Saturday, 26 September 2015

The tools you need when using scarcity in your marketing

tools for scarcity marketing
How many times have you made a buying decision because you were told that there were only so many of the item left? This is known as scarcity marketing and it’s extremely effective. I  personally have a strong dislike of bad scarcity in marketing, but scarcity works, and it’s part of how we are made up as human beings; we’re stuck with it.
But as marketers, we do have a choice about when and where to use scarcity, and how we use it.
The principle behind scarcity marketing is known as supply and demand in economics. If your product is seen as being in short supply then more value is immediately associated with it, yes we value the rare materials over the abundant ones. This gives your buyer the mentality of “if everyone is snapping this up, then I should as well”, the fear of missing out, the dopamine hit that comes with purchase and the sense of well-being that comes with knowing that you’re in with the “in-crowd”.

For scarcity to work effectively, your offer has to be positioned correctly in the marketplace.

By positioning your products with scarcity, you are giving them more perceived value immediately. Retailers use this method simply by showing they once had a lot of this item in stock, and due to popular demand you only have X number left. This is more effective than telling customers I only have 25 in stock so you’d better buy now before they are gone.
In the latter example, the customer doesn’t feel the sense of urgency in order to buy. You have no proof that these are popular or in demand. Your customers are probably of the mindset that you only ordered 25 because you didn’t think more than that would sell. Can you see the difference?
There’s the case of the infomercial on TV that sky rocketed their sales by changing the language of the telephonist when she answered the phone. Cialdini in his Influence book goes into more details. What the company did was ask the telephonist to say “If our lines are busy, please call again” instead of the usual “Operators are standing by.” The implication being that the product is popular, you’ll be lucky to get through.
The language around scarcity is complex, but very telling. It’s the subtle differences your customers pick up on, even if you don’t realise you’re saying them. If you decide to use scarcity in your marketing, remember to work on your language first.

Scarcity in online marketing

One strategy that many online marketers use for selling digital products is to use what is known as a dime sale. This is when they run a sale where the price increases a set amount after a certain number of sales. When visitors arrive on the sales page they will be shown a note that says “only 2 left at this price”. This adds scarcity to the offer, and it doesn’t pretend that the digital download is limited in any way. The scarcity factor driving the dime sale is the price.
Another example of adding scarcity is to remind your customers that you only have a certain number of this item left in stock. This should only apply to physical items, (digital items? Please don’t, we know you’re lying) or even to ticket sales, if you are selling tickets to an event.

Successful marketers will often add scarcity into an offer by including a specific end date.

Stating that the price will increase to X amount by a certain date can be extremely effective. This helps to get those who are borderline shoppers and helps to turn them into an actual buyer. However, this only works if you increase the price. Retailers do this with sales banners in their shop windows saying things like “only 2 days left”.
False scarcity in your marketing is quite damaging to your credibility. So make sure you actually put the prices up!

False Scarcity is damaging?

Your audience is smart. They’re smarter than people (and by people I mean marketers) give them credit for. They understand that a digital product really has no limit, so there has to be a reason that makes sense for restricting the sale to create urgency. These include things like:
  • Testing the product’s marketplace viability
  • Have a live option so that resources are finite
  • Having a “sell by date” on the product
  • Creating a limited edition of a product
I recommend talking to your audience and sharing the reasons why there’s scarcity in this product, and what to do if they can’t buy right now. Think that doesn’t work? Ramit Sethi of “I can make you rich” frequently tells people who cannot afford his product not to buy it. He’s a smart guy who knows if someone is in debt, their mind isn’t going to be on wealth acquisition, but on the weight of their debt. He also knows that those that don’t have this issue, see him as a decent guy. He’s not fleecing the vulnerable.

Testing a product’s viability is another way of getting the right results through scarcity.

The early adopters get a great deal, you get to figure out the impact of the product, and whether you can sell it to the mass market or to a specific niche and all is good. No one feels crappy after they’ve read your landing page.
You customers are business people too. Whether their business is managing the home, or they work in an office and control the purchasing budget, they’re still business people. They understand things like testing a product, that your time is limited and a use by date. They also know and understand limited edition items, what they struggle with is how a digital product that’s limitless, is limited. This creates confusion and a feeling of being duped in some way, that they’re not smart enough. Don’t do that to people. You really don’t need to.

The tools you need in scarcity marketing

  • If you use WordPress, then check out Thrive Content Builder. Here you can add countdown timers to your landing pages and build in scarcity as a visual. I use Thrive Themes, and the countdown timer that you see at the top of many pages are a short-code.
  • Research shows that emails and landing pages with a countdown timer drive opt-in rates up. Motion Mail app works with the majority of email providers and has 20,000 credits available for free.
  • Scarcity Samurai WordPress plugin. I own this plugin and I recommend it for evergreen launches and there’s a free trial that means you can try it before you consider purchasing it. I like it particularly as you can create nice, non-sleazy campaigns. I think it would be particularly powerful with the Motion Mail App.
  • Your brain. Seriously. Use your brain. If you don’t believe how something can be scarce, your audience won’t either. In fact, I’ll go as far as to say, this is the most important tool on this list!
Adding scarcity is a marketing technique than can really help increase your bottom line, if you do it right. It’s a combination of the right words and the right tools, at the right time. If you haven’t tried the scarcity strategy in your marketing, maybe it’s time you did, but if you do, please do so with dignity.
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