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In this article
In this post, we’ll be finishing up our Dr. Cialdini’s 'Principles of Persuasion' series with the Scarcity principle.
Scarcity. FOMO. Exclusivity.
We know it by many names, but it's all fundamentally about the same thing: if it's hard to get, it must be worth something.
The Scarcity Principle: People attach more value to things that are few in quantity.
This principle can be commonly used in two broad methods:
- Limited-number - Item is in short supply and won’t be available once it runs out.
- Deadline (Limited-time) - Item is only available during that time period.
These tactics are used frequently in offline and online stores, as they are low-risk and easy to manage. Comparatively, maintaining a social media account for social proof, or giving away something for free to elicit the reciprocity effect would require more effort.
Here are some examples of the Scarcity principle used in marketing:
A. Limited - Number Tactics
“Only X left!”
1. Booking.com - Limited rooms left
In his book, Dr. Cialdini mentions an experiment by Stephen Worchel, where participants were asked to rate the quality of cookies in a jar. Some were given a jar with ten cookies, while others only two cookies. Some of them who had two cookies were initially given ten cookies, which were then reduced to two cookies.
The results indicated participants who had the number of cookies reduced from ten to two rated their cookies the highest.
This showed that:
We value more those things that have recently become less available to us.
Most people have experienced a situation where a hotel that they’re considering suddenly becomes fully booked just because they waited for a couple of days.
A popular tactic used by travel sites, Booking.com displays how many rooms there are left for some hotels, so customers will have to hurry.
To play up the scarcity game, they also indicate how many people are currently viewing the same hotel, so customers will have to act even faster.
"Invite Only!"
2. SocialCam – Released app to a small group of people, and gained one million users in four months.
When Justin Kan released SocialCam in March 2011, he focused on opening it to a selected group of people, who could then invite others.
We started with a core nucleus of users that we thought would spread it to everyone.”
Thanks to this strategy, they acquired more than a million users in four months. They surpassed 16 million downloads by July 2012 and was acquired by Autodesk for $60 million.
3. Spotify – Used invite-only to manage the influx of new free users and encourage paid subscriptions.
Spotify was hugely popular in Europe, and its release in the US was highly-publicized.
But instead of opening the floodgates to let the public in, they chose to open their free service through invite-only.
Users could either wait for an invite or pay $4.99 or $9.99 for Unlimited or Premium respectively.
It worked because their arrival was highly-anticipated, and they were better than their competitors. People had to wait in order to be the first the try out the best music streaming service around.
For those who didn't want to wait, they could always opt for a paid subscription.
Read next: How Spotify Built A $5B Business With >75M Music Lovers Through Word-Of-Mouth
4. Mailbox – Created an in-app waiting line system to encourage others to join and find out what the hype is about.
Mailbox used a slightly different approach, by combining exclusivity with social proof.
Users who wanted to try out the service had to sign up for a reservation, where they'd be shown the number of people who signed up before them, and those after:
This gave users an idea of where they are in this virtual waiting line, which some users would check back regularly to see the counter move.
The Mailbox team explained that the waiting line was established to keep the number of users under control so that their servers wouldn't crash.
Judging from how insanely long the waiting line became, I'd say that was a good move.
Like Spotify, customers were willing to put up with the wait because existing email solutions weren't exactly fantastic.
5. OnePlus – Sold close to one million phones purely via invites, without selling through retail stores.
The OnePlus One is the first smartphone sold by OnePlus and became known as the phone that wasn't sold in stores.
When OnePlus released the OnePlus One in 2014, it could only be bought through an invite, which wasn't something consumers were used to.
We're used to go to a store, trying the phone out for ourselves before actually buying it. So being denied that opportunity made it all the more special.
Everyone wanted to know more about the enigmatic phone.
This led to more than 25 million visits to OnePlus' website in less than a year after the smartphone's launch, and close to a million sales.
Read next: How OnePlus Got Word-of-Mouth With A $300 Marketing Budget
6. Quibb – A link-sharing site with an acceptance rate of less than 50% and a background check.
Up till now, most of the companies featured here utilize the exclusivity effect to generate hype and/or control the number of users.
