In his book, Predictably Irrational, Dan Ariely’s 1st chapter is something every one who is interested in conversion optimization should read. Actually, everyone who buys anything on the Internet (and offline) should read it too. If everyone takes my advice, Mr. Ariely will make a lot of money.

Airely’s experiment proves that we are easily manipulated by the way price options are presented on the Internet (and offline too)

He found that The Economist had 3  subscription options:

1. Web Subscription for $59
2. Print Edition for $125
3. Print and Web Subscription for $125

When faced with these choices students at MIT chose:

• Web Subscription: 16 students
• Print Edition: 0 students
• Print and Web Subscription: 84 students

This makes sense as the Print Only Edition was the worst deal.

However, When Ariely removed the Print only edition you might expect that rational students would make the same choice as no one chose this anyway. Here are the results:

• Web Subscription: 68 students
• Print and Web Subscription: 32 students

Apparently the decoy Print Edition option was added by The Economist to increase revenues. The take away for conversion rate optimizers and consumers is to understand that: How the information is presented can be used to manipulate buyers. We focus on comparing things that are easily comparable. That is why the students tended to compare option 2 and 3 above  – and ignore option 1.

For more information on the concept of relativity read the book and take a look at this video.

One of the most challenging parts of my job is to convince people of the importance of AB, multivariate, and usability testing on their website. Initially, most companies want to focus on getting traffic through SEO and Google Adwords.

For new sites this is understandable–you can’t do AB testing on sites with no traffic.

However, websites with traffic should start multivariate testing immediately. It doesn’t interfere with increasing traffic through SEO or PPC. And it can improve conversions significantly.

Dan Ariely wishes his nurses would have been open to testing procedures.

It is somewhat comforting to know that Internet marketing is not the only area where people are reluctant to test. At the end of Dan Ariely’s fascinating talk about cheating, he tries to convince everyone of the importance of testing by concluding, “Unless we test those intuitions we won’t make things better.”