Artificial Scarcity in Marketing Messages

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Have you ever seen one of those ads that promotes “only 10 copies left” – just to discover that the product is an eBook? Or “Only 3 seats left”… in an on-demand course? 
These are both examples of artficial scarcity in marketing messages. 

My Experiences with Scarcity Marketing Messages

About 10 years ago, I started running “quantities limited” products with “kit of the month” programs. We put together 100 collections of products (a combination of digital and physical goods) and sold them for a limited period of time. Sometimes these kits sold out within hours. Other kits took the entire month to sell out. 
Around that same time, I was promoting online courses that also had limited seats. These courses were unlike many of the digital courses of today. Almost all of the courses that we sold were based on instructor interaction – even though that interaction was still virtual, using message boards and written assignments. The instructors had limited bandwidth to handle the assignments and questions from students over the live course period. 

The Shift to Artificial Scarcity

In those circumstances, it made sense to have limited quantities. But what about fully digital products or on-demand courses? When did we start creating artificial limits on these products? 
I think it was with webinars, which often do have a limited number of seats available, depending on your platform. When online entrepreneurs realized how well scarcity marketing messages worked, they started applying the messages to products that aren't really scarce at all. 
Research has shown that many impulse buys are based on scarcity. We believe that if we don’t take advantage of an offer *right now*, it won’t be available later. The impression of scarcity is given by limited time or limited quantities. When you combine limited quantities AND limited time, then the perception of scarcity increases dramatically, and along with it the fear of missing out. 
It goes back to basic economics – when the supply of something goes down (either based on the quantity available or the time for which it is available), the value goes up. 
Of course, it makes sense. We’ve all bought things on those sales. 
But as Harvard economist Sendhil Mullainathan says, “That’s [the] heart of the scarcity trap. You are so focused on the urgent that the important gets waylaid.”
There’s really nothing wrong with using scarcity as a marketing technique, especially when it’s accurate. The problem with scarcity marketing to drive sales is when the scarcity is artificially created, like limiting the number of sales on a digital product. 
Our customers are smart. They know that there’s no reason that you can only deliver 10 more copies of the eBook at the $5 price point, or there are only 3 seats left in the on-demand course that doesn’t include instructor feedback.
At that point, using limited quantity messages to increase the scarcity perception is much like the fear and blame tactics that we talked about in the last episode. Neither type of messaging is building trust with your customers. 

Appropriate Use of Scarcity Messaging for Digital Products

There are good ways to use scarcity messages for digital products – that reward both you and your customers

The best way is to add limited time pricing or bonus offers.

  • Bonus audio download to go with the ebook
  • Discounted pricing on the course if they purchase before a specific date
  • 1:1 or small group calls to supplement an on-demand course
  • Combine your digital products with a physical component that makes the quantity scarcity easier to swallow. If you’re a health coach selling workout plans, you could bundle the digital workout plans with a high-quality journal and printable workout trackers. 
There are times that you should use quantity-based scarcity to your advantage – particularly if you only work with a certain number of 1:1 clients or run small group programs. In these instances, the quantity is one of the most valuable components of your product – so be sure to play it up!
People are willing to pay a premium for that 1 on 1 or small group attention.


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Artificial Scarcity in Marketing Messages

Artificial Scarcity in Marketing Messages