Values-First Marketing

Are Honest Urgency and Scarcity Techniques Worth It For Higher Conversion Rates?

• Megan Kachigan • Season 1 • Episode 14

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Is the urgency and scarcity hype just manipulative marketing? We are diving into this debate with perspectives on both sides, specific examples, as well as bringing in the psychology and the hard data on when and whether it works. We are exploring if and how we can use urgency and scarcity without compromising integrity.

First, let me emphasize for clarity that this conversation is about honest urgency and scarcity. Obviously, if it’s false urgency or fake scarcity—that’s NOT okay. Ever. This is something that should go without saying, but I do want to acknowledge these tactics that we have all seen or experienced if you have been in the internet marketing space for any length of time. 

This episode discusses the psychology and the data behind these tactics. We'll also explore whether and how they can be used with integrity. My goal is to provide you with the data, and both sides of the story, so that you can make an informed decision that feels good to YOU.

00:04:00 Acknowledge the widespread use of unethical tactics and explore ethical ways to use urgency and scarcity.
00:08:00 Ethical Use Perspective
00:10:00 Two reasons why some avoid these techniques
00:12:00 Urgency Examples
00:15:00 Scarcity Examples
00:16:30 Psychology Behind These Techniques
00:20:00 What the data tells us

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Welcome to the copywriting for coaches podcast. My name is Megan khachigian, and I am obsessed with having your brand actually sound like you on the internet. We help you write all the things that you've been trying to articulate about your business, but have never been able to put into copy. We're going to go deeper to uplevel your business without adding more to your already full plate. We'll keep it simple and sustainable. Sound like a breath of relief? Let's dive in. Our honest urgency and scarcity techniques worth it for higher conversion rates? Is the urgency and scarcity hype just manipulative marketing. We are deep diving into this debate with perspectives on both sides with specific examples, as well as bringing in the psychology and the hard data on when and whether it works. This episode is inspired by a somewhat recent Facebook post I made that got a lot of passionate responses. I asked my Facebook audience, what do you think about the use of honest urgency and scarcity in your marketing? And you all had some thoughts? I got a ton of responses and figured this needed to be a podcast episode in and of itself. So I wanted to explore if and how we can use urgency and scarcity without compromising integrity. So first, let me emphasize for clarity that this conversation is about honest urgency and scarcity. Obviously, if it is fake urgency, false urgency or fake scarcity, that is not okay, ever. If your countdown timer ends, and the price doesn't go up, that's not cool. If you say it's a live webinar, you better show up live. And if you're offering a special limited time bonuses, then you need to honor that they are indeed only for a limited time. For example, if you say sign up by midnight tonight and get these exclusive bonuses means that those same bonuses should not and cannot still be available the next day. So this is something that should go without saying. But I do want to acknowledge that these tactics that we have all seen or experienced, can feel somewhat pervasive in this industry. And if you haven't been in the internet marketing space for any length of time, you have unfortunately seen or experienced them. And we all have a little bit of maybe some even some lowercase d trauma around these. But I really want to discuss both the ethics and psychology behind these tactics, if and how we can use them appropriately. And explore, really how they can be used with integrity, if that feels good to you. So my goal here is not to take any sides, but really just provide you with the data with both sides of the story so that you can make an informed decision that feels good to you. So using urgency and scarcity techniques, ethically, here's what came up. So I got 24 responses affirming that urgency and scarcity techniques are ethical. Two responses said that they're hard. No. And because it's the internet, there were also a handful of responses that just did not understand the question. So to be clear, if it's false urgency or scarcity that is not actually legitimate, then of course, it is not okay. My question assumes that this statement is honest, if it is honest, is it still a problem to use? That is what we are exploring today. So first, I want to highlight two thoughtful responses I got that got to the heart, my question. The first note is that this is actually a very common technique by major corporations. And before diving into exactly what she wrote. I want to also note that just because this is a common technique, of course, does not necessarily mean that it is okay. This is just an observation that I thought was very poignant. And I'm just laying out the facts here so that you can arrive at your own informed decision. So her perspective was, she said, quote, I think it's interesting. When people have negative thoughts about this, I get it and for sure, some use this in an unethical or misleading way. But it seems like we only apply the standard to small online businesses. major corporations use this all the time, and we don't get mad at them for it. Maybe it's for sale or limited time discount or get x if you buy y by a certain date. And that seems to be fine. Another a second helpful response said basically her point was like, well, it's smart, and it's helpful. So we didn't see the problem. So she said truthfully, it is a smart business. Sure, in an ideal world, you wouldn't need