The principle of scarcity in marketing describes the tendency of people to be more motivated to make a purchase if they feel there is a limited supply, or a limited amount of time to act. Does this work? How often have you heard phrases like “Limited time only!” or “While supplies last!” or “You must call now!” in advertisements? My guess is that it works. Sometimes people have a desire to make a purchase, but are in no hurry to do so. But upon hearing that the availability might be limited, that is often a catalyst for their snapping into action. Scarcity can appeal to our emotions and be a strong motivator. Have you ever known a friend or family member who got a great deal on a purchase, causing you to think “I wonder if they have any more?” or “I wonder if I could get the same deal if I act quickly?” People have a natural desire to get in on things that are limited or exclusive. We also like to feel that we are “keeping up” and not falling behind on the latest deals.

As a business, using the principle of scarcity can be beneficial in your marketing. Is it manipulative? Of course it is. (Although sometimes supply truly is low and items are scarce; in that case, it’s not manipulative, just opportunistic.) To manufacture and create a scarcity for your products or services is an age-old tactic that will never go out of style. Almost everyone knows and understands this; it’s a part of the free-market culture. Consumers know this trick and can see it from a mile away. Although we know the trick of using scarcity tactics, we still let them lure us in. As long as we feel like we got a good deal, we’re pleased with ourselves.

Businesses need to be cautious about using scarcity tactics. Customers like to feel that they got a good deal and not that they got suckered. Running a promotion based on scarcity should at least appear authentic. You don’t want to run the same “limited time only” sale indefinitely. Think of the negative backlash it could have. People who made purchases may be left with a resentful feeling that they were tricked. The scarcity principle can also cause you to lose customers. For example, let’s say a person is interested in buying a certain product. Then a business has a “one-day-only” sale for that product. If the person is unable to go shopping on the day of the sale, he or she might put it off indefinitely. Why pay full price when there was a sale price before? Nobody wants to feel like they missed out on something better.

Here are some ways you might consider using the scarcity principle in your marketing:

• Running limited time only sales or promotions
• Offering coupons that have an expiration date
• Creating proposals that have an expiration date
• Selling items by auction
• Making products available during specific windows of time only—like the Walt Disney Studios limited time releases of their classic movies
• Offering a seminar or workshop with an advertised (and limited) number of spaces available
• Creating an event that is invitation-only
• Advertising how many of a certain product you have in stock—e.g., “We have 6 in stock. When they’re gone, they’re gone!”

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