
<Image
  publicId="newsletters/decoy-effect-and-your-brain/cover"
  alt="Your dumb brain loves the decoy effect"
/>

Last week, Apple had a press event where they announced updates to their Macbook Pro laptops. They're better, faster, and more power efficient than ever - no surprises there. Since apple started delivering devices that use their proprietary processors, they have been leading the pack in terms of performance and efficiency.

Their computers are exceptional devices, and great for people who want to get work done. But they are also expensive. The new Macbook Pro starts at $1,599, and can go up to a _startling_ $6,899. That's a lot of money for a laptop.

Generally speaking, if you're looking at a Macbook, you're not also looking at a Dell or a Lenovo. This puts apple in an interesting position: when someone is looking to buy a Macbook, they are not comparing it to other companies' products. They are comparing it to other Macbooks.

So, if you've convinced yourself that it's time to buy a new Macbook Pro, you'll find yourself looking at this page:

<Image
  publicId="newsletters/decoy-effect-and-your-brain/macbook-pro-pricing"
  alt="Screenshot of the Macbook Pro pricing page on apple.com"
/>

You're given 3 options: the entry level MBP for $1599, a mid-tier build for $1799, and a high-end build for $1999.

Which one would you choose?

## Three options, but only two choices

If you're shopping on a tight budget, the entry level model might be a no brainer. But if you've got some room to breathe, you might be tempted to go for the mid-tier configuration. It's only $200 more, and you get twice as much storage.

But then... what about the high-end model? For a mere $200 more, you get a more CPU _and_ GPU cores, more than twice as much memory (8GB->18GB), and faster USB ports. Storage does go back down to 512GB, buuuut you can upgrade that, too, if you really want to.

It's a _slippery_ slope. I'm willing to bet Apple sells far more of the top-tier configuration than the mid-tier one.

### This is the Decoy Effect.

The Decoy Effect is a cognitive bias that causes people to have a strong preference between two options, when presented with a third option that is inferior to one of the original options.

Wikipedia explains it like this:

> **The decoy effect** is the phenomenon whereby consumers will tend to have a specific change in preference between two options when also presented with a third option that is asymmetrically dominated. An option is asymmetrically dominated when it is inferior in all respects to one option; but, in comparison to the other option, it is inferior in some respects and superior in others.

In practice, this means that when presented with two options, buyers have a hard time choosing between them. But if presented with a carefully crafted third option, the decision becomes much easier.

For real: giving your customers **more choice** makes it **easier** for them to make a decision.

## The Economist's pricing experiment

Perhaps the most famous example of this is from The Economist. In 2009, they ran an experiment where they offered two subscription options:

<Image
  publicId="newsletters/decoy-effect-and-your-brain/economist-2"
  alt="Two options: web only for $59, or web + print for $125"
/>

In this case:

- 68% of people chose the web-only option
- and 32% chose the more expensive web + print option.

Then, they ran a second experiment, where they added a third option:

<Image
  publicId="newsletters/decoy-effect-and-your-brain/economist-1"
  alt="Three options: web only for $59, print only for $125, or web + print for $125"
/>

With a third option added:

- 16% of people chose the web-only option
- 0% chose the print-only option
- 84% chose the web + print option.

In other words, offering a third (clearly inferior) option _increased_ sales of the top tier dramatically.

### The lesson: product tiers are powerful

This is why almost every SaaS company has multiple product tiers. It's not just to make more money (although that's a nice side effect). Not only do product tiers make it easier to drive more revenue, they also make it easier for your customers to make a decision.

**That's _wildly_ powerful stuff.**

So, for all my friends out there building products to sell to other people: don't undermine yourself by offering a single product tier. Give your customers options, and make it easy for them to choose.

---

## More on the Decoy Effect and Behavioral Economics

- The Decision Lab has a great article called [The Decoy Effect, explained](https://thedecisionlab.com/biases/decoy-effect) which dives further into the psychology that drives consumers to make decisions this way.
- When you're ready to put together a pricing table to present to your customers, Stripe's [Pricing Tables](https://stripe.com/docs/payments/checkout/pricing-table) feature makes it effortless to create a beautiful, effective pricing table. In fact, I used them to mock up screenshots for the economist example above!
- If you're looking for a primer on Behavioral Economics, you can't beat [Predictably Irrational](https://www.amazon.com/Predictably-Irrational-audiobook/dp/B0014EAHNQ/?&_encoding=UTF8&tag=irreverentm04-20&linkCode=ur2&linkId=d8f5a50920edf15e85fc0ba646ea0642&camp=1789&creative=9325), by Dan Ariely.

---

## 💌 From the Tiny Improvements Mailbag

Last week, I asked you to send me the projects that _you're_ working on. Here are a couple of the responses I got:

- Aaron Dodge is working on a [relaunch of his website](https://www.aarondodge.com/). If you're looking for expertise in building a presence on social media, Aaron is your guy.
- My friends at Swishjam have pivoted their business to focus on building a "[better way to unify your customers' data and get meaningful insights](https://swishjam.com/)". It looks promising, and is Open Source, too!

