Understanding Scarcity: Why Are Buyers Drawn to What They Can’t Have?
Author: Jeremy Harrison
Why do people buy more toilet paper when quantities are limited?
Why do crowds line up for a “going out of business sale” at stores they never visit, buying products they wouldn’t normally want?
Why, in Shakespeare’s Romeo & Juliet, did a pair of star-cross’d lovers take their own lives?
The answer to ALL of these questions is scarcity. The roots go all the way back to the beginning of mankind. We humans have always wanted what we can’t have. So it’s no surprise that scarcity is a powerful tool in sales and marketing.
Too many sellers create fake scarcity to manipulate people into buying. But today I will show how you can find it and use it in your marketing authentically, and get better results.
6 Types of Scarcity
Dr. Robert Cialdini shared many ideas on scarcity in his classic book Influence: The Psychology of Persuasion. Here are 6 types he described, with some modern examples for each:
The most common example of scarcity is when there is not enough product for everyone who wants it. This could be due to high demand or just because of limited supply. This is especially effective when we can see that quantity dwindling. For example, if we see a cookie jar with 12 cookies, and then we later see that the jar is down to just 2 cookies, that scarcity has more impact than seeing the jar with 2 cookies from the start.
Examples of limited quantity include: people stocking up on toilet paper in the 2020 pandemic, shoppers fighting over the must-have toy at Christmas, or a limited number of tickets for an exclusive concert. It could be temporarily in high demand, or it has been discontinued and will disappear soon (like my wife’s beloved Peanut Butter Twix), or it might be a rare collectible.
Another common example of scarcity is when there’s limited time to decide to buy, to get a special price, or to have an experience.
Examples include: a store that’s closing soon, a Broadway musical in a city for a limited time, an early bird price on a newly-released product, “Today’s Deals” on Amazon, and that short-term bump McDonald’s gets whenever they roll out the McRib, even though most McDonald’s customers don’t like it.
One “Winning” Buyer
Sometimes, only one person can buy, and this can lead to buyers making bad decisions or to over-value what is for sale. It’s driven not just by the desire to buy, but also by the competitive desire to “win” and avoid missing out.
Examples include: multiple offers on a home for sale, a live auction, online auctions like eBay, interviewing for a job, or recruiting employees or athletes.
Can’t Have It
If you want to make something really attractive, tell someone they can’t have it. This traces all the way back to Adam and Eve, when God said “you two are free to eat ANY fruit in this beautiful garden, except that one over there.” And you know what happened next.
As the parent of a teenager, I’ve seen this. Tell your teenager they can’t have a privilege, or a product, an experience, or a relationship, and they want it even more. Shakespeare got this dynamic right when he wrote Romeo & Juliet. The Montague and the Capulet families loathed each other. Could it have fanned the flames for a teenage relationship that might have otherwise fizzled?
Scarce Information or Media
In the modern world, we have access to the world’s knowledge at our fingertips. In many ways, this cheapens the perceived value of that information. Media that is hard to come by is deemed more valuable. You have thousands of movies available with a single click on your $15/mo. Netflix subscription so each title doesn’t have that much perceived value, but your family’s old reel-to-reel movies from the 1960s are a priceless treasure.
Censored or Restricted Information
This is similar to the “can’t have it” example above. But it works with information, knowledge, or ideas too. In the midst of “cancel culture” where information and controversial public figures are getting banned, blocked, and censored, it may ultimately backfire. Studies have shown that information that is censored not only still impacts public opinion, but that it actually has more impact on public opinion.
An experiment was conducted with jurors where information in a case was shared, and then jurors were later told that information was inadmissible. It’s not that surprising that the information still impacted the jurors. But the surprise in the study is that the information had a GREATER effect on the opinion of jurors as opposed to juries where the same information remained admissible.
On the subject of censored information Cialdini wrote, “the irony is that for such people–members of fringe political groups, for example–the most effective strategy may not be to publicize their unpopular views, but to get those views officially censored and then to publicize the censorship.” I don’t advocate this strategy, (nor did Cialdini) but he makes an interesting point.
Use It Authentically
Scarcity is an extremely powerful psychological tool, and it can be used in honorable ways if you are willing to spend the time finding it in your marketing. I see lots of sellers create fake scarcity, and I’m never comfortable with that. They say, “Hurry, buy now because the price will increase next month.” That’s fine if it’s true, but often it’s not. I think there are more authentic ways to use it if you take some time to go a little deeper.
Look for constraints in your business. Look for limits related to production, inventory, space, or manpower. By applying some constraints, you may be able to eliminate bottlenecks and increase demand and value of your offering at the same time.