Scarcity offers limit the supply of a product or service as a way to increase demand and urgency of an offer.
This is based on the concept that the less of a supply of a given item, than demand will increase, as customers often wait to act until the opportunity to purchase is just about to be removed from their control.
Look around, there’s a lot of scarcity in marketing. It seem like almost everything is in limited supply.
Scarcity can also be used to drive up the perceived value of a given item. We all know that far more Chevrolet's will be built each year then Cadillac's. While both cars should take us from point A to B, the perception of the Cadillac is that is will do so with greater luxury, quality and status. As a result, we are asked to pay more for it the opportunity to own it a Cadillac over a Chevrolet.
It is said that the miners of a certain clear precious gem stones practice scarcity marketing and offers. The actual amount of their inventory available would considerably lower their prices if they were to mine in keeping with the supply of available raw gemstones.
Their ability to cut, polish and refine stones could also be considerably increased. But the idea of two months salary for a purchase seems to increase the perceived value of these gemstones, and the prices smitten lovers are willing to pay for them.
- Are there products or services we offer that are perceived as scarce and allow us to charge great prices for them?
- Are their parts of our industry where scarcity or over abundance rules how these are priced?
- How would this offer work as a part of our overall marketing mix?
Budget: No idea how to put a dollar figure on this marketing idea, it could be worth a small fortune to you.
And, last but not least, a few scarcity ideas for you to test out:
- Last Chance — Usually a reminder that you’ve previously made an offer, but time is running out. If you say “last chance,” mean it.
- Limited Edition — Good for collectables, such as art, plates, coins, special book printings, etc. The idea is that the item is special in some way and that there are only x number available, or there’s a time limit.
- Enrollment Period — You establish a “window of opportunity” when prospects may enroll for insurance, home study, business services, whatever.
- Pre-Publication Offer — A popular offer used by book publishers, especially for expensive reference works. The rationale is that you need to plan your print run, so you offer a special deal and reserve copies for readers ahead of time. Readers are guaranteed to get a copy and save money, usually 10 or 15% off what the general public will pay.
- Price Increase Announcement — If prices are going up, you can announce it ahead of time so people can take advantage of the old prices one last time or stock up.
- Charter Membership — You offer a prospect the chance to be one of the @257;rst to subscribe to a publication or join a club or organization. There is generally a special introductory price, a gift, or other incentives.