Even more of you replied to let me know that you're working on something, but you're not quite ready to share it yet. I can't say it enough: share your work [early](https://mikebifulco.com/newsletter/no-right-way-to-do-it) and [often](https://mikebifulco.com/newsletter/how-to-know-when-to-publish-your-work). It's the best way to get feedback, to build and audience, and to validate what you're doing.

I'd love to keep featuring your projects in this newsletter. If you're working on something, [hit reply](mailto:hello@mikebifulco.com] and let me know about it!

---

As for me, I just got back from an incredible 2-week vacation to Vietnam and Japan. I have _never_ taken 2 weeks off of work before, and I can't tell you how grateful I am to my team at [Craftwork](https://craftwork.com) for making it possible. I am _beyond_ lucky to work with such an incredible group of people.

I took a ton of pictures during my trip with my trusty Fujifilm x100v. I've been sharing some of them over on [Threads (@irreverentmike)](https://threads.net/@irreverentmike):

<Threads url="https://www.threads.net/@irreverentmike/post/CzRzZEqvrFA" />

If you're on threads, hit me up and say hi!

Until next time...


The Decoy Effect: More options for an easier choice


<Image
  publicId="newsletters/cognitive-load-ux-and-why-you-should-care/cover"
  alt="Cognitive load, UX, and why you should care"
/>

**Cognitive load** is the amount of mental effort required to complete a task. It's something you experience everywhere - in every app you use, every website you visit, and even making your morning coffee. In product design, is something that is often felt but not well-understood, and has a huge impact on both UX and the lived experience of building your product.

In the best case, cognitive load is something that is invisible to the user. When I used to work as a UX designer at Microsoft, I would often say that if I was doing my job right, nobody would realize I did anything at all.

In the worst case, it can be a source of frustration and confusion. In this article, we'll explore what cognitive load is, how it affects UX, and how you can use it to improve your product.

## Types of cognitive load

Cognitive load boils down to three categories: intrinsic, extraneous, and germane.

### Intrinsic cognitive load

**Intrinsic cognitive load** is the basic difficulty of a given task. In other words, the amount of perceived mental effort required to complete a task. Does using your product feel like a breeze, or does it feel like a chore? If the person looking at the product you've designed feels like they're doing their taxes from scratch every time they call up your app, you've got a problem.

Perceived intrinsic load can be reduced by splitting tasks into smaller chunks, or by providing more guidance (or, in 2023, by stapling GPT-4 to your product and calling it a "copilot for XYZ", har har). As a designer, this is your opportunity to shine: how can you make your product feel like a breeze? If you're helping people do something that typically requires domain expertise, make them feel comfortable and confident by communicating in their language. Provide guidance and feedback when they need it, and get out of the way when they don't.

### Extraneous cognitive load

**Extraneous cognitive load** is the amount of mental effort required to complete a task that is not related to the task itself. Most often, this is a factor of design decisions: is the user interface intuitive? Are your fonts tiny? Did you put yellow text on a white background? If you've ever used a product that made you feel like you were fighting against it, you've experienced extraneous cognitive load.

This type of cognitive load can be mitigated by observing peoples' behavior when they use your _thing_, and iterating on your design. Can you provide a clearer hierarchy or structure for the interfaces that your product presents? Often times this is a matter of making your designs simpler - finding an elegant balance between simplicity and functionality is one of the most challenging aspects of design.

### Germane cognitive load

Germane load is the most challenging to describe, and may also be the most important. [Wikipedia's definition](https://en.wikipedia.org/wiki/Cognitive_load#Germane) is deceptively simple:

> Germane cognitive load is the processing, construction and automation of schemas.

In other words, germane cognitive load is the amount of effort that your users spend on building a mental model of the thing you're helping them do. Often times, this means relating your thing to something that's already familiar to them. Here, `schema` is a fancy word for "the shape of the problem you're trying to solve".

At [Craftwork](https://craftwork.com), this is something we've been spending a good deal of time on. We found pretty quickly that most people don't have any mental model for what it should cost to repaint a room. Ask two friends what it costs to paint the same room, and you're likely to get two wildly different answers. This is a problem we're trying to solve for by offering transparent pricing for painting services, and by [providing a simple interface](https://craftwork.com/estimate) for people to get an instant quote for their project. You might be surprised to hear that this is a pretty novel concept in the home improvement space.

## What does it all mean?

The sum of theses three types of cognitive load is representative of how much of a pain in the ass it is to use _some thing_ to complete a task. You've experienced all three of these when you use any app or service. As you build your own product, reflect on your own interface designs, and look for areas to improve on cognitive load.

It's tempting to complete a feature, toss it over the fence to be released, and move on to the next thing -- but if you leave it at that, you're leaving a _ton_ of potential value on the table. Spend some time observing peoples' behavior when they use your product, and make it better. There's always room to improve.

