Scarcity marketing is a proven tactic that marketers use to boost sales. It’s a clever technique to get past any customer resistance by creating circumstances that encourage customers to make a purchasing decision right now.
Scarcity marketing relies on something called the scarcity principle, an economic theory that states the perceived value of a product rises as the supply falls.Scarcity marketing is a proven tactic used to boost sales by creating circumstances that encourages customers to make a purchasing decision immediately. Click To Tweet
Psychologist Stephen Worchel studied this effect back in 1975. He offered subjects cookies from two different jars. One jar was full, the other only had two cookies. Participants were told that the jar with fewer cookies was running low because of an accident or high demand, while the opposite was true of the jar with more cookie–too many were produced due to a mistake or they just weren’t that popular.
When asked which jar they prefer, a majority of subjects said they preferred the jar with only two cookies.
When consumers find out that a product is nearly gone, and especially when they learn it is in high demand, it becomes more attractive and appears to increase in value. They’re making an assumption that a valuable product would be popular, and so there would be fewer available, whereas if a product has plenty of stock it may not be as good a product to begin with.
Essentially, the idea that we can’t have something makes us want it more, causing a surge in demand.
Scarcity marketing is about finding ways to leverage this scarcity principle to create forcing functions for consumers so they feel compelled to come to a quick purchasing decision. It’s a powerful technique to incorporate in your email marketing.
You’ve undoubtedly seen scarcity used in all sorts of marketing messages.
- “Only available until supplies last.”
- “Liquidation sale!”
- “Stock is limited.”
- “Only 10 seats left.”
Phrases like this drive up demand for the item by informing potential customers that they’ll miss out if they don’t buy soon. Someone else could buy first and then they’ll never get that valuable item! Moreover, because you’re indicating that the product is so popular that your stock is already declining quickly, customers are receiving the message that other people are already buying the item they want.
The beauty of scarcity marketing is that it makes your products seem more valuable without you having to change anything. You don’t need to give a free gift or a discount to get people to buy when you only have a few items left. Your products don’t even need to be materially better than they were yesterday. The very idea that they’re in scarce supply is enough to make your customers see they as more valuable and move them closer to a purchase decision.The idea that we can’t have something makes us want it more, causing a surge in demand. Click To Tweet
A brick-and-mortar example of scarcity marketing
Every year, stores all over the United States host Black Friday sales. In the weeks before Black Friday, they advertise unreasonably good deals on things everyone wants, like TVs, video game systems, and household items.
But there’s a catch: The deals are limited. They might offer a 40 inch TV for $99, but there are only five of those. Once the five run out, the TVs shoot up to a more reasonable holiday discount price.
What’s the result? In stores all over the country, hundreds of thousands of people line up hours before the stores open. Some arrive the day before, set up camping gear, and sleep alongside the building.
It’s not the deal that gets people to wait in the cold for hours, it’s the scarcity of the deal. People are afraid of missing out; afraid of missing an incredible opportunity. It’s possible, even likely, that many of the people lining up for those TVs and game systems, weren’t even in the market for a new TV or a video game system. The amazing deal helps, of course, but what gets them to line up is the scarcity; the fear of missing out (FOMO) on such an amazing deal is a powerful motivator to get people to buy.
Scarcity marketing doesn’t work all the time
The biggest challenge of using scarcity marketing is that customers often suspect that you aren’t being honest with them, especially when it comes to online sales.
It’s easy, for instance, for a concert venue to advertise that tickets are almost sold out. They have a maximum capacity, so it makes sense that they can’t sell an infinite number of tickets.
But if you sell products online, customers don’t know for sure that your supply is actually limited. There’s no shelf they can see that’s almost empty. For all they know, you’ll just order more once your stock runs out.
This is especially true for eCommerce retailers that sell digital products. No one would believe you if you were to say, “We only have six eBooks left!”
So if you use scarcity marketing in your emails, you have to mean it.
Furthermore, you might be tempted to raise your prices once your stock gets low, especially if sales are still coming in. People obviously want the product, so you could probably charge more for it, right?
That’s true, but it creates an inconsistent customer experience.
People will avoid your store if they think you’re constantly changing your prices to squeeze every last penny out of your customers. Even worse, by raising the price you might make the shopper more resistant to buy, canceling out the need you created with scarcity.
A note about digital goods and scarcity marketing
For digital goods sellers, as I said above, it can be hard to use scarcity. You can’t very well run out of a downloadable item. You can, however, still use scarcity in you marketing by offering limited stock deals or by offering limited availability add-ons. Some of this is artificial, but not all of it.
