You’ve probably noticed that you always (okay, maybe not always, since you’re not a teenager) want what you can’t have. So whether it’s that super cute tunic that you saw in a boutique in Rehoboth and can’t seem to find ANYWHERE else or that last bagel that the lady in front of you just bought, items in short supply somehow magically become more appealing.
Only it’s not magic. It’s science.
If you want to use the psychology of scarcity to boost desire among visitors to your website (not to mention conversion rates), it helps to understand why scarcity works.
Consider the following examples:
Behavioral economists have been especially fascinated (and frustrated) by this phenomenon because scarcity in a market economy indicates a market failure—a failure of supply to meet demand seamlessly. Plus, lines are inefficient since the order of the line doesn’t reflect how much you’d be willing to pay.
But to shoppers and visitors to your website, lines signal value.
The perception of scarcity triggers a deep primal urge within us to increase personal security. When human beings lived in caves, the human mind is automatically programmed to attend to unfulfilled needs to ensure survival. So, when we know something is scarce, we feel compelled to focus on it, and our behavioral response is to obtain more for ourselves.
In the ‘real world,’ long lines signal scarcity. Of course, it’s a little hard to create a line on your website. But you can still create the perception of scarcity.
We’ve all seen the signs designed to create a sense of urgency and scarcity:
“Act now!”
“For a limited time only!”
“Going out of business. Final liquidation sale!”
Scarcity is a standard marketing technique. But few companies manage to get it right. The furniture company that seems to have a going-out-of-business sale every few months isn’t fooling anyone.
You can boost sales of a product or increase conversion rates for services by intentionally limiting the supply available. If you offer free consultations or free coaching sessions, for instance, constraining the supply is easy. You only have time to do so many of these meetings each week. Let people know how many spots are available to create a sense of scarcity. Which reminds me to ask you: Have you signed up for your free website assessment with me yet? There are only two more spots available!
See how that works? It’s like creating a ‘virtual line.’ Alternatively, announce a limit on accepting new customers. Even something as simple as a banner on your website stating “Now accepting new clients” creates the perception that you might not be taking new clients soon. With the limited supply, users will feel like they are getting something exclusive because they are.
Okay, so technically, this is urgency, not scarcity, but scarcity and urgency go hand-in-hand. Creating a sense of urgency explains the whole marketing strategy commonly known as Black Friday. If you want to generate excitement around a new product or service launch, put a time limit on it. And make sure to announce the end as a specific time or date, rather than simply saying “offer available for a limited time only.” Amazon is a master at this with shipping countdowns (see image below). You can follow Amazon’s lead by easily purchase countdown clocks to add to your website from places like Countdown Monkey and Scarcity Builder. WordPress also has a Page Expiration plugin that you could use for landing pages you create. This will influence users on the fence about buying to stop procrastinating, so they don’t miss the deal.
It’s not quite time to start making snarky comments about trendy ways to consume pumpkin spice, but as Q4 approaches, it is time to start building marketing strategies around seasonal offers. Seasonal products and services are also a great way to create scarcity since seasonal items have a built-in time limit. So, for the upcoming holiday shopping rush, have you considered a giveaway that you could offer to first comers? For example, the first 20 salon customers to make an appointment in December will receive a free boar bristle brush. You might also consider the idea of social proof here. Since people are more likely to accept the recommendation of people they trust, leverage that by making it easy for customers to share when they visit your website. And as the holidays approach, put in place a plan to highlight customer behavior on your website and your company’s social media. It’s just another way to create the ‘lining up’ effect.
Using the psychological principle of scarcity can increase sales and generate new interest in your services, but remember that scarcity marketing tactics only work if you develop a strong foundation of loyal customers. So again, scarcity is not magic. It’s science.
Have another great idea for leveraging scarcity for your business?
Post it in the comments below or contact our team at Spring Insight and let us help you put your plan into action.
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