Why We Don’t Choose the Best, We Choose the Best Compared to the Rest

In marketing, context isn’t just important—it’s everything. The way people perceive value, attractiveness, and desirability is rarely objective; it’s shaped by what they compare it to. This concept is beautifully illustrated in Rory Sutherland’s Alchemy, where he recalls a friend’s remark: "Everyone likes to go to a nightclub in the company of a friend who's slightly less attractive than them."

Pexels / Yaroslav Shuraev

While humorous, this observation reveals a deeper truth about human psychology and decision-making. Our choices are rarely made in isolation; instead, they are influenced by relative comparisons. In marketing, this means that what people buy isn’t just about the product itself—it’s about what they’re comparing it to at the moment of choice.

The Power of Relativity in Marketing

Consumers rarely evaluate products based on absolute value. Instead, they assess them relative to other options. This phenomenon is called the contrast effect, where an item appears more or less attractive based on what surrounds it.

For example, in retail, placing a high-end luxury watch next to a moderately expensive one makes the latter seem like a great deal, even if it’s still pricey. Similarly, real estate agents often show clients an overpriced, unattractive house first, making the next, slightly less expensive house seem like a bargain in comparison.

This principle applies everywhere—from restaurant menus that list an overpriced "premium" dish to make other dishes seem reasonable to fashion brands that use limited-edition, ultra-expensive items to make their regular collections appear more affordable.

Decoy Pricing: The Art of Manipulating Choice

One of the most famous applications of context-driven decision-making is decoy pricing. When given two choices, consumers may hesitate. But introduce a third, slightly worse option that makes one of the original choices look clearly superior, and suddenly, the decision feels easier.

For example, a movie theater might offer:

• Small popcorn - $5
• Large popcorn - $10

Some customers might hesitate. But if they introduce a medium popcorn at $9, suddenly, the large popcorn looks like a far better deal. The medium option serves as a decoy, designed not to sell, but to make the larger option more attractive.

This technique works because people subconsciously compare their options and lean toward the one offering the best perceived value—even if the price hasn’t changed.

Social Comparison: Selling Status and Exclusivity

Brands also use social comparison to drive desirability. Luxury brands like Rolex, Gucci, and Tesla thrive on relative status—people buy them not just for quality but for what they signal compared to others. If everyone owned a Rolex, its desirability would decline. Scarcity, exclusivity, and comparison to “ordinary” brands make luxury products feel more prestigious.

Marketers also tap into FOMO (Fear of Missing Out) by showing limited stock, exclusive deals, or social proof—like "Only 3 left in stock!" or "Join 10,000+ happy customers!"—to influence choices based on what others are doing.

If marketers understand one thing about human behavior, it should be this: people don’t choose based on pure logic, but on comparisons. The attractiveness of a product, service, or even a brand itself depends on what surrounds it.

The key to successful advertising and pricing strategies isn’t just offering a great product—it’s crafting the right context to make it irresistible.

Connect with Us