Quibb uses it because it wants only the best of the best to join their community.
As a link-sharing site for professionals, Quibb doesn't want users who post links of sub-par quality.
Therefore, people apply for membership and wait with bated breath for notification of their acceptance. They do so, knowing that less than 50% of applicants are actually accepted.
The best part? The founder, Sandi MacPherson is the one who does the vetting.
Users who get accepted find themselves amongst a super high-quality crowd, filled with industry experts, CEOs, and influential professionals.
By choosing to reject more than half of all applicants, Quibb has succeeded in creating a community that is truly exclusive, and also extremely high-quality.
So it's unsurprising that Quibb has mentioned plans to keep the website members-only forever.
7. The 11K Club – The club that thousands knew nothing about, but signed up because it's exclusive.
The 11K Club is a mysterious club with only 11,000 slots, and one exceptional benefit.
But apart form that, no one knows what the club is for, or what that benefit is. The only way to know is to join it.
With no information to consider, the 11K Club was a social experiment on how alluring exclusivity can be.
Co-founder Steve Whyley had this to say:
I'm trying to see if people will sign up to a club that they know nothing about purely because it's exclusive and because they fear they'll miss out.
And indeed they did, for the 11K Club received way more than 11,000 applications.
It is perhaps the best proof that exclusivity and curiosity go hand in hand, and to great effect.
People can't handle the fact that they could miss out on something. They want to be part of the 'club,' the exclusive few.
Out of stock
8. Ministry of Supply - Out-of-stock size indication
When selecting designs, sizes, and cut of the apparel you want, MoS indicates which sizes are currently out of stock.
This plays nicely with the principle of social proof (a lot of people have bought this particular design, so it must be the best).
Of course, you’re encouraged to give your email address so you can be informed when they restock.
Read next: How a Small Menswear Brand Utilized Word-of-Mouth to Get Over $420,000 On Kickstarter
B. Limited-Time Tactics
Daily Deals
9. TigerDirect.com - Daily Slasher Deals
TigerDirect.com uses this tactic perfectly: not only do they have deals every day, they even have a huge countdown timer that indicates how much more time customers have to grab them.
10. Amazon - Today's Deals
Amazon also has daily deals, which cover a wide variety of items, from kitchenware to ebooks.
Looking at the various tabs, they also have specific deals for certain holiday seasons, like Black Friday and Cyber Monday.
Read next: Lessons from Amazon Prime's Referral Program
Holiday Specials
11. Modcloth - Holiday Sweaters
Some retailers, such as ModCloth, create special designs just for certain holiday seasons. These designs are only for sale during the festive seasons, so they count as limited-time offers as well.
Read next: How ModCloth evolved from a 1-woman firm to a $100m company
12. Starbucks - Christmas Holiday Frappuccino Drinks
This applies to F&B too.
I love it when Christmas is here because then I’ll be able to get my hands on the peppermint-flavored ice-blended drinks from Starbucks and Coffee Bean. It happens only once a year, so I make it a point to enjoy it whenever I pass by an outlet.
I probably wouldn’t care that much if it were sold all year round.
According to Bonnie Riggs, a restaurant industry analyst with NPD Group in Chicago, this tactic works well because:
They expect to pay a premium because the specialty drinks, the iced frozen slushy drinks, are not something they can replicate at home or easily get at retail.
It’s the seasonal exclusivity that makes such festive drinks special.
Read next: Branding and Stereotypes: Using Starbucks To Catch White Girls
Clearance Sales
13. Kohl’s - Clearance sales
Another good way to utilize the scarcity principle is to have clearance sales.
Customers know that they have to act fast, as these items usually belong to previous seasons, or are no longer in production. Stock and sizes are therefore quite limited.
C. One-of-a-kind Specials
The following examples sometimes utilize the limited-number, limited-time or both of these techniques.
They are also from one-off events (e.g. collaborations, anniversaries), so products from such events are usually quite limited in stock.
Collaborations
14. HAiK W/ Kaibosh - Two-way Reversible Sunglasses
This collaboration between two Norwegian brands, HAiK and Kaibosh, resulted in special sunglasses that can be worn both ways to show off different frames.
