How To Use Scarcity to Boost Sales
Markets are all about supply and demand. And where you can create scarcity, you can reduce supply, which under the right circumstances can drive up demand. Marketers use scarcity, or special promotions given within short time frames or in small quantities, to drive up their sales. You need to have good products and a great marketing scheme in place for scarcity to work as it cannot sell products by itself, but it can boost sales!
Scarcity refers to making something “artificially” scarce. A savvy marketer can accomplish this in two ways; one by limiting the quantity available, the other by limiting the time. Usually scarcity is used in combination with a promotion. For example, you might offer to sell the first 20 copies of your ebook at 50% off or all sales within the first 12 hours at 50% off.
This forces people to act quickly if they want to secure the discount, thus creating a quick bump in sales. Since most customers are price conscious and people love deals and discounts, this method can be quite effective.
Using Scarcity Effectively
Scarcity requires discipline. A great marketer will always follow through with his or her limits. While the occasional increase in quantity or short extension in time is okay, customers should not come to expect such increases or your technique will be undermined in the long run.
One great strategy is to use scarcity towards the end of your sales funnel. You can also pre-qualify potential customers and make sure they are interested before offering them a discount on limited stock or within a certain time frame.
Also, you should always have a concrete reason for using scarcity. For example, you might offer a book launch day discount through the first 12 hours for your latest novel. Customers will know that you are only giving a discount because you are launching your book. Another example is to use a holiday, say offering the first 30 copies of your ebook at 25% off because it is Christmas Eve. Basically, it’s best to have a justification for the discount and artificial scarcity, especially for digital products which don’t have a set quantity of products in stock.
You can also offer discounts at certain times of the day, often referred to as an “early bird” special. For example on Christmas Eve you could offer customers an early bird special to purchase a new television if they make the purchase between 8am and 11am. This forces people to act quickly.
One of the great things about scarcity is that it forces customers to chose quickly or risk losing the discount. If the potential customer is “on the fence” in regards to making a purchase, a time or quantity limited discount is often effective in getting them to pull the trigger and to make a purchase.
Be Creative with Scarcity
Giving a price discount is not the only way to create scarcity. Let’s say you are selling an ebook novel series, you could offer the first 100 customers who purchase the latest installment in your series a free copy of an earlier book. This way customers can get two products for the price of one.
You can also use scarcity to reward fans on your Facebook list, subscribers to your newsletter, or anything similar. You can make offers to members and fans that others cannot access using scarcity principles. For example, you could say “the first one hundred Facebook fans who purchase my new book will get a 50% discount.” This makes scarcity an extra reward for the people have given you the most support.
Giving away free samples or trials is also a great way to offer a discount. Then people can be encouraged to subscribe to the whole service or purchase the entire product.
Being Ethical With Scarcity
Some critics have pointed out that scarcity involves pressure, and even fear or stress, to push people to make a purchase. At the end of the day, however, scarcity is a reward for people who act fast. Scarcity can result in a win-win for both customers and suppliers, and while a few people may be pressured into the purchase, if they didn’t want the product they would not have bought it.
Scarcity is a great way to make products affordable for people who might be tight on money. And if your marketing is well done and your product is top notch then the real result is simply a reward for your fans, loyal customers, and people who act fast.