Adding Scarcity to Your Offers
How many times have you made a buying decision or accelerated your shopping timeline because you were told that there was a limited amount of the item left?
This is known as scarcity marketing and it is extremely effective.
The simple 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”!
A modern version of it is FOMO or Fear of missing out. It all is a psychological tactic that happens in the mind of the consumer.
So how can you use this in your small business?
Positioning Your Offer
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.
In the latter example, the customer doesn’t feel a sense of urgency to buy. You have no proof that these are popular or in demand. 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?
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 of adding scarcity is to remind 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.
On a personal example, I can tell you that I sold more tickets to my workshops on the day before a price increase AND on the day the actual increase happened. Those 2 days out sold the first day and day of almost 2:1.
In many cases, scarcity is used in connection with a discount that’s only available for a limited amount of time, and the focus is on the discount and not the urgency of the offer.
This is one of my pet peeves, as I love a good deal, but hate special weekend discounts at the grocery store (and don’t even get me started with Kohls).
Regardless this is another tactic successful marketers will use that often adds scarcity into an offer by including a specific date. Stating that the price will increase to X amount on a certain date. This helps to get those who are borderline shoppers and helps to turn them into an actual buyer.
In his book, Influence: The Psychology of Persuasion, Robert Cialdini argues that the idea of potential loss plays a role in how we make decisions.
How often have you been more motivated by the prospect of losing something than gaining something of equal value?
Black Friday and FOMO
Another example of Scarcity marketing is Black Friday sales.
People wake up crazy early to get in line for hours in the freezing cold. Why?
So they can get their hands on the newest toy trend that’s on sale for $49.99 before it’s sold out or so they can save hundreds on a TV (actually last year’s models, but don’t tell them that). We know this phenomenon as the fear of missing out (FOMO).
68% of millennial consumers say they would buy something after experiencing FOMO, most often within 24 hours.
No one wants to feel left out, especially if a good deal is up for grabs.
So there are a few examples of how scarcity and FOMO can help you sell more.
Adding scarcity is a marketing technique that can really help increase your bottom line. If you haven’t tried this tactic yet maybe it is time you did. If you are not sure how to apply scarcity to your offering, let’s book some time to talk and help you figure it out.