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