The good thing about collaborations is that, not only can you tap on the knowledge, expertise, and resources from both sides, the resulting spark is something that will forever be special and one-of-a-kind.
Nobody knows whether they’ll collaborate again in the future, so fans will have to buy them before they’re all sold out.
Anniversary Celebrations
15. Evo - Anniversary Sale
Anniversaries are a good way to celebrate the history of your brand, and also a good opportunity to thank your customers.
Sure, you could have hold anniversary sales every year, but even yearly sales can be effective in drawing customers in so they won't miss out.
If your brand has been around for a while, like Evo, then your anniversary promotions can utilize both the principles of scarcity and social proof.
(Speaking of anniversaries, this year also marks the 75th birthday of a certain superhero...)
One-off Special Events
16. The New Yorker - Opens archives for free for 3 months
While revamping its website, The New Yorker released all of its archives since 2007 for public reading for three months. During that time, they would collect user data to determine how they would charge for their metered paywall after the three month window.
Although slightly different from the other examples listed here, the scarcity principle still applies. Readers who are non-subscribers would jump at the chance to dig into the massive pool of articles that they can now read for free.
While we’re not sure how their sales would be after the new metered paywall goes live, they are definitely generating a lot of attention and interest. Not to mention the free gathering of user behavior data for their future analyses.
Pre-orders
Products that are launched through crowdfunding sites like Kickstarter or Indiegogo are almost always at pre-order stages, so projects are able to offer exclusive incentives to attract funding.
17. Memobottle - Green caps for Kickstarter backers
Many projects offer exclusive features that are only available during the crowdfunding window. These might include:
- products in special colors
- products made from special materials
- pre-retail price discounts
- giving away extra freebies
This gives backers extra motivation to back it now, knowing that this is the only time they’ll be able to enjoy this deal.
The folks from Memobottle offered an exclusive green-colored lid for project backers, as a way to thank them for hitting the $250,000 stretch goal.
Read next: How 11 Innovative Companies Use Referrals to Drive Pre-orders
18. Hush Smart Earplugs - Kickstarter Discount
The Hush smart earplugs were available on Kickstarter at a much-cheaper pre-retail price.
Limited quantities per tier and limited time for the project meant that backers had to act fast to cash in on this special deal.
Read Next: How 13 Of The Best Kickstarter Projects Achieved Success With Word-Of-Mouth
D. Utilising competitions
Another interesting finding from the Stephen Worchel cookie experiment revealed that cookie ratings were highest when experimenters told participants that the cookies had to be reduced due to social demand (as compared to it being a mistake).
Our inclination to want things more because other people also want them is often utilized in auctions or bids.
19. eBay Auctions
In auctions such as those on eBay, customers are not only motivated by the desire to own something exclusive, but to beat other people, as well as do so within the bidding window.
The indication of the number of bids overlaps with social proof, and increases the perceived importance and value of said product.
eBay also has live auctions, where each item lasts for ONLY two minutes. Talk about limited time only!
Conclusion: We are always drawn to things that are exclusive and hard to come by.
Scarcity works so effectively because we've evolved to assume that things that are difficult to obtain are usually better than those that are easily available. We link availability to quality.
To recap: scarcity can be presented in mainly two ways: limited-number and limited-time. One-of-a-kind events and festivals can be used to elicit the effect as well.
In addition, we tend to attach more value to things that other people are competing for, a phenomenon that is part of social proof.
With this, we officially conclude our Principles of Persuasion series! Here are the rest of the principles, with examples:
- Reciprocity
- Commitment (and Consistency)
- Social Proof
- Liking
- Authority
- Scarcity [you are here]
Stay tuned as we will cover the elements in Chip and Dan Heath’s Made to Stick, showing you how some brands make their brands and stories memorable!
Here are a couple more resources that we think might be helpful for you:
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As a finalist in Esquire's Best Dressed Real Man contest, Samuel is ReferralCandy's fashion eCommerce expert and resident sartorialist. He is obsessed with human behavior, social psychology, and handstands. He is also the lead calisthenics trainer at Weightless.
