Scarcity is a marketing technique used to urge people to take action now by giving them the idea that they might not have the same opportunity in the future.
You've probably seen examples of scarcity used before:
- Verbiage such as “for a limited time only” or “while supplies last” in advertisements and commercials.
- Infomercials that say if you call within the next 5 minutes, you get a bonus product for free.
- Venues that offer a free gift to the first 500 entrants.
- Products online that are only available for a certain period of time.
- Holiday sales in retail stores at the mall.
The list goes on and on.
As with most marketing techniques, scarcity works because of the way we, as humans, tend to think. Specifically, scarcity works because:
- We hate missed opportunities.
- We give more value to things that are rare or things that we cannot have.
- We love having control over situations.
- We love now.
The truth is, scarcity works—and it works really well.
On the flip side, however, scarcity can also backfire if used incorrectly.
Great Examples of Scarcity Used Online
As many of you know, I frequently recommend a product called Market Samurai, a killer keyword research and SEO competition tool that I use almost every day. They beautifully incorporate scarcity into their sales funnel by offering a huge $50 discount during the first 7-days after downloading the free trial. After those 7-days are up, the price goes back to the original $147.00 and there is absolutely no way to go back and get the $50 off. [Full Disclosure: As an affiliate, I receive compensation if you purchase through this link.]
About 99% of the commissions I receive from this product are from people who purchase at the discounted price, so I can tell that there's a huge sense of urgency to buy the product before the price goes up.
The key thing to note here is that they are very strict when it comes to honoring the price changes. If they weren't, scarcity would be compromised and it would not be as effective in generating sales.
Closing the Doors
Different than Market Samurai, which is a product that can be purchased at any time, many products do better by limiting the amount of time people have to sign up or make a purchase.
It might seem counter-intuitive to “close the doors” and completely cut off sales during those times, however, the limited time period forces people to make a decision, it introduces the idea of exclusivity in the program and it makes it easier to market when the doors re-open, since there are probably a number of people who were unable to get in the first time.
This is the strategy that was used successful for the Niche Site Coaching Program and more recently by Corbett Barr for Traffic School.
Again, the key here is that the doors close when they say they are closing, and they are not opened again until much later. I've seen a few people online re-open the doors to their programs a day or two after they were closed, claiming one reason or another to do so—and people can usually see right through that. It leaves a bad impression for those who followed through and purchased when it was open the first time.
Early Bird Specials
“The early bird gets the worm.”
Another scarcity technique that I've seen used successfully online, which I myself have used a number of times on my LEED Exam site, is the early bird special.
Typically, this is where there's a special discounted price and/or a bonus offered to the first X number of people who make a purchase. Again, the same psychological rules apply here—and it's a great way to reward those who are quick to act.
To take this even further, many people include live updated counts of the offer while it's happening—on the sales page itself (there are scripts that can do this automatically, although manually ever x number of minutes isn't too difficult) and on Twitter and Facebook too. While the number closes in on the limit, it creates an even greater sense of urgency.
By Invitation Only
This is a scarcity model that is illustrated and executed quite brilliantly by Google.
When a new product comes out, instead of opening it up to the public, Google releases it to a small handful of people and give them the power to invite others to join.
They did this with Google Wave, and they did this more recently with Google Plus.
Access is extremely limited at first, and when you're IN you feel like you have power because you can invite whoever you want, and when you're OUT you feel like you're left out of the party—which makes you want it even more.
It works really well, so much to the point that you'll see people begging for invites before they even know what the product is about or how it works.
It would be interesting to see how this scarcity + invite model would work with a paid product, or maybe a free membership site of some kind.
Might be something to think about.
The Best Thing To Do Is…
Incorporate scarcity into your sales strategy one way or another, because it works. Be conscious about what's going on and how your audience will perceive your product when a specific type of scarcity is introduced. If done correctly, the value of your product or offer may actually go up. If done incorrectly and dishonestly, it can hurt you instead.
What are some examples of scarcity that you've come across before? Good examples, bad examples, online or offline?