Understanding the principle of liking and knowing how to use it in your marketing and on your website can give you an unfair advantage over the competition.
We all want what we can’t have. And we flaunt when we have something others don’t. That’s why zealous Apple fans camp overnight at Apple stores around the world before major iPhone launches. It’s also why certain fashion brands charge tens of thousands of dollars for women’s purses that should cost significantly less. This is the principle of scarcity.
While economics may lay down the foundational laws of supply and demand, marketing can use scarcity to manipulate the variables and win big. Here’s everything you need to know about the principle of scarcity, plus all other important principles and theories that can supercharge your marketing and influence people to buy your products or services.
Research proves that scarcity marketing can be powerful
The psychology of scarcity was famously tested in 1975. Researchers Worchel, Lee, and Adewole wanted to determine desire based on scarcity. Their experiment was simple: they placed two replica cookie jars side by side. They filled one jar with many cookies and the other with only two.
The question: Which cookie would people value more?
Ultimately, the cookie jar with only two cookies was rated as more desirable simply due to their scarcity.
How Your Business Can Use Scarcity Marketing To Increase Sales
Start by strengthening your brand identity
Before we jump into ways to incorporate scarcity tactics into your marketing, you first must make sure you have a strong brand identity.
Before you can create a fear of missing out (FOMO) and buzz around your products, be sure the products are compelling.
Consumers understand that higher quality products take more time and money to produce. As a result, the higher the price, the fewer of those products are sold. This is true with small-batched alcohol, limited-print pieces of art, and high-end vehicles.
But brands with poor brand identities and badly designed products rarely succeed with scarcity marketing. The brands and products have to be compelling too.
Create a niche group of customers
Scarcity marketing thrives on a members-only attitude.
These days most families have an Xbox, but few have the Xbox Elite edition. All Tesla owners drive a Tesla, but few drive the Performance versions of their Model 3, Model S, or Model X. The days of iPhones being only for the elite are gone, but only a small number of people have the highly coveted Red iPhone XR.
This is a form of exclusivity scarcity, which states that the item may not be short on supply, but instead only an elite few are able to acquire it.
Artificially reduce the availability of your product or service
Launching a limited-supply product is an effective way to create buzz. It may seem counterproductive to limit supply, but the buzz created by a lack of supply can significantly boost long-term sales at the expense of lower short-term sales.
Focus on rare and hard to find items
Time-sensitive deals. This tactic works when a customer feels pressure to buy before the deal ends. Online retail super-star Zulily is doing time-sensitive deals right. Their slogan? A New Store Every Day. Most of Zulily’s sales events last a mere 72 hours. Once a sale is done, Zulily moves on to the next exciting product.
Only X left! Remember that cookie jar experiment we mentioned above? Booking.com sure does. In fact, they made a business out of it. Booking.com bets money on the fact that it’s very likely most people have tried booking hotel rooms only to find no vacancy. By highlighting how many rooms are left, Booking urges people to purchase right away. Letting your clients and prospects know how limited your stock is can be enough to push them over the purchasing fence.
Quick shipping messages. One tactic used by market leader Amazon involves shipping messages. By alerting the customer about shipping availability if ordered right away, Amazon guides the consumer to buy immediately (or risk not being able to get it if the stock is depleted).
Countdown timers. When you have items for sale, adding a countdown timer can be more effective than simply an end of the sale date.
Use these scarcity tactics to boost conversions
Lego has made a massive comeback. A popular toy for decades, Lego was able to transition from near bankruptcy in 2003 to uber-successful today.
How did they do it?
Today, Lego uses scarcity as one of their most lucrative marketing tactics. Lego produces high-end, limited-edition sets for expert builders which they label 'hard to find'. These sets range in price and are retired once they sell out. Post-retirement sets can sell for up to 5x the retail price. By creating a sense of urgency to purchase these hard to find sets at retail price, Lego has a sizable following.
What are the core principles of marketing psychology?
There are many important principles, theories, and concepts used in marketing psychology. These include:
- the principle of reciprocity
- information-gap theory
- social proof theory
- and loss aversion marketing
You can research each of these principles, plus dozens of other key principles of marketing psychology, via the links below.
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