Scarcity

Definition:

The scarcity heuristic is the tendency to see things as more valuable when they are rare or in short supply.

Impact:
Scarcity affects motivation by increasing the perceived value or desirability of an item or opportunity, thereby making individuals more motivated to act.

Description:

Scarcity is like a rare diamond: the harder it is to get, the more valuable it seems. Think about a limited-edition toy or a special pair of shoes that only a few people can own. 



Because these things are scarce, they suddenly become much more desirable, even if they aren't actually better than other toys or shoes.

Principles

  • The less available an item is, the more desirable it becomes.
  • Once people value something due to its scarcity, they may continue to value it even when it becomes more available.
  • Scarcity can overshadow rational decision-making.
  • Scarcity can trigger a fear of missing out (FOMO). The potential of losing access to something can motivate people to act.

How to apply?

  • Offer a limited number of digital product copies or restrict access for a certain period.
  • Display countdown timers on your website for special deals or release dates to emphasize limited availability.
  • Offer special discounts or bonuses to customers who purchase or sign up early.
  • Display the number of people who have bought the product or are currently viewing it to signal high demand.
  • Create digital products tied to specific events or seasons, available only for a limited time.
  • Check with A/B testing what scarcity message works best for your audience

Examples:

Application:
From Exclusive to Accessible - Armani’s Strategy
Impact:
Luxury brands like Armani create scarcity by offering exclusive products first, then expanding with more affordable options like jeans, sportswear, or sweets which still are associated with exclusivity.
Application:
How NTWRK app drives Gen Z sales
Impact:
NTWRK is basing the business model on scarcity by offering time-limited live shopping events and exclusive product drops, creating a sense of urgency and FOMO (fear of missing out) that drives purchases.
Application:
The secret of ChatGPT's Launch Strategy
Impact:
During initial launch, ChatGPT sparked curiosity and demand by initially limiting access, creating an air of exclusivity around the new AI tool.
Application:
Nike’s “Limited Edition” Strategy
Impact:
Nike fuels demand with limited-edition sneakers and apparel, creating scarcity, exclusivity, and driving hype — there is even a website dedicated just to this type of models.
Application:
From Exclusive to Accessible - Armani’s Strategy
Impact:
Luxury brands like Armani create scarcity by offering exclusive products first, then expanding with more affordable options like jeans, sportswear, or sweets which still are associated with exclusivity.
Application:
How NTWRK app drives Gen Z sales
Impact:
NTWRK is basing the business model on scarcity by offering time-limited live shopping events and exclusive product drops, creating a sense of urgency and FOMO (fear of missing out) that drives purchases.
Application:
The secret of ChatGPT's Launch Strategy
Impact:
During initial launch, ChatGPT sparked curiosity and demand by initially limiting access, creating an air of exclusivity around the new AI tool.
Application:
Nike’s “Limited Edition” Strategy
Impact:
Nike fuels demand with limited-edition sneakers and apparel, creating scarcity, exclusivity, and driving hype — there is even a website dedicated just to this type of models.
Application:
Decoding Clubhouse's invite-only success
Impact:
Clubhouse initially limited access to an invite-only system, making the platform feel exclusive and driving demand, and within a year, helping reach a valuation of $4 billion.
Application:
How the dating app Raya uses scarcity to attract users
Impact:
Raya's limited membership and waitlist create an aura of exclusivity, making acceptance feel like a valuable opportunity that users don't want to miss out on.
Application:
Seasonal Deals on Temu
Impact:
In the world where everything can be bought online, the other important factor for scarcity is the season of the year — Temu uses it to offer only holidays-related deals.
Application:
Early access to videos on YouTube
Impact:
YouTube creators offer channel members early access to videos before public release, creating a sense of exclusivity and urgency, making membership feel like a limited-time opportunity to enjoy exclusive content before the general public.
Application:
How Airbnb's “Rare Find!” label applies scarcity
Impact:
Airbnb's “Rare Find!” label suggests limited availability and uniqueness, making the property seem more desirable and prompting users to book quickly before it's gone.
Application:
Kayak's scarcity tactic
Impact:
Kayak's “only 3 seats left” warning creates a sense of limited availability, pressuring users to book quickly before they miss out on the flight.
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AI GPT Prompt

About

Experiment with this prompt to get ideas on how to use Scarcity for engagement and retention in your product.

Technique

Chain-Of-Thought

AI Type

LLM

Prompt

Propose a methodology for employing time-limited events within apps to drive engagement and encourage regular user interaction. Identify types of events, such as special challenges, exclusive content releases, or community-driven activities, that could be made scarce to increase their appeal. Plan how to introduce these events to users, ensuring they are aware of the time-sensitivity and exclusivity. Evaluate expected outcomes in terms of user participation and engagement, and anticipate how to adapt strategies based on user feedback and behavior patterns.

Related principles

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