Think about the following scenario; you’ve popped into your local shop to treat yourself to a bar of chocolate. Whilst you are reaching for a trusted Twix you spot a new dark chocolate Mars that’s only available for a limited time, do you change your mind? Well, the scarcity principle says that plenty of people do, and not just when choosing chocolate.
The bare theory is devastatingly simple & obvious; opportunities seem more valuable to us when their availability is limited. Mostly this manifests itself as either limited in numbers, limited in time or both. Looking a little deeper research has shown some interesting additions to the theory.
1. If the method of how we hear about the scarcity is itself scarce (or exclusive) the effect is even more powerful.
Take the June 2010 launch of the new iPhone from Apple, stocks were always going to be limited and you didn’t need to consult Nostrodamus to predict the long queues outside of Apple stores on the day of the launch. What was clever was that the disappointed many could sign-up for exclusive emails about when the next batch were arriving. So even though you may have wasted a few hours of your life in the queue, you are now part of an exclusive club of people in-the-know about the next limited deliveries. A scarcity double whammy.
2. We tend to value things that have recently become less available to us over things that have always been scarce.
The much talked about campaign in the UK to get the Wispa chocolate bar back was due to it being taken away after 20 years of it being on the shelves, no such campaigns happen over Hershey’s Kisses in the UK as they have never been available despite being the 5th most popular chocolate in the US.
3. We value things even more if we feel that we are in competition for it.
Robert Caldini, the expert on the psychology of persuasion, cites a genius idea by his brother when selling a car through a private ad – instead of staggering appointments he booked them all for the same time. Whilst the first person to arrive started viewing the car with the usual scepticism this soon changed when the second person arrived as they were now in competition for a limited resource. By the time the third person arrived they were fighting over who can hand over the money the quickest.
4. We tend to perceive items as being of better quality when they are scarce.
Often when something is banned or censored it gives it a cult status and is valued higher. Research has shown that if a lecture or rally on a certain subject is banned it actually can have the opposite effect as people believe the information more, even though they’ve never actually heard it.
Things to keep in mind if using the scarcity principle.
Tapping into powerful techniques which base themselves in our human nature can be seen as manipulative. This has been true in some cases of the scarcity principle and here’s a couple of tips to keep your integrity whilst applying it to your work.
1. Don’t lie
If you are going to use the scarcity principle make it real. Often scarcity is out of your hands, in the case of the iPhone 4 Apple can only physically manufacture a certain amount at a time so stocks are limited to production. Greg Martin coined this as scarcity by design. However, when there is no physical limitation it becomes scarcity by choice, something which is on much more shaky ground. The release of diamonds into the market is strictly controlled for the sole purpose of keeping the value of diamonds high, even when they are not a physically scarce commodity.
2. Be consistent
If you offer a limited time offer or a limited number, make sure you don’t change this offer. I have received an email from a certain online art supplier with an offer of 25% discount if I purchased within 5 days which prompted me to get a painting as a present for a friend. I then got an email offering me the same discount every week for over a year, so not such a special offer after all, and leaving me with a bad feeling towards their brand.
3. Give a reason for the scarcity
We like to know the reason behind things. When Apple tell us that the they are rushing to get as many iPhones out as possible but the numbers are limited, we’re OK with this.
4. Don’t mistake scarcity for quality
Whilst above I mentioned that something that is hard to get hold of is perceived as better quality, this is before the item/service is bought. If it turns out that it does not live up to its expectation then it will really not help your brand reputation. If the value of scarcity is in the desire to acquire something rare (e.g. a first edition book) then that’s fine, but if it’s just to possess the item to use then it must live up to its marketing build-up. it’s good to remember that scarce things do not taste or feel or sound or ride or work any better because of their limited availability.
If you spot a great example of the scarcity principle in action email it or post it below.