For example, you could offer a bundle of your five best-selling WordPress templates to the first 100 people to respond to a deal. The stock itself doesn’t have scarcity, but the deal does.
Or, say you’ve written an eBook about website performance. You could offer a website speed audit as a free add-on included with the first 50 sales. Your time actually is scarce, so this is a legitimate use of scarcity that will feel authentic, and provides real value to buyers, encouraging them to come to a purchasing decision more quickly.
Best practices for using scarcity marketing in your emails
Before you start using scarcity in your email copy and images, let’s go over some best practices.
1. Understand your audience and market
Scarcity can quickly backfire if your customers can buy the same products at other places, which means it’s almost impossible to use scarcity for commodity products.
For example, you can’t really use scarcity to sell toasters because anyone can get a toaster anywhere (unless, of course, what’s scarce is the discount on toasters). Your toaster inventory may be low, but that doesn’t mean they’re scarce for the consumer.
So if you want to use scarcity, it helps to have something unique about your products that your customers can’t get anywhere else.
What qualifies as unique? It doesn’t have to be complex. It could be your own designs or patterns, a custom style, or a service only you can provide.
It’s important to know your audience, as well. This is where understanding your customers’ jobs-to-be-done and crafting buyer personas are helpful. Some types of customers just aren’t motivated by scarcity. They may even resent the technique.
Chubbies is a humorous, self-aware brand. They know exactly how to mix their branded copy with scarcity language.
2. Make sure to keep your word
If you entice your customers with scarcity, it’s important to be clear about your limitations. If you’re dishonest, you’ll lose credibility with your customer base. They’ll distrust any future scarcity claims in addition to your other claims. If you’ll lie about one thing, they’ll assume, you might lie about other things – like the benefits of your products, its uses, materials, etc.
You might also open yourself up to legal issues, such as claims of false advertising.If you entice your customers with scarcity, it’s important to be honest about your limitations. Click To Tweet
If you deceive your customers about your inventory, there’s little chance they’ll learn the truth (unless you email again with a higher stock number or if your website shows inventory counts that don’t match what you message through email). After all, there’s no way for them to verify how many items you have available. Nevertheless, it’s just bad business to be dishonest about your inventory.
TL;DR: when you say your inventory is low, actually mean it. Don’t lie about scarcity.
3. Stick to one product per email
When you send an email announcing a limited supply, stick to a single product. Don’t show 10 products each labeled “Only one left!” It looks like you’re being deceiptful to coerce people into buying. Even if you truly only have a single product of each type left, an email full of products gives the impression that your store is fully stocked.
If your stock is genuinely low across a number of items, send different emails to different segments of your list so they only see the products that matter to them.
Alternatively, you could create a “low stock” category (call it whatever makes sense for your brand) and advertise it via email as a collection of your nearly-sold-out items.
4. Reminders are okay but don’t be pushy
It’s perfectly fine to send multiple emails updating your customers about the stock of a particular item. You might announce “Supplies limited” in one email, then say “Only 10 left” in another.
But don’t get carried away. Too many emails in a short period of time advertising the same thing will just annoy your customers.
Beardbrand uses scarcity language in their abandoned cart emails. They remind the customer that there’s still an item left in the cart, but it won’t last long.
5. Don’t overuse scarcity
You may see great results by using scarcity in your email marketing copy, but you shouldn’t use it too often. If you’re constantly “running out of stock” or hosting flash sales every week, your customers will catch on that you’re just using gimmicks to push sales.
In one study by Scientific Journal Publishers, they found that “When consumers interpreted scarcity claims as a sales tactic, the positive effect of scarcity claims on product evaluation would be diluted.”When consumers interpret scarcity as a sales tactic, the effects of scarcity claims on product evaluation are diluted. Click To Tweet
6. Don’t extend deals/stock to get more sales
Let’s say you’re having a two-day weekend sale, but toward the end of the second day, you haven’t sold as much product as you want. You could extend the sale another day, right? Wouldn’t that give your customers some more time to grab the deal?
It might, but it would also damage your credibility. Your customers might wonder why you had a two-day sale when you’re willing to sell those products for a discount any time.
This Amazon email advertises a group of discounted products. It uses scarcity in two spots: 1) The deal’s expiration date, and 2) “While supplies last.”
Scarcity marketing is a powerful technique to boost your email conversions (opens and clicks) as well as your total eCommerce sales. Follow these best practices and you’ll encourage your customers to buy without tarnishing your reputation.