to do any of that to get people to buy. But even the best offer can be aided by a little bit of urgency and or scarcity. It helps the buyer focus and make a decision rather than being distracted by all the other things or having her hemming and hawing. I also think that when you do this well it is good for both the buyer and the seller. The buyer wants to feel like they got a good deal. And if done poorly, you leave people feeling manipulated, which is not what you want to go for. I feel like I thought got cut off there but I'm just reading reading from a The quote that was left on the as comment. Okay, so, again out of the 24 responses, or sorry, there were somewhere around 40 responses 24 of them supported the use of urgency and scarcity tactics. So let's get into why why do business owners use these tactics and techniques. So I whittled it down to really identifying three main categories of why they used it. So first is that it helps people make a decision. So inviting people to make a decision about working with you at a specific time it can be effective, it prompts individuals to make a choice, whether positive or negative. So it brings them to make a decision, whether that's a yes or no, at least they know rather than just like letting it stay there in limbo. And if your offer genuinely includes elements of scarcity and urgency, it is important to communicate these aspects to your audience. Otherwise, you risk missing the opportunity to serve them effectively. articulating the potential costs of inaction such as delaying solutions or missing out on desired outcomes can help people overcome their own hesitations and fears about taking action and investing in themselves. If conveying urgency helps them see the benefits of acting now rather than later, it is beneficial. And doing my full research on this episode, Forbes actually agrees that it encourages customers to, quote, make a decision quicker, but in a gentle way. It doesn't scream by now, it says better today than tomorrow. And I will link that in the show notes as well, if you want to see that source. The second reason, main reason that business owners use that these urgency and scarcity techniques is that it communicates the facts about legitimate limitations. So for instance, if you are running a live course, for example, it might have a set number of spots and a specific start date. So it's not about creating this artificial scarcity. It's about being honest about very real constraints, you are only taking so many people, or sharing facts such as the doors closed on state or only 10 spots available. It helps set clear expectations. Assuming that like there legitimately are obviously only 10 spots available. If there is genuine urgency like the live round starts on Monday, or only 10 places left, it serves your audience to communicate those facts effectively. And then number three was a very good point that I would have never thought of is that a couple of neurodiverse thinkers said that it really supports them. It supports them, especially those who have ADHD, in their own words, they responded quote that I need it, if not my happy little distracted ADHD brain would never take action on the things I really want to do. And another response said, quote, I need a bazillion reminders before a cart closes. And that's legitimate. Even though I don't identify as Andy, I get that. So that is the case for why people do use these techniques. So now let's hear the other side of this coin. Why don't business owners use these urgency and scarcity techniques. So some choose not to even when the tactics are honest and legitimate, primarily for two reasons. One is mindset concerns. Some business owners avoid scarcity because they feel that emphasizing scarcity creates a negative atmosphere and can lead to a low vibe approach. They prefer to encourage an abundance mindset focusing on urgency rather than creating a sense of scarcity. The second primary reason why they don't use these techniques is for client decision making, which is interesting because that was also a reason why people support using these tactics. So the argument on this side of the coin is others avoid scarcity because they want clients to make decisions based on confidence and radiate readiness, not fear of missing out. They prefer clients who seek their services proactively with a clear understanding of the value and results they can provide. Scarcity, in their view could attract clients who are reactive rather than prepared and committed. So for sure, I would agree that you do not want someone like their nervous system into like this crazy state because they you know, bought right before the timer ended, or something like that. So yeah, again, just want to present both sides of the argument there. So let's also make a distinction here, urgency and scarcity are often lumped together. However, from my findings I am about to share with you there are also some important distinctions, let's talk about it and get into some of the tangible examples as well. So for urgency, urgency, and marketing refers to a sense of immediate action it pushes for customers, or clients to make quick decisions to avoid missing out. And there's a whole psychology behind FOMO which we are going to get to in just a minute here after these examples, which actually there are some very interesting psychological studies like legit in a the American Psychological Association, I believe it is, like an academic journal, which was so interesting to read. Anyways, we're gonna get there. And I want you to bet. Okay, so urgency, copywriting examples, one example would be a time limited offer. So they're available only for a short period, and they encourage immediate action. So examples would be like flash sales, countdown timers, on websites, things like that. And I know there are very conflicted opinions on countdown timers, even if it is legitimate. But