Using scarcity to create value

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A study asked 200 people to rate chocolate chip cookies. In one jar there were 10 and in the other there were 2. The cookies from the jar with 2 in received higher ratings- despite the fact they were exactly the same. Demonstrating how scarcity plays a role without people even being aware of it. Other research from the University of Nebraska confirmed that individuals with personality traits such as competitiveness and a need for uniqueness are more susceptible to scarcity marketing.

In social psychology Scarcity Principle is the urge to obtain something that a person feels that they will not be able to get in the future. Part of this is our survival instincts, but we also tend to value things that we cannot have and allows people to feel in control, as it shows an ability to control the environment around us.

Airlines, Amazon and Groupon use this principle well. Booking.com even have red font notifying how many times a hotel has been booked in the past 24 hours, if it’s in high demand and even when they run out of rooms:

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Scarcity does not work in all contexts as it simply does not appeal to all customers. To understand what impact scarcity marketing can have, it is vital to understand the psychological traits of their intended audience and what motivates them. Measuring the target audience is needed to understand the techniques to use in a marketing strategy, as by just understanding the psychological traits of customers you are in a better position to resonate with the target audience and predict the effect of a campaign before its launch.

 

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