The only thing more motivating than a limited supply of something is a rapidly diminishing supply of that same thing. Understanding how to manipulate those motivators is the key to survival for any internet business.
On November 11, 2016, Nintendo, one of the iconic companies in gaming hardware, released the Nintendo Classic, a mini version of the old Nintendo Entertainment System.
The Nintendo Classic sold out in a matter of minutes, driving headlines on gaming news sites, and whipping nostalgia hungry shoppers into a frenzy now convinced to rush out and buy one as soon as its available. All by a classic sales technique, the scarcity principle.
The scarcity principle is quite simple, we want what we’re afraid we can’t have. Fear of losing out on something can be an extremely powerful motivator, stoking that fear has driven online sales since the dawn of the internet.
You hear it all the time in TV ads, "act now while supplies last", which instantly creates a compelling reason that you can only have this particular item now, or creates a deadline by which you’ll lose the opportunity to buy it, limiting your free choice.
When availability is threatened for whatever reason, whether it be a deadline, quantity, or competition, we want it. Why are Black Friday "doorbusters" so popular? Besides the price drop, it encapsulates all three limiting factors in the scarcity principle.
Large consumer sites like Amazon will offer limited time sales, where the ensure not only is the expiration of the sale visible, but how many of the sale items are bought. Some sales people will regularly tell a customer that a particular product was no longer available, they will say, "it was just sold to another customer about fifteen minutes ago.
I might be able to find another in the back". When faced with the possibility of no longer having the option to buy, the customer most likely will make the purchase when the product is "found".
Whenever choice is limited or threatened, the need to retain that freedom makes the consumer desire the freedom to buy the product they want or wanted, significantly more than previously.
For the internet business that wants to boost its online sales, it would be wise to understand while you have competition in other businesses, the best thing for business is creating competition amongst your customers.
Ensure the customer knows the product or service is limited and if they don’t take advantage of the opportunity to purchase it someone else will. If you provide a service, schedule appointments in hour long blocks, appear to have at least have a very limited window to provide the service because others want it or need it too.
Selling a product? Put it on sale until the end of the week, the sale could be minimal, but that limited time to purchase the product will force the hand of a couple of your customers.
One of the biggest keys to success for any business is understanding human nature and how to properly leverage it. There may be no better tool to leverage for the modern business than the scarcity principle, use it will.