The Simple Rule That Every Marketer Forgets
Authored by Sarah Sandburg. Sarah has 10 years experience consulting Google, IBM, Microsoft and a number of startups.
John is an old school friend of mine. Over 20 years he has cemented himself as one of the best estate agents in London.
He’s renowned for selling quickly and well above the original asking price.
Over lunch, I asked him what his secret was.
He replied, ‘I know the power of scarcity’.
As a marketer well-versed in the art of scarcity, I was intrigued.
John went on to explain his infamous tactic:
“Before showing the house to anyone, I make sure to build a list of potential buyers. Always a minimum of four. This usually takes no more than a week.
I invite all four to a booking. Not to separate bookings, but to one booking at say 2 pm.
I explain that due to the house’s popularity we’ve had to start hosting group visits. Obviously, this isn’t true, but no one ever guesses.
When the first buyer shows up I immediately start showing them the house. I want them to start building small attachments to little parts of the house.
Then, usually 5 mins later, the second party show up. I ask them politely to wait a few minutes while I show the first buyer the rest of the home.
This is the dream scenario. The first guy suddenly realized he might miss out on all those parts of the house he likes. And because loses effect us more than gains, this causes him to forget the bits he doesn’t like, and focus on all the great stuff he might lose.
Seeing the line of people lining up outside, I say to the first guy, look you can have this one now if you agree to put the deposit down now.
The threat of losing affects him so greatly that he’s pretty likely to give in to the higher than average asking price there and then.
And if he doesn’t bite, I’ve got three more buyers outside who I can play the same trick on.”
John’s tactic might sound sly, and perhaps it is, but it truly emphasizes the impact scarcity has on all of us
And yes, this works for everyone. He does this with every type of house, to every type of buyer. There was no one, no matter the size of their wallet, who wasn’t affected.
What can marketers learn?
I’ve met marketers who turn their nose up at ‘limited offers’ and ‘stock must go’ tactics. But those that do clearly don’t understand their power.
Every marketer should have the scarcity principle in their armory and be ready to use it.
Here are a few ways it could be used by digital marketers today:
- Limited seat webinars. Figure out the target for your webinar and make that the maximum number of ‘seats’ available. Heavily advertise the shrinking number to your audience.
- Exclusive, timed product trials. Offer 20 exclusive product trials. Emphasize when the trial will end and how long they’ll have to sign up.
- Open ‘betas’. Most SASS companies excel here. Give your latest premium feature away for a month under the guise of an open beta (when in reality it’s finished and ready to ship). Make the feature an integral part of their workflow and they won’t be able to live without it. Or add a few ‘nice to have’ features and the loss principle (losses affect us more than gains) will cause most users buy. Even better, make the new feature an opt-out purchase and even more will buy.
As you can imagine this is just the tip of the iceberg.
Know of some other examples? Let us know in the comments.