Introducing a deliberately unattractive, high‑priced tier is meant to make the middle option look like a bargain, a tactic marketers call the decoy effect. The trick works because shoppers compare options side‑by‑side; the middle tier suddenly appears modestly priced and feature‑rich, drawing demand away from the premium. But the same comparison also reshapes the mental hierarchy: the premium, once the pinnacle, now seems only marginally better than the decoy, eroding its perceived exclusivity.

A product team at a mid‑size collaboration platform rolled out a new “Enterprise‑Plus” tier priced well above the existing “Enterprise” level, advertising extra analytics and dedicated support. Within weeks, the sales engine that had once channeled large contracts into the original Enterprise tier stalled, and the newly minted Enterprise‑Plus struggled to justify its price, leaving the whole top‑segment pipeline thin. When the company later retired the decoy after realizing it confused buyers, the premium tier never recovered its former pull, as customers had already reset their reference point to the lower, more affordable middle tier.

The lesson is that a decoy can be a double‑edged sword: it may boost short‑term conversion, yet it can permanently downgrade the perceived value of the highest tier.