What exactly is scarcity marketing and how can it help a business to market better and sell more? Scarcity marketing is where a shortage of a product is created or the perception of limited stock is communicated to prospects and potential customers so as to provoke action and more sales.
Many businesses have successfully used scarcity marketing to create a sense of urgency in the buying public with excellent results.
Marketers have always recognized the need to create a sense of urgency in customers. They have done this by, amongst other things, coming up with a call to action that has a time limit. The reason why this has always been done is that it is human nature to constantly procrastinate always thinking that you have all the time in the world to get round to doing something. People will always hold off making a purchase for as long as they possibly can telling themselves that they will get it soon enough, someday.
Most of us are well aware of the economics law that says demand (together with price) will tend to grow dramatically when the supply falls short. In other words scarcity marketing techniques can help you sell much more simply because customers and prospects will be more willing to make a purchase in large numbers when they sense that there is some kind of shortage that could cause them to miss out on the product altogether.
By using scarcity marketing techniques and making prospects believe that the product is in short supply, procrastinators are provoked to make a purchase immediately and those who are always fond of putting off decisions are spurred into taking action.
Some folks believe that using this kind of approach is manipulative. This is just not true. It is simply a marketing technique to deal with the inherent nature of humans to postpone everything including things that are of great benefit to their lives, health and well being. The important thing is to carry out your scarcity marketing in an ethical manner always caring for your prospects and customers and appreciating the fact that you need to befriend them for the long haul to have a really successful and sustainable business.
There are quite a number of ways of incorporating scarcity marketing into your promotional and selling efforts.
The most common is placing limited time frames on all offers. Failing to do so is asking for trouble because many of your customers who like your offer will still never get round to taking any action and will come nowhere near making a purchase.
Another version of the same practice is to indicate that there is only a very limited number of a unit or opportunities meaning that those who are slow to act will arrive to find that everything has sold out.
If you usually send out proposals you can insert an expiration date beyond which the whole quote, including prices will be invalid. You need to make every effort to ensure that your clients take your deadlines seriously. One way to do this is to highlight the changing circumstances in your industry and way of doing business that will not permit a proposal and your quotes to be timeless.
There are also long term benefits of using scarcity marketing that will usually accrue to any business. The most important is that it tends to help position a product or service as a commodity which will always drive up its’ perceived value in the eyes of your customers and the public. You can further enhance this perception by finding a viable reason why your product is always in short supply. For instance it could be the scarcity or short supply of a certain raw material used in making it. Done with finesse this can easily result in your product having a cult following.
Still, you must always be very careful when using scarcity marketing and you should carefully consider what kind of product or service you want to market using this method before you plunge in. For example using this technique for low value products or services can be disastrous and could end up appearing to be a form of trickery which will create animosity and resistance in your buying public which will be impossible to reverse.
The golden rule is that you need to use scarcity marketing responsibly at all times.
