The Principle of Scarcity
British Airways made an announcement in Feb of 2003, that actually included a price increase. But the announcement also took their average morning sales up from 2 to 450. What do you think the additional piece of information was?
It announced it would be grounding its Concorde fleet in Feb 2003 and, in doing so, sales did the opposite - they took off. In fact in October 2003 when the last flight took off, thousands of people came to watch the flight. Cars blocked the highway for a site they could have watched on any day for the 27 years prior.
THE PRINCIPLE OF SCARCITY SUGGESTS THAT PEOPLE WANT MORE OF THOSE THINGS THEY ARE TOLD THEY CAN’T HAVE.
As humans, we have a strong desire for what we can’t have. We love to retain our freedom of choice, so when we are told that our freedom of choice may soon be disappearing we are more inclined to act. We want things more when we learn that they are scarce - available only in limited quantities and for a limited time.
SHOW GENUINE SCARCITY IN THE MOST TANGIBLE WAY
In general, the fear of loss is more powerful than the hope of gain. We know particularly with call-to-action offers we need to point out what will be lost by not responding. People fear loss, so, generate a feeling of potential loss.
Not only does scarcity of a product or service drive our behaviours, scarcity of information makes us act as well.
An experiment using information about a wholesale beef offer proves this very point. Telesales people for the beef wholesaler were told to divide their customer base into three. The first third they rang with their standard appeal, x amount of stock, at such and such a price, such and such a quality, and a guarantee to deliver by such and such a date. The total number of sales amounted to 10 cartloads.
The callers were then advised for the next third of their list to provide the same offer as the previous group, but also to let them know that due to the weather conditions in Australia it was likely that there would be a shortage of Australian beef coming into the marketplace. This additional piece of information jumped sales over 200%, to 24 cartloads.
The last third of customers were told exactly the same information, same price, same offer as the previous two thirds, however, this group were not only told about the weather issues in Australia they were also advised that the weather information came to them from a legitimate, exclusive source in the Australian Weather Bureau, and no other wholesaler was privy to the information. So not only were they advised about the scarcity of a product, they were also advised about the scarcity of this information... The result? This group’s purchases increased over 600% from the first group - same price, same offer, just an additional piece of information increased sales to 61 cartloads.
WORDS AND PHRASES LIKE EXCLUSIVE, NO LONGER, RARE, UNIQUE, TRIGGER THE FEAR OF MISSING OUT.
For call to action campaigns, we look for real information that explains why something will no longer be available, something that is rare, offers that are unique, something you have exclusively, and that includes information and knowledge, for example: “we are the only local supplier who has direct contact with the manufacturers in Italy, and on good authority they’ve told us this is the most popular line in Europe right now.”
Here’s the other thing you need to bear in mind with the Principle of Scarcity... because it works, it is also overused and, as a result, consumers are building a resistance to trusting scarcity offers.
Before April 2000, the New Zealand car industry announced an incoming law due to frontal impact regulations, stating no used vehicles manufactured prior to 1996 could be sold from that date.
When Zone Motors ran a campaign stating people should buy up now before the new regulations came into effect, in month one he sold his standard 40 units. When he changed his campaign to include an official statement by New Zealand Land Transport, he sold 87 units.
GIVE CREDIBLE REASONS WHY THERE IS SCARCITY... “BECAUSE”
We know when we run a promo we need to provide the information about ‘why’ the offer is genuinely rare and unique - the “because” reason.
When General Practitioner Dr Steve Searle decided to take on some additional hospital work because his practice was slow, he sent a memo to all his patients notifying them he would be cutting his practice’s hours back. The demand for his appointments shot up from 45% to 92%.
SCARCITY PLACES A GREATER VALUE ON THINGS.
By simply and honestly pointing out the fact that your products, services, time and help are limited you place a greater value on them to the point where people appreciate them and you more. And, in general, we say yes more to those we appreciate.