---

## Load up your cognits with some brainfodder

Are you ready to dive in? These are some resources that might help you reduce cognitive load for your product:

- 🐗 We recently started using [Posthog](https://posthog.com/blog/using-posthog) at Craftwork. Self-described as "The Product OS", Posthog has a myriad of features that make it easier to see if your product is working, how well it is working, and what paths people are taking through as they navigate your features. It was a breeze to integrate, and has already helped us make some improvements to our product.

- 🫖 Don Norman's [The Design of Everyday Things](https://amzn.to/3Cgn5XG) is a classic tome on designing things that people will enjoy using. He does a great job of explaining design success and failure using basic objects like teapots and lemon squeezers, which makes it easy to understand how to apply his principles to your own designs.

- 🧑‍🎨 [r/designdesign](https://www.reddit.com/r/designdesign) is a subreddit full of _bad_ design - particularly, design that is over-the-top, just for the _sake_ of design. It's a great place to go if you're looking for examples of extraneous cognitive load.

---

## Noise to signal from me

- 🎙️ I had a chat with [Or Weis from Permit.io](https://apisyouwonthate.com/podcast/permissions-are-the-gift-that-keep-on-giving-with-or-weis-from-permit-io/) about the team his product is building. Often times, permissions, authentication, authorization, and the challenges facing developers building out products for real people.

---

Alright fam, that's all for now - if you've got examples of places where you've noticed cognitive load in your life, I'd love to hear about them -- especially if you've seen interesting ways to improve. Hit reply and let me know!


Cognitive load, UX, and why you should care


Hi there,

I hope you're well.

This week, we saw some particularly disturbing history take place in front of our eyes at the US Capitol building. We're living through a time where facts seem optional, and people are being blinded by what they're told and what they want to see, as opposed to what's actually going on around them.

We're living through a very difficult time, and I think many of us are regularly finding our wits' end. Time and again, I find myself trying to center on kindness and optimism to get through my day. Remember that we all play a part in the bigger picture. It's up to each of us to do our small part to make things better.

Living selfishly pays off in the short term, but will inevitably cause harm to the world around you and the people you care about somewhere down the line.

Today, tomorrow, as you're going about your day, I urge you to be kinder. Be more intentional and more thoughtful with the people around you. The people you're sharing a space with can benefit from a tiny bit of kindness. People you've never met can benefit from a tiny bit of kindness, and certainly you can benefit from a tiny bit of kindness.

The path forward is unclear, but I think that we can get through this together. I'm reluctant to say that we're on the homestretch because I've seen time and again that that isn't the case. But I have my eyes on the hopeful horizon, and I hope you do too.

<Image
  publicId="newsletters/sip-coffee-quickly-act-quietly/cover"
  alt="Photo of a monstera deliciosa plant casting a shadow on a wall behind it"
  caption="Sometimes the light catches things just right."
/>

## What I'm reading this week

I'm making my way through a book called [The Bitcoin Standard](https://amzn.to/3btwyyR). It's more-or-less about the history of money, and the role that Bitcoin has played so far in advancing financial markets around the world, as well as some speculation on what's to come.

I enjoyed the first few chapters, which leaned heavily on history - but have found it harder and harder to get through as the book caught up with modern day. The author has some pretty strong takes on pop-culture that distract from the content of the book... even if they're a bit funny. Imagine being so annoyed by Miley Cyrus that you interrupt an otherwise-informative book to complain about her pop music as it relates to Mozart... what a strange take to put in a book about money.

I'll admit that it's overall the book is bit dense, and leans heavily on a solid basic understanding of some economic and financial terms - but I learned quite a bit by stopping to do so some research in the early chapters of the book. Still I'm 50-50 on recommending this one. If you're really interested in Bitcoin, give it a go - and [tweet at me](https://twitter.com/irreverentmike) if you make it farther than I have 🤣

## Some things you might enjoy

- 🎨 My friends and former colleagues over at Gymnasium are hosting a free webinar on **Accessibility and Inclusive Design** on Jan 21. Make sure to register before the event fills up.
- ☕️ Did you know **coffee tastes better in a quiet environment**?. According to a [study by scientific journal Food Quality and Preference](https://www.eatthis.com/news-how-noise-can-ruin-coffee-flavor/), sipping your cappuccino in your kitchen or a quiet cafe is a measurably better experience than if you're in a noisy room. Fascinating!
- 🌳 If you're in the UK, my friends over at Protect Earth are looking for volunteers to **help plant 500 trees** on the weekend of Jan 23-24. [Register here](https://www.protect.earth/events/planting-at-pantpurlais) if you're available.
- 👩‍⚖️ Current events in the US have been concerning, confusing, and scary for the past few weeks. [Opening Arguments](https://openargs.com/) is self-described as **A legal podcast that helps you make sense of the news.** I've been listening for about 4 years now, and it's helped me make sense of it all, and to understand a bit about what's coming. Give it a listen.

Keep up the kindness, and continue to be excellent to each other. Thanks for reading Tiny Improvements. Talk soon!

Mike


#cognition: 3 posts tagged

The Decoy Effect: More options for an easier choice

Cognitive load, UX, and why you should care

Sip your coffee quietly, act kindly