How to use a diminished chord in the same way that these songs do:
1. Build your major tonic chord (called “I” in jazz notation)
2. Follow with a diminished triad or diminished 7th chord a half step above your tonic chord (called “bii°” in jazz notation)
3. Finish with a minor chord a half step above your diminished chord (called “ii” in jazz notation)
Leading to a vi chord
Another popular way to use diminished chords is leading into a song’s vi chord (the minor chord built upon the 6th scale degree of the key). This use, similar to the I-ii bridge, takes advantage of the diminished chord’s ability to lead the listener’s ears in a certain direction.
“Stay with Me,” by Sam Smith is a great example of the diminished chord leading to a vi chord. The song is in C major, and the chord progression throughout the song remains A minor (the vi chord), F major (the IV chord), and C major (the I or “tonic” chord). To spice up the chorus, Smith and his co-writers added an Ab diminished chord to lead into the final repetition of the progression. This can be first heard at 50 seconds under the word “darling.”
This is a particularly clever use of the diminished chord—it saves this change to set up the most lyrically important moment of the song: the titular “stay with me” at the end of the chorus. This may seem like a small thing, but the diminished chord is what adds the emotional tension that makes the chorus so powerful. Without it, the song might sound repetitive and bland.