“The same principle works in marketing.”

 

In most cases, scarcity is used in connection with a discount that’s only available for a limited amount of time, and the focus is on the discount and not the urgency of the offer. The problem, though, is many people think the discount is the trigger. It’s not. It’s the urgency of the discount. Thus, they discount their new products—despite claiming they’re the best on the market. If your product is that good, then why would you need to discount it?

I’m always arguing not to do, what everybody else is doing, and I’m not going to stop now. The truth is, there are other ways to use scarcity without having to lower the price of your product.

For instance, limited product availability works well without discounting (if not better).

We tend to associate limited availability with exclusivity. If things are difficult to get, we know it’s because they’re better than the things we already have. As such, prospects use an item’s availability to decide on the desirability of the product.

People don’t think about the fact that it’s a psychological reaction that’s causing us to want something. We know we want it. And because we need to make sense of this feeling, we assign the item positive qualities to justify our desire.

In his book, Influence: The Psychology of Persuasion, Robert Cialdini argues that the idea of potential loss plays a role in how we make decisions. How often have you been more motivated by the prospect of losing something than gaining something of equal value?

Take Black Friday as an example:-

People wake up at silly o’clock. They wait in line for hours in the freezing cold. Why? So they can get their hands on the new LEGO Star Wars set that’s on sale for $49.99 before it’s sold out. (I actually have no idea what Star Wars LEGOs cost so don’t take me up on this). We know this phenomenon as the fear of missing out (FOMO).

• 68% of millennial consumers say they would buy something after experiencing FOMO, most often within 24 hours.

No one wants to feel left out, especially if a good deal is up for grabs. But there’s more to scarcity and FOMO than great deals.