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Dramatically Increase Conversions Using the Scarcity Principle

by Josh Brown  |  
February 24, 2015
  |  3,392 views

In this article you will learn...

  • Why scarcity is an effective technique to improve conversions
  • Four ways to implement the scarcity principle for your business

To effectively improve conversions for your business, you need to understand consumer psychology.

If you understand your prospects' biases and tendencies, and you know the thoughts and emotions that they experience when they move through your sales funnel or when they're exposed to your marketing materials, you will be able to craft a strategy that accounts for those factors in order to generate more business.

The scarcity bias is one of the most important consumer biases to understand when trying to improve conversions.

The human brain has been conditioned to protect and covet resources that may disappear. Obviously, such behavior benefited our primitive ancestors, who weren't living with the level of abundance we have now. Preserving their limited resources made the difference between life and death.

Fortunately for businesses, this impulse to acquire what is scarce is wired deep into the oldest part of our brain, alongside our other survival instincts. Anything that is scarce or is threatened with being taken away immediately becomes more valuable in your prospects' eyes.


For decades, companies have exploited the bias toward scarcity to increase sales. But that doesn't mean it's not still effective. In fact, it might actually be more effective now than ever before.

Here are four ideas for how to implement the scarcity bias in your favor.

1. Create "open" and "closed" periods for ongoing offers


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Josh Brown is part of the marketing team at Soldsie, a social-selling platform that enables retailers to sell their items over social channels like Facebook and Instagram.

Twiter: @joshabrown00

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Comments

  • by Chris Hedick Thu Feb 26, 2015 via web

    I have done conversion optimization tests on this concept, increasing the size of the "only X left" text and changing color so it's more noticeable. It's kind of hit or miss, not always effective.

  • by Daniel Caccamo Mon Mar 2, 2015 via web

    The key to successfully implementing this content/context tactic depends on understanding the criteria explained in the second paragraph:' "If you understand your prospects' biases and tendencies, and you know the thoughts and emotions that they experience when they move through your sales funnel or when they're exposed to your marketing materials, you will be able to craft a strategy that accounts for those factors in order to generate more business."

    The Active Engagement Marketing Analytics at Convertant is the only product that can predict how, when, and where implementing the scarcity tactic will be most effective. And the amazing thing is that it may not always be in the "Conversion" stage of the purchase journey. Based on individual purchase journeys it could be at "Awareness", "Desire", Intent", or "Conversion".

    So why guess at this? Try Convertant and you will be amazed at what it's like to have clarity on what's ahead and how it increases conversions and revenue.

    Read more: http://www.marketingprofs.com/articles/2015/27133/dramatically-increase-con...

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