Have you ever heard of the scarcity principle in marketing?
Well, even if you haven't, you've surely seen it in action.
Remember that time when you purchased (or almost purchased) something on an impulse, simply because of a blinking “Only 1 remaining item” text?
Yep, this was the scarcity principle at play.
So, how exactly does scarcity work and how do you use it for generating sales?
In this episode, we're getting to the bottom of it. Plus, we'll cover 6 examples of the scarcity principle used by other businesses - to make sure that by the end of listening, you'll have plenty of ideas for yours.
Ready to add popups to your website to create scarcity?
Then register a Getsitecontrol account, choose one of the popup templates, and adjust it to your website.
Don’t forget to subscribe if you enjoyed the episode.
Hi, this is Getsitecontrol Insider, a podcast where we talk about ways to help you get more sales, sign-ups, downloads, registrations, what have you. In today's episode, we're going to explain what the scarcity principle is and how you can use it for driving more sales. We'll also provide six samples of scarcity marketing, so by the end of listening you'll have plenty of ideas for your business. Stay tuned.:
You've surely seen the scarcity principle in action. For instance, have you ever purchased something on an impulse simply because of a blinking "Only one remaining item" text or because that 50% off coupon was expiring in just a few hours? And it's not just you. Most of us can recall this happening, but it's not always because we deeply needed or wanted a specific item. This is the scarcity principle at play .And if you're not yet using this principle on your eCommerce store, you're missing out on an important marketing strategy that could multiply your sales.Speaker 1:
What is the scarcity principle?:
The scarcity principle refers to the usage of scarcity, meaning that something is scarce or in short supply to make it appear more valuable to consumers. If you own a store, you may have already used this principle without knowing it. For example, have you ever run a limited time sale? If so, you were hard at work with the scarcity principle. Scarcity can be both real and simulated and typically only the eCommerce store owner will know the difference. For example, if you're selling physical products on your store, there is a form of scarcity there because you rely on the supply of products, but it doesn't mean supply is scarce. You can choose to share with your potential buyers when only a limited quantity of something is left, but when e-commerce marketers display a limited quantity of a certain item, sometimes it's just a marketing trick used to sell more.Speaker 1:
Now, scarcity isn't just limited to product supply. It's often paired with a sense of urgency and can be time-based too .:
Here's what I mean. There can be a limited amount of time left to take part in a sale, participate in a contest, purchase a limited edition item, or snag a discounted product. In this case, it isn't so much the number of items that causes scarcity, but the amount of time the consumer has to make up their mind about whether they want it or not. Scarcity can also work with exclusive products or sales that are only available to certain people in your audience. For example, if you have a members only sale or a tier of products that are only accessible to people who are a part of your loyalty club, scarcity exists because something cannot be accessed by everyone. How scarcity influences consumers. Marketers don't just use the scarcity principle for fun.Speaker 1:
It's been proven to be quite effective at increasing e-commerce. Sales science daily spoke about this phenomenon, their article about consumer preferences. Here's what it says. Psychologists have long known that you can make a consumer good, more desirable by making it appear rare. The authors specified that this effect is present whether or not the scarcity was real or simulated. When items are scarce, they are perceived as more valuable and thus more desirable. It also makes consumers feel like they have access to something that other people want but can't have, which makes them feel good about themselves. Whether this scarcity stems from item supply or time supply, the principle remains the same, so why do eCommerce stores set up a limited time on their sales and promotions? It's not just because they can't afford to sell items at such low prices all the time because some of them could. It's because it makes the sale more valuable. If the sale were to continue on forever, consumers have the choice to push their purchases to later because the sale isn't really special and later may never happen. When there is a clear deadline, time becomes scarce. Consumers see this as a limited time opportunity because it is and they know that they have to jump on it quickly if they want to take part in the sale. In this case, it's not so much the value of the specific items that is increased in the consumer's eyes, but rather the value of the sale itself. If you ever have a year round sale, the importance and value of this sale won't be as high compared to a sale that lasts seven, five, or even three days. Why do people go crazy on black Friday? Because of how short it is. Plus, it only comes around once a year. People hate missing out, and this is reflected in their purchasing decisions. Effective scarcity marketing examples. Now that we've explored why the scarcity principle makes consumers tick, let's see how other businesses use it to boost sales. Example number one, use countdowns for limited time sales. Let's start it off with an example. You've probably used yourself a limited time sale. The shorter the sale, the fewer impressions you might make, but the more effective those impressions will be. However, you don't have to simply stick a date on your side and let it do its job. Take inspiration from best. Buy the online electronic store that runs a new sale on a different item every day and uses a countdown timer to amp up the hype. The timer makes it feel more real. You can see the seconds going down and it lets you know exactly when you're out of time and it's better than a simple date because not all consumers are great with dates and timing. Yet everyone understand what ends in 10 hours means and it takes no mental effort to do the math. Example number two , play with shipping countdowns. Unless your eCommerce store always provides free shipping, you can play with a free shipping idea using scarcity. For instance, Amazon is well known for instilling urgency into consumers by letting you know exactly how much time you have left, if you want your item shipped to you the next day. Example number three, create special seasonal offers. You don't have to be a clothing brand to offer seasonal scarcity, no matter what type of eCommerce store you run, you can use scarcity marketing throughout the seasons to increase the perceived value of said seasonal items. Let's take David's tea as an example. The company constantly releases seasonal tea collections and many of them are only available during certain times of the year, so if your favorite tea is a holiday tea, you'll need to stock up during the holiday season because you won't be able to buy it in the middle of the summer. Example number four, make your low stock obvious. Are you running out of something? Might as well make the most of it. For instance, Nordstrom luxury apparel store shows you how many items are left for selected models when you browse through their collection online. This tactic is popular in the hotel industry as well. Booking loves to remind users that only one or two rooms remained for a specific location. Plus they actively use members only deals to adding another layer of scarcity. Since only members get to access these deals, they are perceived as more valuable. Example, number five, launch limited edition items. Limited edition items are the cream of the crop. When it comes to scarcity, not only is there a limited supply, but they'll never come back. This makes these items much more valuable. The cost of not buying, you'll never have access to this specific item. Again, for customers who like to stand out, limited edition offers are incredibly enticing. Example number six, display. How many people are interested. Here's another scarcity marketing tactic that the hotel industry is great at implementing social proof. This acts as a double whammy by not only showing consumers that their item is scarce, but also that it is good enough for other people to be interested as well. Remember, booking.com they often show you that real people have booked this room for specific dates only 13 hours ago. Suddenly the reality of losing this room becomes very real. But let's see what this can look like for products. Coles , another store for clothing and accessories has a great example of real time social proof. When you browse their website, you see exactly how many people are viewing a given item right now. This will let the consumer know that they risk the chance of missing out on this sale if they don't hurry. So how do you implement scarcity on your website? Well, if you don't have the bandwidth to completely rehaul the pages of your site, but you still want to add scarcity to your marketing efforts, you can use get site control widgets. Simple tools like popups, sliders, bars, and countdown timers can do the trick and help you add that element of exclusivity without touching the script that runs your sign. For instance, you can display banners announcing your sale, retain, abandoning visitors with exit intent popups, and even at an email capture field to grow your list of subscribers. Why does growing your list matter for scarcity marketing? Because all the scarcity tactics in the world won't work if nobody knows about your sale. By encouraging people to subscribe, you gain a direct line of communication with your customers to let them know about the product scarcity. Ready to add popups to your website, go to get site control.com and register an account. Then choose one of the templates and adjusted to your taste . This is it for the episode. Don't forget to subscribe if you enjoyed it. Thank you for listening. Until next time.