Lead Generation Tips – Element of Scarcity
“Order within the next five minutes and get a second one free!”
“Only four left, order now!”
“Everything 50% off while supplies last!”
Have you ever seen one of these messages before? Of course you have. They rely on scarcity, whether real or invented, to help make a sale and they are proven selling techniques.
The most basic economic principle is the idea of supply and demand. When supply is low, demand is high. So by adding the element of scarcity, either in limited quantity or limited time, there is an added pressure to buy now. It is this fear of missing out (FOMO) that pushes people to buy right now. There are two main types of scarcity used to make a limited offer:
Limited Time Offers
These are the most common type of limited offers. They work based on the idea that this offer will only be available for a short period of time, so you better act now in order to get this deal. Once the offer has ended, that’s it. eBay is a great example of this because of its auction format. If you don’t bid right now, someone else will win.
Limited Quantity Offers
These are another familiar type of limited offers. Because there are only so many left, there is a sense of scarcity again, just as with the limited time offers. After the store runs out, you may not be able to get the item ever again, or at least not for a while. This limited quantity also indicates social proof that this is an item worth purchasing. Kickstarter is a good example of this. Sometimes, there are only so many people who can receive a certain item if they pledge so much to a project (i.e, for the first 100 people to pledge, $50 can buy them the item before everyone else).
Kickstarter reward for Pebble Smartwatch
Some companies even combine both of these into limited time and quantity, like Amazon and Groupon. Amazon has “daily deals” where an item is for sale for a limited amount of time, and you can see the percentage of the product that has been claimed, so you know how many are left. Groupon is similar in that there are only so many offers that can be claimed, and they must be claimed within a certain time period.
Amazon’s “daily deals”
These limited offers can be great for increasing sales, but be careful not to overuse them. If you do, they can decrease public goodwill and trust of your brand.