Offer Scam-Free Scarcity

Scarcity opens opportunities to you for higher profit margins. Customers will accept paying substantially more for items that are scarce, as long as the customers accept that the reason for the scarcity is genuine.
     In a classic consumer psychology study, participants were presented a set of Nabisco chocolate chip cookies and asked to answer questions like:

• How attractive are the cookies?
• How much do you like the cookies?
• How much would you be willing to pay for one of these cookies?

     For some participants, two cookies were presented, while for the others, ten cookies were there. Which group gave higher ratings to the attractiveness, liking, and price willingness? Yes, the group that saw only two cookies.
     In another experiment, all the participants were shown an abundant number of cookies and then asked to do a different task away from the cookies. For some participants, when they returned, all the cookies were still there. For the others, most of the cookies were gone. Which group gave higher ratings to the cookies? Yes, the group that saw them fading fast.
     All the cookies were actually the same, so the higher valuation came because of the scarcity.
     Scarcity can be implied by saying it takes a long time to create the product. University of Michigan researchers showed people artistic creations and asked each to judge the quality of each work. Before being asked for the quality rating, though, the participant was told the amount of time the artist had taken to complete the work: “The artist took one year to do this.” “This piece was completed by the artist within one week.” The times given were not the actual times, of course. You know how psychologists love to lie to people.
     The purpose of the lying was to see if a potential purchaser of artwork would infer quality from the length of production time. And indeed, there was a relationship. Even though the “completion times” had been randomly assigned to the works, the longer the completion time, the higher the average rating of the work. If it took longer to do, it must be higher quality.
     Here the lying was for experimental purposes. But if your shoppers conclude you’re lying about the reason for scarcity, their irritation will disrupt sales.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more:
Explain Delivery Time as Quality/Talent
Be In Stock for the Just-in-Time Shopper
Sweeten Scarcity with Ample Warning