The irresistible appeal of scarcity

When it comes to marketing, less is always more

Just last week, I almost paid full price for a book – The Sense of an Ending by Julian Barnes. Now I never pay full price for a book. It’s not that I think authors aren’t worth it. They are. In fact, they’re the only thing helping me keep my fragile grip on reality in a world buzzing with social media gabble and virtual friends. But at heart, I’m a cheapskate, and my bargain-hunter instincts almost always knock my literary leanings into second place. So what made me break the habit of a lifetime? Two words. Julian. Barnes. Written by Julian Barnes himself on the title page of the book. His handwriting is, unlike so many of his fellow scribblers (how well named they are) surprisingly legible. Neat, tidy, precise. Much like his prose. I knew I could get a big discount over at Amazon or play.com. A quick check on the Amazon app my trusty HTC Desire (yes, I’ve finally had my trusty Nokia surgically removed) revealed that I could, indeed, get 40% off. So was Julian’s precise penmanship worth the extra £5.20? In a word, no. But that wasn’t what other, less price-sensitive, book-lovers thought. The slim volume was flying off the shelves, no doubt helped along by the prospect of ludicrous sums being forked out by eBay-ers in years to come for a first-edition signed copy of JB’s latest work. A scarce commodity indeed.

When it’s gone, it’s gone

Scarcity is key to getting people to take action. Nobody wants to miss out on an opportunity, a bargain, or the chance to get something your neighbour, colleague or brother hasn’t got. That’s why petrol queues build up at the merest hint of shortages. And it’s why saucer-eyed shoppers shiver through the night on the pavement in Oxford Street, waiting for the New Year sales. Because when it’s gone, it’s gone. Just look what’s happened with the HP TouchPad. In a saturated market-place, Hewlett-Packard simply couldn’t shift its tablet. There were sexier ones (the iPad), slimmer ones (Samsung Galaxy) and cheaper ones (Archos 101). The TouchPad also sported the webOS operating system, based on Linux but proprietary to HP. Not good. The result was that the tablet just didn’t catch the imagination. One US chain was said to have 250,000 that it simply couldn’t move. And then, something remarkable happened. HP pulled the plug on the TouchPad, and slashed the price to clear stock. Let’s just stop here for a moment. So now you’ve got technology that’s discontinued, a piece of kit that will one day be unsupported (despite HP’s claim to the contrary), that nobody’s developing for, that’ll fall behind in a fast-moving market. So in other words, a really bad idea as a potential purchase. And what did people do? They beseiged online and offline outlets, causing stockouts in a matter of hours. The TouchPad tsunami happened in the US first, and then the shock waves spread to the UK and elsewhere. Websites ground to a standstill as bargain-hungry shoppers piled in and overloaded them. Amazon was said to be offering refunds on orders it couldn’t fulfil. Tech websites were supplying regular updates on stock situations across retail outlets. And all this madness came down to one word. Scarcity. It trumps good sense and level-headedness every time. When something’s running out, and it’s been slashed to $99 or £90, who cares whether it’s a pig in a poke? You want one. Right now.

Now you see it…

So how do you make scarcity work for you? Simple. Whenever you’re devising a sales or marketing campaign, figure out a way of limiting it, so people take action. You don’t have to be devious or manipulative. You just have to make sure they realise that it’s better to do it today, not tomorrow. Scarcity comes in many different guises:

Time. Ever seen a Ryanair or a Dell promotion without an end date? No, me neither. That’s because there aren’t any. Both companies make sure people know they need to take action now. That’s not to say they don’t have flexibility. Our winged crusaders often prolong their offers just to get another few passengers through the door. Extended by popular demand is always a good line (and let’s face it – it beats extended by greed, which is probably more apt).
Stock. If you produce a product, then the obvious limit is the number of items you have on hand. Once they’re gone, that’s it.
Orders. If you produce a service, then there are no stock limitations. Instead, you can set a number of customers or orders. First 200 customers! will get people reaching for the phone or their mouse.
Oddity. Do what you do, but make it different. Gold-plate it, gift-wrap it, repackage it, bundle it. Add extra memory, call it something different (even the much-abused Limited Edition will do).
Extras. Extend the warranty, add an hour’s consulting. Promise 10% off the next order, or throw in a little bit more. The icing on the cake could just be what makes the deal too sweet to ignore.

But whatever you do, set a limit – a natural or a manufactured one. And make sure people know about it. The lesson here is simple: if there’s no reason to act, people don’t. Doing nothing is always easier than doing something. Scarcity sells. And there’s no shortage of it, so use it whenever you can. Find out more:

A good beginning: The Sense of an Ending by Julian Barnes at amazon.co.uk.
Just keep taking the tablets. Online madness as HP TouchPad sale sees UK sites crash after reduced price frenzy.

Kevin Marketing.