The scarcity heuristic is one of Robert Cialdini’s 6 principles of persuasion. It means that people tend to place a higher value on items that are scarce and a lower value on things that are abundant. As something becomes less common people hate to lose the freedom that they currently have. This means that real scarcity can be a powerful technique for increasing your conversion rate.
It has four main elements; quantity, rarity, time and censorship. Scarcity is based upon Reactance Theory. Which suggests that whenever choice is restricted, the desire to maintain freedom makes us want the item even more.
The scarcity heuristic can sometimes work against organisations which are trying to protect their self-interests. For example the National Rifle Association contributed around $30m to the Trump presidential campaign as he promised not to bring in any form of gun control. Trump even relaxed the law governing gun purchase by repealing a law Obama had introduced limiting access to firearms of people with a history of mental illness.
However, Remington, one of America’s largest and oldest gun manufacturers filed for bankruptcy early in 2018. Its sales fell by 36% during the first year of Trump’s presidency “Trump slump”. American Outdoor Brands, the owner of Smith & Wesson, saw profits fall by 90% compared to the previous year.
Until Obama talked about introducing new gun controls, gun ownership had been in decline since the 1970s. Hunting is less popular today and young people have less interest in gun ownership. But when Obama raised the issue of tighter gun controls this increased the scarcity of guns and more people wanted to buy them.
When Obama left office, the threat of gun controls disappeared. There was no urgent reason to buy guns. Trump supported the NRA’s position on not introducing any new limits on people’s ability to buy guns in the US. With no potential scarcity factor gun sales slumped.
The scarcity heuristic is a powerful weapon of persuasion and when combined with social proof it can be even more successful at driving a targeted behaviour. People value scarce goods and services more than those that are more commonly available. But also consumers hate the thought of missing out on something because it is scarce. If the communication conveying scarcity of supply is itself scarce this can further enhance the persuasiveness of the message.
When planning promotional campaigns you can benefit from scarcity by displaying an end date. Social proof (e.g. number of people looking or sales in last 24 hours) can also be used to provide evidence of potential scarcity. Displaying stock levels is another effective means of creating scarcity online. Real-estate sites on the other hand show properties that have already been sold or rented to communicate scarcity to encourage visitors not to delay contacting them to arrange an appointment for properties that are still available.
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