again, I just want to present the facts to you, and you do you. So let's talk about the effectiveness of these studies show that limited time offers can increase sales significantly. For instance, a countdown timer can boost conversions by as much as 9%. And my source on that is called a Doric, I don't know if I'm pronouncing that right. But I have the link in the show notes for you as well, if you want to check that out. Second example would be limited time discounts. So they clearly communicate the end date and the terms of the discount. So for example, the discount period needs to be short enough to create a sense of urgency, but long enough to get give the customers time to act, often it could be 24 or 48 hours. But it really depends on the offer and audience. Thank you and effectiveness. So they definitely boost conversions. But overusing limited time discounts can lead to customer D sensitization. And the third urgency example I have for you is seasonal promotions that tie promotions to seasonal events, or holidays to leverage leverage natural buying cycles. So for example, holiday sales back to school promotions, if you think of like buying furniture, there's always a fourth of July sale, a Memorial Day Sale, right? We're always inundated with sales during those holiday weekends. And this is something that the PR strategist Selena Sue promotes in her work. And it's something that Apple's former head of podcasts has recommended as well. I was at a podcasting conference that he spoke at. And he this was one of his number one recommendations was to sync your marketing cycles, promotional cycles with the seasonal cycles as well, and holidays, and that tends to perform it. So you can see, like, Yeah, you see all over it. So retailers like Amazon use seasonal promotions, effectively driving significant sales during key periods. The recent Amazon Prime Day is a great example of the limited time discount limited time offers. So big companies are using these using these techniques. And Forbes describes urgency this way. They said quote, urgency makes a clear relevant promise to customers and removes the barriers to purchase for increased sales and increasingly loyal customers. So that is urgency. Now let's get into scarcity copywriting examples. So scarcity and marketing creates involves creating a perception of limited availability. And actually, I would erase the word perception there like there legitimately is limited availability, which can drive demand and urgency. So there is relation between the two there. So let's jump into I have three examples again, for this one. So one is limited stock or limited capacity, it highlights the low capacity levels to encourage immediate purchase. So for example, ecommerce platforms like Amazon saying, showing like only three left in stock. More for our industries. If you have like event hosts, you can share how many seats are left at your venue, like there's a legitimate capacity like you cannot cram, you know, 1000 people into 100 person capacity room, or group offer leaders who kept their programs to protect the depth and capacity in which they can actually serve their clients well to get them results. They can cap how many spots are are still available. And again, this only works if the number truly is capped. And you share honestly about how many seats are remaining. Right like Don't say like say you have room for 10 people and don't say like, oh, three spots remaining. If you haven't sold any tickets yet, obviously, that does not fall into honest and integrity. So, but sharing the truth about how many seats are left is what we're talking about here. So the benefit of this tactic is that it can increase the perceived value and urgency of the product or the offer. And there's actually a great story about this, which I'm going to share when we talk about the psychology in just a second here. The next example is offering exclusive access to certain customers clients, such as members only sales or VIP access if they buy a higher tier from you. And the benefits of this is building a sense of belonging and urgency to join the exclusive group. The example that comes to mind here is remember when clubhouse was all the rage because of its exclusivity, like you had to be invited to join, and it only worked for Apple iPhones, not for androids. But the potential drawbacks of this is that it can alienate alienate non members if it's not balanced carefully. And reason number three are actually example number three, I guess you could say is product launch scarcity. So using preorder limitations, or limited edition releases to build anticipation. Examples could be like, what comes to mind is tech companies often limiting initial stock during new product launches, like Apple mediately comes to mind for this with their iPhones and benefits is that when it's limited, it drives demand and also extensive media coverage in their example as well. So in our industry, this may look like offering a special bonus to the first 10 customers who purchased or maybe it's only X number of earlybird sales to your event. And that is going to drive demand because they want to snap those up before it expires or before everyone else grabs them. So by understanding and implementing these urgency and scarcity tactic, tactics thoughtfully, marketers can effectively drive action and increase sales while maintaining integrity in their marketing practices. Okay, now I'm so excited to jump into the psychology behind urgency and scarcity techniques. This was so interesting to research for this episode. There is no doubt that urgency and scarcity influence decision making and behavior. Urgency capitalizes on the fear of missing out FOMO. When faced with a limited or sorry, when faced with a time sensitive offer or deadline, individuals experience heightened anxiety about potentially missing out on an opportunity. This fear can override