Using Scarcity as a Strategy for More Sales PLUS the Pros and Cons of Doing it

Scarcity has been an effective technique for many years, used by many copywriters. The modern online marketer is no different, and he or she has to rely on this technique in order to persuade customers and increase their conversion rates.

Scarcity implies urgency, and this is a universal psychological trait regardless of the person’s culture and beliefs. It works in a way that it conveys to the user the fact that the product or service is limited and that if he or she doesn’t hurry, they’ll lose their chance to get a piece for themselves.

Think about it. Everyone is using this technique. From Arctic Monkey’s tickets to Twilight books, it’s everywhere you turn. Why do you think that people collect rare items? Well, because they’re RARE of course! If they don’t get them now, someday they might not be able to.

There are of course both good and bad sides of using this strategy.

These are some advantages:

  • It can lead to more sales. It doesn’t matter what product or service, scarcity will inevitably increase your conversion rates and give you more sales.
  • It’s fun. It certainly involves your customer in the entire purchasing process and it makes it more fun to him. Why? Well he thinks he’s buying something special, his heart pumps faster, his greediness activates, he wants it, and he wants it NOW.
  • Testing and experimenting. Let’s say you introduce a new product or service to the market. With the scarcity technique, you can immediately check what’s the perceived value of your products in your prospect’s eye. This way, you will immediately know how big your market is.

There are some disadvantages too, so beware of them!

  • Impact your brand in a negative way. Customers are not stupid, and while they might fall on your marketing trick one time, they’ll quickly learn your strategy and they will resent you for it. Using this technique often is not recommended, especially if you market to the same people over and over again.
  • Looks “scammy”. Yes, just think about this. How many times have you seen ONLY 3 PRODUCTS LEFT, and you buy the darn thing. The next day, you see the same thing in stock like they have it in abundance. This created mistrust and it’s terrible for the long-term customer relationship management.
  • It can backfire. For customers, aware of this technique (especially marketers), this can actually be a reason to immediately reject your offer, even though your product or service might be potentially useful to them.

So now you know the pros and cons of using scarcity in your business. Think carefully whether this technique will be good for you and your business, and always use it with caution.

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