Using Scarcity to Make More Sales
For an online business owner, scarcity is a valuable tool that can turn a failing product into a winner. It can be a small part of your sales process that adds some additional revenue, or it can be a significant component of your marketing funnel that influences how your product is sold.
Scarcity in Action
Most major retailers have an element of scarcity, but it may not be immediately apparent. Amazon, for example, provides stock inventory information, so you are informed if they only have limited availability of the product. It may be the case that they have a whole new shipment coming soon, but if there is only one copy left at the moment, the chances are high that you will buy.
Of course, sites like eBay have an end date attached to an auction. If the item is rare, there is no way of knowing when it may come up again for auction, so the temptation to purchase becomes harder to fend off. Closing down sales makes a seller’s product inventory scarce to the buyers. The draw of a bargain, coupled with the fact that the item has become scarce, will encourage more customers to buy.
How to Implement It
So how can you use scarcity in your own business? Adding a stock count can be a reasonably simple way to get started if you run an online store. To check the effectiveness, use an analytics program to ensure it is not having an undesirable result. Limited discounts and deals can be advantageous, and you can even run these offers sporadically throughout the year. Holiday periods are significant for scarcity deals as they give a ready-made reason for you running the request. Providing a reason for something being scarce is an integral part of the process.
An example of a brand new use of scarcity is a product launch. Product launches are a regular occurrence in the internet marketing world, creating a considerable buzz throughout a couple of weeks. Regardless of your industry, there is a good chance you can make something that can recreate the product launch techniques. Create a sense of occasion and excitement, build this to a crescendo, and then take the product off the market while taking care of your new customers. If your product is excellent, word of mouth will spread, and you can re-launch later in the year.
Things to Avoid
While the effect can be potent, there are some potential pitfalls to using scarcity, mainly when you draw too much attention to it. Faking lack is a tactic that can destroy any credibility you have earned, but many business owners still try it. They may use automated countdowns that continually reset based on your cookies or suggest they have a little bonus for early buyers, but don’t remove this when the allocation has been taken.
Always keep your integrity, even when the option of scarcity can benefit you in the short term. If you promise that a product will never return to the sale, don’t start selling it again a few months later. Remember the promises you have made to your customers, and be sure to keep them at all costs.
Get Started Today
Having looked at scarcity in action, the best ways to implement it, and the things to avoid, try to think of a way to add it to your business as soon as possible. There is probably an instance that could benefit sales, even if it is subtle and goes unnoticed by most of your audience. The scarcity model is tried-and-tested in business, both on and offline, so make sure it is a tool in your arsenal.