rational decision making processes, pushing people to act quickly. And to avoid regret. The ticking clock or limited time offer creates a sense of urgency that compels immediate action as individuals are driven to secure a deal or benefit before it's too late. You also see like so and so from this state just bought this offer and then like it keeps popping up on your screen, like when you're looking at the sales page. So funny people have like a big problem with countdown timers, but then they don't have a problem with you know, Jordan just bought either her ticket to you from from Arkansas just bought her ticket to this event or and then like the name keeps popping up as you're sitting there on the sales page. So that would just be another example of of urgency. And scarcity, on the other hand leverages the principles of limited availability and exclusivity. So when an offer or opportunity is presented as rare or in short supply, it becomes more desirable. This oh my gosh, if you have Toddlers Learn how to share this is very evidence. Am I speaking from experience if brother as the toy than the younger one wants it, it's immediately more desirable if your brother is playing with it. And this scarcity principle taps in to our instinctual drive to value and seek out rare items as they are perceived to be more valuable. I mean, this is true with like gold there is literally only so much available. So it is has a value to it. That's something that is unlimited, you know, doesn't have that same type of value. And the notion that something is limited edition, or only a few left, things like that create a sense of exclusivity, enhancing its alert and increasing its perceived worth. Together these psychological principles exploit our fears and desires. Actually, I don't really know if exploit is the totally correct word there. But again, leaving it up to you to decide they definitely play on our fears and desires. And they encourage quicker decision making and increasing the perceived value of our offers and opportunities. So let's dive into the cookie jar study. This was so fascinating. It was a study done in 1975 by three researchers investigating how scarcity affects perceived value, and they used two identical glass jars. One jar contains 10 cookies, while the other held only two. And despite the jar being exactly the same, and the cookies being identical, participants valued the cookies in the nearly empty jar more highly. This experiment demonstrated that scarcity, having fewer cookies in the one jar enhanced their perceived value showing how our perception of value can be influenced by the availability of an item. And this is directly from the American Psychological Association. Again, I will link directly to that academic study in the show notes as well. And then we have the cold hard data, which shows that urgency and scarcity indeed do increase conversion rates. Studies have shown that limited time offers can increase the likelihood of customers making a purchase by as much as 33%. This is because customers see it, see the offer as a limited opportunity and feel the need to act quickly in order to take advantage of it. The source there is app Matic again, that will be linked in the show notes. Then there's also a report from Experian that found that promotional or emails, conveying a sense of urgency had at least 14% higher click to open rates 59% Higher transaction to click rates, and twice as high transaction rates compared to their average marketing emails. Experience report also noted that by using urgency in their email subject lines, their transaction rates on sales increased 16%. For them and many others, it's the most effective, it is most effective to mention the discount as well as the time limit in the email subject lines. And what I found super interesting is that even colors can evoke a feeling of urgency, using Color Psychology here. an urgency such as forms like and your CTA buttons, the color of your CTA button apparently makes a difference according to changing minds.org. They say that red, orange and royal blue are the most effective at creating urgency, and royal blue and orange especially help to encourage action. So keep that in mind next time you put a CTA button in your emails, or on your sales page. So there you have it, those are all facts laid out straight for you. And now you get to decide you have the data and the different sides of the story. So you can make an informed decision that feels good to you. If you are still not up for it, then then don't do it. It's not going to work for you if you're if your energy and your heart aren't fully ended. But if you see the data and see the story and see the psychology behind it, and that does feel right and you feel that if you're being honest, then what can you what's going wrong, then absolutely go for it. So it is up to you. So if you would like to work together on incorporating urgency and scarcity into your marketing in a way that feels good or into your launch plan in a way that works for you. The types that and ways to say it that would feel good to you and boost those conversion rates at the same time, then I've got several ways we can creatively help you achieve your sales goals in integrity. So I would encourage you to download my Services Guide to choose the best way to get support for your next launch and you can find that at copywriting for coaches podcast.com Thank you for tuning in to the copywriting for coaches podcast. If you've been enjoying these episodes, let me know that you're listening and what you love about it by clicking on the copywriting for coach's show in Apple podcasts and leaving me a review. Be sure to subscribe while you're there so it's easy to catch new episodes every week. If you want digital resources to finish that copy project you've been working on the links are all waiting for you at copywriting for coaches podcast.com