The art of crafting scarcity.
Welcome to the “Becoming a B.S. Artist” series, where you will learn the fine art of using behavioral science tools to motivate action. So far, we have covered Feedback Loops and Choice Architecture.
You can click on the image below to read all four posts in the series.
This B.S. Tool: Scarcity.
Scarcity has its roots in basic economics: when the demand for a product or opportunity is greater than the supply, the value of and desire for that item increases.
Often, this happens organically, like when supply chains get disrupted, and we can’t get the items we want (e.g., Suez Canal blockage), or when there are capacity constraints for very popular items (e.g., tickets to a Taylor Swift concert).
As a behavioral science (B.S.) tool, scarcity can be used as a marketing method to create a sense of urgency and demand for something that is limited in quantity or has a deadline.
Unfortunately, many businesses use scarcity in ways that stress us out and are borderline unethical. Have you tried booking a hotel room or airline reservation recently? If yes, you likely encountered a flurry of scarcity tactics thrown at you like this:
Yuck.
No one wants to feel this kind of stress or pressure when trying to complete an action.
This edition of B.S. Artistry will guide us through using scarcity in ethical ways that motivate action without stressing out our audiences.
Note: I am not covering the topic of mental scarcity in this post, which describes moments when a lack of brainpower or mental bandwidth makes it hard to solve problems, reason, or retain information. Sendhil Mullainathan wrote a fascinating book on mental scarcity, which you can learn more about here.
Is scarcity a good fit for your project?
The scarcity approach might be a good fit for your project if you offer an item or experience that meets one or more of the following criteria.
The offer is time-limited = Not available after a specific date. This category can include live webinars and courses with registration deadlines or matching fund drives where people must donate by a deadline to unlock the matching funds.
The item is supply-limited = A one-time order was produced, and additional items will not be made available. In 2023, the Red Cross gave out Snoopy shirts to anyone who donated blood “while supplies last.” I shared more about this example in my post about offering rewards to audience members who follow through on the desired behavior.
The experience is access-limited = A limited number of spots to an event are available. This may apply to a workshop you’re hosting with limited spots or tickets you sell to a special event.
The Global Citizen organization taps into access-limited and time-limited scarcity by offering ticket raffles for members who earn points by completing environmental actions.
The item or experience is rare = The offer is unique and uncommon, like the chance to meet a celebrity or bid on an extremely rare item during a silent auction.
If the product or experience you currently offer does not meet any of the above criteria, consider if you could increase the scarcity by limiting its availability. For example, you can create time-limited registration periods for on-demand courses instead of making them available for purchase all year round.
But please: scarcity should not be used to gatekeep important resources and experiences. These techniques are meant for low-stakes events, like producing a limited edition t-shirt.
Why scarcity works.
Let’s add a hint of behavioral psychology to the mix!
FOMO (Fear Of Missing Out) is the short answer for why scarcity drives action. When there is limited supply, it feels like something we must have.
Interestingly, this holds true even when we perceive something as scarce, regardless of whether it’s explicitly promoted as a limited item or experience. The home goods store TJ Maxx taps into perceived scarcity by stocking small amounts of random, unusual pantry items in its food aisles, which makes shoppers feel they’ve discovered a “rare find.”
Feeling a sense of achievement for “winning” a limited item or experience is another reason why the scarcity method works. It feels really good to those who get the “prize.” It can even reinforce the audience’s sense of belonging with your cause and community of support, which is an excellent way to keep audience members engaged for the long run.
What you need to get started.
It’s time to gather the materials we need to design and implement scarcity. The four essential items you need are:
→ A special item or unique experience you want people to buy or register for. This can include, but is not limited to, webinars, workshops, courses, events, swag, memberships, field trips, conferences, etc.
→ A real and relevant scarcity aspect of the above-mentioned item or experience. This means it is truly time-limited, supply-limited, access-limited, or rare; you’re not faking it.
→ A way to communicate the offer to audience members and provide regular updates on availability.
→ Real-time tracking of purchases and registrations to know when sales limits are reached or time limits expire. Ideally, this process is automated so the purchasing window closes when supplies or time have run out.
How to implement scarcity.
It’s like using a glue gun but a lot harder. Sorry!
Be specific and clear about what is limited.
Instead of simply telling the audience that “time is running out,” be clear about which factors are scarce.
If the offer is time-limited, be clear on the deadline. If supply is limited, be upfront about how many items are available. We want to avoid being vague when drumming up urgency, which can unnecessarily stress the audience.
I also recommend being clear about how many items or spots a person can purchase. A dark side of scarcity is that it can trigger competitiveness, leading to resource grabs (remember those toilet paper hoarders during the COVID-19 pandemic???). Setting clear purchase limits at the start can prevent this from happening.
Create equitable pathways to access.
If you offer something with a price tag that is limited in supply or access, consider how to make the offer available to those with less financial resources.
This could involve putting aside a selection of seats or items to be offered at lower prices or for free. For example, conferences typically provide a set of scholarships to cover the cost of registration fees to make the event more accessible to everyone.
Promote the benefits more than scarcity.
When promoting the product or experience, focus on the unique benefits the audience receives from following through on the registration or purchase instead of over-emphasizing the scarcity of it. FOMO is most effective when the audience perceives the event or item as desirable; therefore, we must keep the value and benefits front and center.
Provide frequent updates.
Time moves fast and people are forgetful, so you should provide frequent updates on the amount of time, seats, or supplies remaining. The FOMO reaction will likely kick in as time and supplies run low.
Help the winners feel like winners.
Sending a celebratory message to everyone who secured the item or seat helps reinforce their sense of accomplishment and belonging. Let them know that you “see” and appreciate their effort.
Help the “losers” feel like winners.
A downside of the scarcity approach is that most people won’t get access to the item or event; it’s the nature of anything that is limited. But that doesn’t mean those audience members should feel like they’ve missed out altogether.
Consider offering a smaller “consolation prize” for an item that sold out, like a discount on other available items. Research has shown the potential for consumer backlash when highly-prized items sell out (i.e., supply-limited items); offering suitable alternatives can prevent this from occurring.
For time- and access-limited events, you can offer to share the recording or host a waitlist so people can be the first in line for the next one. These runner-up gifts help keep interested participants engaged in your work beyond the one-time event.
Food for thought: Scarcity of natural resources.
Since we are all working to protect the environment, we may instinctively associate the word scarcity with the planet’s natural resources. Most of us are familiar with the “tragedy of the commons” phrase, which highlights how scarce resources can prompt humans to extract as much as possible until resources are depleted.
Scarcity cues can, in fact, trigger competitiveness that leads to resource grabs and selfishness. However, this study shows that people will behave generously in times of scarcity if they receive personal gains in the process. Here are two excerpts from the authors’ findings:
“[O]ur results offer implications for policymakers designing communications intended to promote communal behaviors in service of the greater good. For example, in contexts where scarcity-related cues are present (e.g., times of recession or commodity shortages) communications should emphasize the personal benefits associated with contributing to the greater good (e.g., paying taxes) in an effort to promote compliance. For instance, paying taxes might be framed as a means to demonstrate one’s economic success.”
“[M]arketing communications that highlight the prosocial benefits of the product (e.g., reduced greenhouse gas emissions [by driving electric cars]) may be less effective than communications emphasizing the personal benefits one can accrue through purchase (e.g., saving money at the pump).” » Roux et al., 2015, p. 628.
You’re now on your way to becoming a certified B.S. Artist!
→ You can visit all 4 B.S. Artist posts here at any time.
Additional learning resources:
This post by Boluwatife Sokunbi provides a concise summary of using scarcity ethically.