What is scarcity marketing and should you use it?

Author
Elke Farnworth
Date
February 19, 2021
Category

Have you ever wondered why the last piece of pizza is always so irresistible? I mean it tastes the same as the other 9 pieces and you could be sickly full but there is something about the last piece that hits different.

After debating with my partner who would have the last piece, it got me thinking - what is it about the last one that we all find so damn irresistible?

Well, we can thank our ancestors for this - as humans, we are wired to collect resources; during ancient times our survival depended on it. Whoever had the most food and tools had a greater chance of survival. Today, marketers take advantage of this innate desire to collect, to stockpile. We use such phrases as:

“Only a few sites available at this price.”
“Only 1 available, 16 people are looking at this item”. 
“For a limited time, 20% off”
“It’s back for a limited time only.”
“Out of stock, submit your email to be the first to know when it’s back.”

The problem, though, is many marketers think the discount is the trigger. It’s not. It’s the urgency of the discount. 

In most cases it really is a direct reflection of the stocktake: but it works wonders in closing the sale or obtaining information for the database. 

Our mentality is that if everyone has one, it will add quality to your life,  or conversely, hardly anyone has it, so it is a rare item. The principle is sound - we all want what we can’t have and feel more than a sense of a win and privilege when we have something others don’t. 

It comes down to our very own approach to problem-solving or self discovery that employs a practical method.  It’s not guaranteed to be optimal, perfect or rational but sufficient for reaching an immediate judgement. Simply put, heuristics; "You get what you pay for”, or "if it's popular, it's probably good".

The Strategy

One of the best ways to leverage scarcity is through limited-time offers. Scarcity marketing capitalises on consumer’s fear of missing out. ‘FOMO’ A term often used by millennials but in fact coined by a marketing strategist, Dan Herman.

Fact: a loss can be more painful than gains are pleasurable. Freud's Pleasure Principle states, "A human's innate tendency to seek pleasure and avoid pain, and it’s not hard to see why online shoppers keep bidding while the countdown draws to a close." (source)

Proven methods:

  1. If you’re making a debut, use terms such as ‘pre sale’
  2. Add a countdown to your purchase
  3. Sale price countdowns
  4. Next-day shipping countdowns
  5. Seasonal offers
  6. Low stock EDM's
  7. Limited edition products, colours, benefits
  8. Use numbers that indicate popularity/demand
  9. Showing real-time activity

Final Thoughts

Scarcity is why people perceive limited quantities as more precious and valuable but it’s not a quick fix for lagging sales. If you use it too much or pressure your customers excessively, you’ll end up scaring them away instead. This tactic encourages organic conversation about your brand, helping you increase the value of your product. In saying this, if your product is terrible then consumers aren’t going to come back for more, devaluing your offer before you even advertise it.

April Ford exists to make your quality brand seen as the last piece of the pizza, one worth talking about.

Cheers,

Elke

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