How many times have you bought something because the headline or subject line screams something like this:
“Only 5 Items Left. Get It Now!”
“Lock In This Great Price While You Still Can”
“Up To 50% Off Until January 31st Only”
This is known as scarcity marketing and it is extremely effective when used properly.
THE PRINCIPLE
The principle behind this is known as supply and demand.
If your product is seen as being in limited supply more value is immediately associated with it. This gives buyers the mentality of "if everyone is snapping this up, then I should too"!
In order for this to work effectively your offer has to be positioned correctly in the marketplace. Your end goal is to boost the desire of your customer to purchase your product.
“If your product is seen as being in limited supply, more value is immediately
associated with it.”
POSITION ‘EM!
By positioning your products with scarcity you are giving it more perceived value immediately. You need to show that you had tons of this product in stock and
due to popular demand you only have X number left. This is more effective than telling customers “I only have 25 in stock so you'd better buy now before they are gone!"
Scarcity makes your audiences crave your products more. The basic instinct of humanity is to covet things that they can’t have.
In the latter example the customer doesn't feel a sense of urgency to buy. Your customers are probably of the mindset that you only ordered 25 because you
didn't think more than that would sell. Can you see the difference?
THE TACTICS
One tactic that many online marketers use for selling digital products is to use what is known as a dime sale. This is when they run a sale where the price
increases a set amount after a certain number of sales.
When visitors arrive on the sales page they will be shown a note that says "only 2 left at this price". This adds scarcity to the offer and if they are interested,
they will hit that buy button faster to get the lower price.
Another example is reminding your customers that you only have a certain number of this item left in stock. This could apply to physical items, digital
items or even to ticket sales, if you are selling tickets to an event.
Scarcity doesn’t always work, though. It’s not a silver bullet.
Basically, if people have a higher knowledge of persuasion or are more exposed to scarcity claims, they’re less likely to value a scarce product more.
A study found that “when consumers interpreted scarcity claims as a sales tactic, the positive effect of scarcity claims on product evaluation would be diluted.”
If the scarcity is nonsense and your customers are smart, it’s going to hurt more than help.
Successful marketers will often add scarcity into an offer by including a specific date. Stating that the price will increase to X amount by a certain date can be
extremely effective. This helps to get those who are borderline shoppers and helps to turn them into an actual buyer.
THE CONCLUSION
Adding scarcity is a marketing technique than can really help increase your bottom line. If you haven't tried this tactic yet maybe it is time you did.
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