Scarcity
Definition:
The scarcity heuristic is the tendency to see things as more valuable when they are rare or in short supply.
Impact:
Motivation
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.
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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:
Giorgio Armani
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.
NTWRK
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.
Chat GPT
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.
Nike
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.
Giorgio Armani
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.
NTWRK
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.
Chat GPT
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.
Nike
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.
Clubhouse
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.
Raya
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.
Temu
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.
Youtube
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.
Airbnb
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.
Kayak
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.
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.