Back in the early days of the Coronavirus pandemic, the world experienced a toilet paper crisis. People began to buy and stockpile toilet paper in large quantities, despite there being no apparent cause for this behavior. The driving force behind this phenomenon was scarcity. The perception of an impending shortage made toilet paper incredibly valuable, leading to a surge in sales.
Scarcity psychology
Scarcity is a powerful motivator that influences how people make decisions, value commodities, and allocate resources, often without conscious awareness. It taps into the primal instincts related to the pursuit of essential resources such as water, food, and shelter. As a result, the brain assigns a high value to scarce items and prompts them to make decisions that optimize their chances of obtaining them. Interestingly, the psychological response to scarcity remains the same whether the item in question is vital for survival, or non-essential. Any form of scarcity, whether it involves limited supply, the difficulty of acquisition, or imposed restrictions, triggers an innate drive to possess it. This psychological quirk offers valuable opportunities for marketers to leverage scarcity in their strategies to influence consumer behavior.
Benefits of Utilizing Scarcity in Marketing
Neurological studies indicate that scarcity triggers faster decision-making in our brains. It bypasses our usual cognitive processes, prompting immediate responses of either “yes” or “no.” When something is perceived as scarce, people instinctively assign it a higher value. This principle can be harnessed to make customers value products more by incorporating scarcity into marketing efforts. Furthermore, scarcity can foster a sense of community among consumers. When only a select few can access a scarce resource, they feel a connection to one another as part of an exclusive group. Capitalizing on this exclusivity can help build stronger relationships with existing customers. It can also generate excitement around limited-edition or hard-to-find products.
Using scarcity in marketing
Some marketers may hesitate to employ scarcity in their strategies due to concerns about sounding negative. However, it’s essential to recognize two important points. Scarcity is inherent in every business. Whether it manifests as limited stock levels or the availability of seats for a course, scarcity is a natural aspect of commerce. Scarcity can also be framed positively. By presenting scarcity in a way that emphasizes excitement, anticipation, and exclusivity, it can become a source of motivation and foster a sense of community among customers. When scarcity is ethically implemented and beneficial to customers, it can be a valuable marketing tool.
Before implementing scarcity in marketing
While scarcity is a potent motivator, it’s crucial to approach its implementation thoughtfully. Merely creating artificial scarcity won’t generate the desired results. In fact, it may have a negative impact as modern customers crave authenticity. It’s essential to avoid instances where companies face backlash for disposing of perfectly good stock, as this contradicts the principles of authenticity and sustainability. Different types of scarcity will resonate with different audiences, so it’s vital to identify the type that will effectively connect with the target audience. In some cases, combining different forms of scarcity can create a powerful campaign with broad appeal. However, caution must be exercised, as the wrong type of scarcity may unintentionally alienate customers.