Nearly every business is built upon the principle of supply and demand. At the most rudimentary level, sellers “supply” to meet the “demand” of the buyers.
Supply and Demand VS Scarcity
Some businesses sell at exactly the right level to meet buyer needs. Others use this principle as a form of motivation for customers. For example, being overstocked often leads to huge sales, as companies try to unload themselves of the burden of having too many of an item that isn’t selling well by selling at or even below cost.
On the other hand, when buyers are looking for an item that is hard to obtain, they are often willing to pay higher prices without a second thought. This concept is called scarcity.
Scarcity VS Scarcity Marketing
From the idea of scarcity comes scarcity marketing. This concept involves enticing customers to purchase items now, rather than waiting or shopping around.
Customers who believe they have to act now will often do so. However, scarcity marketing needs to be done carefully and strategically to ensure customers do not lose trust in your business, or shop around for another seller who has a more abundant supply.
So how do you use scarcity marketing the right way?
Understanding Scarcity Marketing and FOMO
The concepts behind scarcity marketing are purely psychological; therefore, it’s important that business owners use it in a way that doesn’t drive business away. Imagine if every email you received from a business screamed “Last Chance!”
Or every product on a site was noted as “Limited Availability!” You’d start wondering why they never have enough stock, yet seem to still be in business.
When done correctly, scarcity marketing taps into a sensation known as FOMO: Fear Of Missing Out. This is a very real psychological sensation, first noted by Dr. Dan Herman. FOMO is the feeling of regret a customer feels when they don’t purchase something that they wanted.
Nearly everyone has experienced the sensation of “Oh, I should have bought that”. Scarcity marketing works alongside that feeling to urge buyers to “get it while they can”.
That Good Feeling of Being Privileged…
Scarcity marketing also makes buyers feel they are privileged to make a particular purchase. They have received an exclusive offer because they were smart enough to shop at the right time, at the right place.
This sensation has been known to not only override any potential buyers remorse, but makes customers feel victorious about their shopping strategy.
They come out as winners with the product they want, and the fantastic deal is just the cherry on top.
Pass on this feeling in one of your upsells, and you’ll surely get extra sales from the same customer.
What Are Some of the Best Scarcity Marketing Techniques?
To be the most successful, a digital marketer using the scarcity marketing technique should balance the pressure that scarcity brings to the buyer with the pleasure of getting a good deal.
That means that a certain amount of subtlety and finesse are required to receive the desired effect.
One popular option is to add a countdown timer to your site.
There are a few different ways to use a countdown timer to encourage buyers. First, if you’re having a big sale, you can use a countdown timer to show your site visitors how long they have to take advantage of these major savings.
As they watch the seconds tick away, they’ll be anxious to make their purchases before they lose out on any discounts or special offers.
If you want to easily integrate a countdown in your landing pages, you can use tools like Leadpages.
Free Shipping for the Next 24 Hours…
Another option is a rush shipping countdown. This technique is very popular with major online retail venues. This special offer puts just the right amount of pressure on the buyer by offering them expedited shipping, if only they buy now.
You’ve likely seen product description notes to the effect of “Order in the next ten minutes for free two-day shipping” or “for delivery by Monday, buy now”.
This type of countdown encourages customers to buy now so they can receive their product more quickly.
“Low Stock” and “Limited Production” are two terms that business owners can use successfully, but sparingly.
If a buyer notices “only five left” when they are investigating a particular product, they may find themselves more anxious to buy right away than risk losing out entirely.
In the same vein, noting that a product is a “Limited Edition”, or that “Limited Quantities Are Available” not only taps into that sense of urgency, but also that they are lucky shoppers who are buying a one-of-a-kind, unique product.
The Social Proof
Most business owners have heard of social proof. This is the idea that customers want to make good purchases, so they rely on the buying habits and reviews of fellow customers to feel more secure in their spending.
Social proof can actually help boost scarcity marketing. Have you ever noticed a note next to a product such as “5 people have this in their cart” or “60 people have shared this item on Facebook” or “90 people have saved this product as a favorite?”
When customers see that an item is highly desired and popular amongst their peers, it makes them feel more confident about making a purchase.
Read also: Structure of a Sales Page that Converts
Special Offers for Special Occasions
Lastly, consider seasonal offers or holiday specials. These are the types of products, sales, or offers that only come around once a year.
Much like advertising a product as a limited edition, this type of scarcity marketing encourages customers to make a purchase now, because they won’t get the chance again for another year.
In fact, many customers see this as an opportunity to indulge a bit in these offers, as they would rather stock up than lose out.
All customers want to feel that they’re getting the best product for the best price from the best seller.
This is simply the basic concept behind value. But there are a few ways – such as scarcity marketing – that business owners and digital marketers can add a little extra pressure to prevent the sales process from dragging on infinitely.
A fast conversion can lead to more profit, as instant gratification is always more satisfying than shopping around, making decisions, and haggling.
In turn, a satisfied customer is more likely to be a lifelong customer. Therefore, in applying just the right amount of pressure to a customer through scarcity marketing can give them that little extra boost they need towards making that first purchase.