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The Scarcity Principle And How You Can Apply It To Your Business

the scarcity principle and how you can apply it to your business
the principle of scarcity and business sales

Imagine that person you weren't interested in, till she or he started dating someone else. What do you notice in yourself? Your interest may have likely risen, right? This is because in one way or the other, the relations with the other person will now impose some form of restriction and opposition to your own relationship with the person. That’s the scarcity principle exerting its influence on you sheep-sheepishly. 

Naturally, when we feel our freedom is being hindered and threatened we revoke and want to do the opposite. In the above scenario, we may even attempt going for the person.

“The way to love anything is to realized that it might be lost”, quip G.K Chesterton. And this is one way to make your customers take immediate action by employing the scarcity principle. Ideally, what this scarcity principle will do is to instill a sense of “act now” in them. And they are most likely going to act.

This psychological principle stems from the need to ensure we have what we need to survive.

Further, opportunities seem more valuable when their availability is scarce according to this scarcity principle.

For instance, you will probably interrupt a face-to-face conversation to answer the phone call from an unknown caller. The unknown caller has a potential feature which the face-to-face conversant doesn’t have - Potential unavailability. You will quickly develop this feeling of, if I don’t pick it, I will miss the information it carriers. Thus, you will be push to pick the call.

The idea of potential lose plays a large role in our everyday decision making. In fact, people are more motivated by the thought of losing something than the thought of gaining something of equal value.

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Take for instance, a home owners told how much money they would lose from inadequate insulation are more likely to insulate their homes than those told how much money they would save. This also is applicable to business. The mere fact that a customer will loss a percentage of money if action is not taken immediate stimulate them to take that action in order not to lose out.

Consequently, as a rule; if it’s rare or becoming rare, the more valuable the product becomes.

How To Apply The Scarcity Principle To Business To Drive More Sales

This law can be used in business in the following ways;

1. The Limited Tactic:

You have probably seen many advertisers using this tactic. But it may not have been obvious to you what they are trying to do to you. “Buy now, only 4 left in stock.” The message carries with it quantity limit. Quantity limit is a tactic in which the customer is informed that products or services exist in a limited supply that cannot be guaranteed to last for long.

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For instance, you hear statement like – 100 pieces only left - "limited number offer"

When a customer is informed that certain product is in short supply and cannot be guaranteed to last long

So, you can also use this formulae on a hard-to-buy customer. Some customers that have shown interest in your product, can be made to take hasty buying decision when this scarcity principle is evoked on them.

2. The Time Limit tactic:

Using this tactic, a deadline is placed on the consumer’s opportunity to get what is being offered. Example, "last two days", "two-week-only sale" or just saying, “offer last today only” In other words, customers or prospective clients are told that unless they make an immediate purchase decision, they will have to buy the item at a higher price, or they will not be able to purchase it at all. I’m a beneficiary of this scarcity principle.

In conclusion, note that these laws should be used wisely. As a regular weekly use may disillusion your audience and cause lost trust. Thus, you should avoid it at all costs!

Another thing you should be concerned with is the genuineness of its use. You may not want to make outlandish untrue claims or lie.  For example in the number of products you do have for sale. Remember that you are aiming for a long term relationship with your customers, not to amass a short term gain.

Uchegbu Ifechukwu Princewill

Uchegbu Ifechukwu Princewill

I am an avid reader with the notion that every knowledge acquired is essential to human existence. I'm a budding writer, passionate about research to the extend that if I am not surfing the internet, I would be doing something else to gather more information.

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