac permalink
        December 4, 2009 3:28 pm

        The one caveat I would add (which I think you cover under “use them wisely and responsibly”) is that setting your own $ levels can completely backfire if you vastly overestimate the amount that your audience is willing to pay/contribute. For instance, I’ve never given money to my alma mater because all the choices seem too high for me. There is a fill-in-the-blank, but the the other giving options that are presented make me feel like filling in the blank with a dollar amount that’s about a fourth of the minimum suggested might come across as insulting to them/not worth their time; therefore, I’ve never donated. (Obviously someone is donating, otherwise adjustments would have to be made, but it’s always struck me as odd that the suggestions weren’t in a more palatable range to me.)

        • December 4, 2009 3:36 pm

          That’s a great point. Just today I read an interview on Kickstarter about a guy who gives to many, many different projects on that site. He gives $1 every time, but he noted that there’s rarely a $1 giving option. He doesn’t even want something in return–he just wants to support something that someone else is really passionate about. Although $1 doesn’t add much to the total funds raised, it does raise the profile of the project because you have more supporters (the same theory applies to universities–they become eligible for certain grants if a percentage of alumni from each class give something).

    • Dionne permalink
      December 5, 2009 9:40 am

      Rachel I started to read that book. It’s quite good!

  3. Bob permalink
    December 4, 2009 2:59 pm

    2. The key to happiness is low expectations.

    That notion seems rather Buddhist (though I’m no expert in Buddhism). Have no wants or desires and you’re never disappointed.

    That said, I think it’s useful for me to have wants and desires. If I didn’t, my current profession would probably be “useless lump”.

    To me, a lot of life is learning the balance…how to be satisfied with what is while still working toward more or greater.

    • December 4, 2009 3:06 pm

      Well, I think that’s a bit extreme. Having low expectations is different than having no wants or desires. For example, when I go to a movie, I want it to be good. That’s why I’m going to the movie. But I can go in with really high expectations and usually be disappointed, or I can go in with low expectations and usually be pleasantly surprised. I think giving yourself ample chances to be pleasantly surprised is a decent way to live life.

      I like your message about balance.

    • Dionne permalink
      December 5, 2009 9:42 am

      Amen Bob.

  4. Colleen permalink
    December 4, 2009 5:29 pm

    I’m probably not thinking about this as deeply as everyone else 🙂 but it seems as though I used the irrelevant option theory at work yesterday. We were putting up our Christmas decorations and had a discussion about where to put the Christmas tree. Option 1 = Place it by the front door. Option 2 = Place it by the back door. I threw in Option 3 = Place it by the back door, and I will go to the trouble of taking it all the way down there and decorating it. (Keep in mind that I wanted the tree to go by the back door all along.) Guess which option we chose … Option 3. My added “incentive” must have worked! 🙂

    • December 4, 2009 5:43 pm

      Brilliant! That’s a perfect example. Instead of debating between two options, you made one of them irrelevant and got exactly what you wanted. That’s a perfect example, and I’m impressed by how quickly you applied this principle!

      • Colleen permalink
        December 5, 2009 12:01 am

        Thanks! Little did I know that this theory was at work. And the funny part is that taking care of the Christmas tree is my job every year anyway, so my added incentive was really nothing new…but my co-workers must have thought they were getting a good deal! lol.

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