How to Use the Decoy Effect to Boost Restaurant Profits
What if I told you a single, slightly “meh” menu item could help you sell more of your premium dishes or drinks—and increase profits in the process? It’s not magic, it’s psychology. And we see it all the time. It’s called the Decoy Effect.
The Decoy Effect works by introducing a less appealing option that makes the higher-priced or higher-value option look like an absolute no-brainer. Customers feel like they’re making a smart choice, and you get a nice little bump in revenue. Everyone wins.
The Decoy Effect impacts our everyday decisions; what trade-offs guests are willing to make and how they change based on a decoy.
Think drinks, dishes, and even combo deals.
Let’s say you offer three drink sizes:
A small for $4,
A medium for $7,
And a large for $8.
If you only had the small and the large, customers might lean toward the small because it feels like the safer, more budget-friendly choice. But the moment you add that medium size at $7—just a dollar less than the large—the large suddenly feels like the best deal on the menu. The medium isn’t there to sell. It’s the decoy. Its entire purpose is to make the large look irresistible
“Why wouldn’t I spend one more dollar for way more drink?”
For example, imagine a steak menu. You’ve got:
A 6 oz. sirloin for $25,
An 8 oz. sirloin for $35,
And a 10 oz. sirloin for $38.
The 8 oz. steak becomes the decoy. It sits there on the menu looking just close enough to the price of the 10 oz. steak that customers think, “For just $3 more, I might as well go big.”
Or picture a burger deal:
The burger by itself is $10.
The burger with fries is $14.
And the burger, fries, and a drink combo is $15.
That $14 option—the decoy—makes the $15 combo look like an incredible value. A dollar more for a drink? “I’d be silly not to!”
This works because our brains love shortcuts. Faced with too many options, we instinctively look for the one that seems like the smartest choice. The decoy creates a contrast that simplifies decision-making, nudging customers toward the option you want them to pick.
The Decoy Effect isn’t about tricking your guests—it’s about helping them feel confident in their choice while gently guiding them to the option that’s best for your bottom line. And the beauty of it is, when done right, they’ll walk away happy because they believe they made the smartest decision.
So, take a closer look at your menu. Where can you add a little decoy magic? That “meh” option might just become your secret weapon for bigger profits.
Dr. Melissa Hughes is a keynote speaker, author, and self-proclaimed neuroscience geek. She is the author of Happy Hour with Einstein, and Happier Hour with Einstein: Another Round. Dr. Hughes combines extensive research in neuroscience, behavioral science, and psychology to help restaurateurs and hoteliers apply science to create exceptional guest experiences.
Learn more at MelissaHughes.rocks.