Why do we always badly want things that are in limited supply?

Hey there, 👋🏼

If you ever whipped out your wallet and paid an insane amount to get something that was almost going out of stock, let me tell you that you are not the only person who’s been affected by the principle of scarcity.

It’s not just you, it’s almost everyone who has ever come across a tag or a salesperson telling them “This is only one of the last few pieces we have left” that has responded in a similar way.

I have, too, despite having known about this principle well in advance.

My reason?

“Who would want to take the chance? What if the salesperson isn’t bluffing?”

Anyways, so the thing is that the principle of scarcity is hard-wired into our brains. We naturally desire things that are limited.

Now, let’s see how brands use this principle to up their bottom lines. Let’s take Booking.com as an example.

Booking.com, the well-known travel fare aggregator website, ingeniously applies this principle to encourage immediate booking.

Imagine this: You're scrolling through the site, and you find the perfect hotel. Close to the city center. Free parking. Free breakfast. GOLD.

As you're considering whether to book, you notice a bold message -

"Only 2 rooms left on our site!"

And it doesn't stop there. You also see

"In high demand – booked 20 times in the last 24 hours."

Booking.com has brilliantly utilized the scarcity principle here. The thought of missing out on the perfect room, especially when others are also interested, creates a sense of urgency. This motivates you to book immediately, so you don't lose out on your choice.

Now, let's talk about how YOU can apply this in your business.

Scarcity can be used in numerous ways. If you have a product-based business, you can have 'limited edition' items or 'while supplies last' offers.

For a service-based business, you can offer 'limited time' discounts or reveal the number of spots left for a particular service.

Remember, the key is to make your customers feel that they have to act immediately or risk losing out on a great opportunity. It's not about creating false scarcity but being transparent about the limited nature of your offer. And always ensure that you can fulfill the promises made during the scarcity-driven campaigns to maintain customer trust and satisfaction.

What does this mean? It means that you stay true to your offer. If you say that you WILL close the 50% discount after 5 days, that means you actually WILL. If you say that you are giving this to only 15 people, that means you actually DO.

You’ll never find mid to larger brands faltering on this promise. Think of limited edition pieces from luxury brands. If they say there are only 5 people in this world with this bag, then that’s that.

Of course, more people would want that US$ 2 million bag, but Hermès just made 3 of these Sac Bijou Birkin.

When people know you mean what you say, then they will not make the mistake of saying “Later!” trying to call your bluff.

So, that’s it from me this week. I’ll be back with yet another strategy or two next week.

Until then,

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