In our discussion about marketing strategies this week, we’ve already covered cause marketing and relationship marketing. Today, we’re focusing on scarcity marketing.
What is Scarcity Marketing?
Scarcity marketing involves motivating people to buy something by telling them there is a shortage in what is available and a limited time to act. The goal is to create a sense of urgency through an aggressive call to action; to make people scared that they will not be able to acquire something that they want if they don’t act fast.
Scarcity Marketing Background
It’s difficult to pinpoint the first instance of scarcity marketing, but companies have used the technique for many years. One of the most notable examples of scarcity marketing – the Disney Vault – started during the 1980s. Walt Disney Studios Home Entertainment began to reissue limited editions of their films and urge consumers to purchase these films before they went back into the “Disney Vault.” Because each Disney film is only for a limited time before it is put in the vault and not made available for several years until it is released again, consumers are driven to act fast when a new video is released.
Apple is another company that clearly understands and uses scarcity marketing. And the Cabbage Patch Kids craze makes a poignant example of scarcity marketing from my own childhood.
Benefits of Scarcity Marketing
The primary benefit of using scarcity marketing in your business is being able to position your products as services as a commodity. This drives up the perceived value of what you’re selling, and the fear that it has limited availability makes people act fast to purchase.
Scarcity can also present an opportunity to engage your audience in a new way. By creating an interesting background that shares the reason for the scarcity (such as a one-of-a-kind product or special edition that has significant meaning), you can capture and keep the customer’s attention.
Lastly, when it’s done effectively, scarcity marketing can also create a cult following. Going back to the example of Cabbage Patch Kids, every kid wanted one and all of the “cool” kids had one. It can create a powerful loyalty among your audience.
There are a number of ways that scarcity marketing can backfire. Here are some examples of disadvantages to using this marketing technique:
- Using scarcity for products or services with low value can severely hurt your reputation
- Creating an illusion of scarcity can come off as a form of trickery
- Building a sense of exclusivity can actually make you lose potential customers
And of course, there is the possibility that the fear the scarcity creates will turn off and push clients away.
Scarcity Marketing In Your Business
One way to apply scarcity marketing in a service-oriented business is by launching a campaign that aims to find a limited number of clients. You can position this as having only X projects slots available in your business before your client base is full and you are closed to incoming work. This can be especially effective if you have a large mailing list or audience you frequently reach out to.
You can also offer a limited time special service or discount for new clients. The key is to make it limited in time or quantity and market it aggressively at regular intervals before that time or quantity runs out.
Another technique can be as simple as including an expiration date on proposals you send out to potential clients. For example, if the client doesn’t act by a certain date, the quote will be invalid.
There are a lot of ways you can apply scarcity marketing, if you’re willing to be creative. Have you used it to market your services? What are some examples of ways you’ve accomplished this?
Image credit: Eneas