Why do we all want things that we can’t have? This is what the scarcity principle is based upon. Creating want for a product or service through limited accessibility. Things that seem rare are perceived to have higher value. Marketing uses this principle often to get customers to buy but there needs to be proof of scarcity, of course. Here are some examples of ways that marketing use scarcity.
1. Limited-time offers: Just as it sounds, these promotions are limited time only with a clear beginning and end date. Can be as sales, discounts, free offerings, exclusive products/services and/or free shipping.
2. Flash sales: Great for letting current customers first to create a sense of rewarding them for their loyalty. These are last minute announcements that are available for a short amount of time.
3. Limited stock: You probably see these often and don’t even realize it. For example, when you add something into your Esty account and below it states, “there are only 5 left in stock to order soon.” This simply shows the number of items that are left in stock.
No matter which way you shake it, the scarcity principle works through creating a sense of urgency that will budge consumers to buy. However, that being said, it does have some drawbacks as does anything. You have to weigh out the pros and cons for your brand to see what the best way to implement the technique will be.
Here are the drawbacks:
1. Can take attention away from products: It’s important to make sure that the customers are happy with the product. If the value of the product is compromised, then it will hurt the brand’s reputation.
2. Causes pressure on consumers: this could push prospective customers away.
3. Won’t always mean your audience will grow: This principle may not work on all people. It taps into a specific type of psychological profile.
4. It can create a sense of trickery: Some see this as a form of dishonesty. Is the product really low in inventory? Let’s hope so because if not, you can lose your loyal customers.
Scarcity marketing can make your brand stand out from the others if done correctly. It gives the impression of popularity or exclusivity. While it’s a great tool to utilize, it’s key to remember not to use it excessively, be overly pushy , not to extend them and create products/services that always deliver.
