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Braedon Frank

In this week’s edition of our Friday Knowledge Share, UX Consultant Michael Dravnieks discussed how the concept of “scarcity” influences consumers from a marketing perspective.

He explained that in a world full of constant stimulus, we often rely on what are known as “information shortcuts”.

These shortcuts consist of tried and tested traditions, and patterns of behaviour.

For example, when quickly assessing quality, we often assume that the higher the price of something, the better quality it is, hence the adage “you get what you pay for.”

Or if a fire alarm rings in a restaurant, you’d often wait to see if everyone else leaves or waits for the alarm to stop before you make your decision on what to do next.

This is essential social proof – when we’re not sure what to do in a situation, we look at what others do.

The effects on perception

Michael explained that in terms of scarcity – we as people and as consumers often believe that items which are difficult to possess are better than items that are easy to possess, so we often use an item’s availability to help us quickly decide on its quality. This is the scarcity shortcut.

Michael illustrated this point when he told us all the details of the “Cookie Experiment”.

Same cookie, different jar

The Cookie Experiment was conducted by Stephen Worchel back in 1975.

Within this experiment, volunteers were asked to rate cookies based on their taste, appearance and the likelihood of buying them in the future.

Half of the volunteers were presented a jar that contained 10 cookies, and the other half were presented with a jar containing 2 cookies – both jars contained the exact same type of cookie, it was just the quantity that was different.

Cookie Jar

The results showed that the volunteers who were shown the 2 cookies were overwhelmingly more positive about the cookies in every department than the volunteers who tried a cookie from the 10 cookie jar.

This shows that, essentially, the lack of availability or rarity of something usually makes you want it more.

Another feeling that scarcity evokes is a sense of loss.

Losing your possessions

Michael told us that the idea of potential loss plays a large role in human decision making. People are more motivated by the thought of losing something than by the possibility of gaining something of equal value.

We hate to lose things, particularly if we feel a strong ownership of it.

Kids are a great example – no filters. They feel strong ownership of things like toys and hate to part with them.

This can be true when we have a wishlist on a website, and then we see the items go out of stock, you feel like you’ve lost the opportunity to purchase what you were going to purchase.

Wishlist

Using scarcity to promote your services

The three principles you should consider emphasising when you wish to utilise a sense of scarcity is as follows:

  • Quantity
  • Deadlines
  • Competition

Let’s discuss each of these in a bit more detail.

Quantity

As highlighted when discussing information shortcuts, we use an item’s availability to help us quickly decide on its quality. We think things in sort supply are worth more.

This is why highlighting informing your consumers of when your stock is low is more likely to persuade them to part with their money when the opportunity arises.

low-in-stock-jacket

Deadlines

People frequently find themselves doing what they wouldn’t normally do simply because the time to do so is shrinking.

“Limited time only”
“Offer ends soon”
“Whilst stocks last”

These are all taglines that can be used to help increase the sales of your products.

bike-sale

Competition

Michael told us that car dealerships often invite people to test-drive a car at around the same time to make customers feel as though they are in competition, and this puts the power of price negotiation in the hands of the seller. The car story – people viewing a car at the same time.

Competition also applies with businesses that have eBay accounts and place items as auctions. When an auction has a time limit and a certain amount of bidders, people may pay more than they intended to because of the fun competitive element involved and wanting to enjoy the feeling of winning.

hotel-booking

Sound familiar?

The mega sale phenomenon that is known as Black Friday uses all 3 of these principles – competition, deadlines, quantity – in a public space.

You may already know that this often leads to a chaotic frenzy of purchasing limited stock as quickly as possible to make sure the item sought after is acquired before another customer purchases it.

Utilising these principles with an online business can not only result in far more sales, brand popularity and time spend on your website, it will certainly result in far less bustle and far more safety when consumers are looking to purchase the products they need.

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