Written by Canon Wing

I teach entrepreneurs and organizations the proven action steps to stand out within their market, improve the perceived value of their business, and better connect with their audience through naming, branding, storytelling, and communication platforms.

March 18, 2021

Brand Strategy Workshop—Creating Scarcity

Today we are going to explore one of the top most compelling emotional triggers in branding: Scarcity

I’m going to give you the top three most effective ways to use the emotional trigger of scarcity to keep your brand community hyped for what your brand has to offer, and at the end of this article I’m going to share a bonus tip with you that will save your brand from using scarcity in a way that has made many brands look like a bunch of schmucks!

FOMO is REAL! The fear of missing out taps into one of our most primal instincts to take advantage of limited resources, and when used in branding it can be a POWERFUL call to action. It gives people a reason to buy NOW.

When you are considering those new shoes, and it says “Only two pairs left in your size,” or when you get an email about a 24 hour flash sale from your favorite airline…and something inside goes “Oh My Gosh! I better get these things now, or else I might regret it later!” That is the power of the scarcity in branding. The consumer psychology behind it can be distilled to two basic theories: 

The Reactant Theory and The Commodity Theory

The Reactant Theory developed by Jack Brehm states that when people feel restricted in some way from taking a certain action, their desire to take that action intensifies. Think of it like a giant red button that says, “DO NOT PUSH,” soooo tempting…

And then we have The Commodity Theory formulated by Timothy Brock which states that when something becomes less available, people perceive it as being more valuable. Diamonds are an excellent example of the commodity theory, because diamonds are not at all rare, but because of the way they are marketed and distributed, people perceive them as being highly valuable.

So now that we know some of the science behind scarcity, let’s jump right in! 

Limited Time Strategy

You see, when it comes to making purchasing decisions, most people are procrastinators. When the option to buy is limitless, we tend to want to mull over it, or we want to wait and see how we feel about it later. Sometimes if I see something I like, but I just can’t be certain if it’s gonna be worth the money, or if I’ll really get that much use of it…I’ll tell myself, “Let me step away, and if I’m still thinking about it later, or if I still want it tomorrow…then I’ll get it.” Probably 9 times out of 10 I forget all about it.

The Limited Time Strategy eliminates the “maybe later,” and compels us to need to say either yes or no now!

Ford has “The Truck-tober Sales Event.” Victoria Secret’s has their “Semi-Annual Sale.” We have Black Friday, Cyber Monday, “BOGO sale this weekend only,” “this deal won’t stick around long..”

I mean yeah, all good things must end someday, but these types of ads are so prevalent because they work! The decision to buy is emotional, and usually when we make the choice to buy, the reason is less about the product or service, and more about how the brand makes us feel.

Let me say that again, the reason we buy has less to do with the product or service, and more to do with how the brand makes us feel.

The key to using the Limited Time Strategy successfully in branding so that your ideal individuals walk away from the transaction feeling good about your brand, is to have a reason why the sale is happening for limited time only. The word “because,” is one of the most potent words in marketing, and not everyone knows that. But the truth is people LOVE to have a reason for what they do. Flash sale for next 24 hours BECAUSE we need to clear space for new inventory, because I need to fill every seat in my class, because it’s my birthday month, or because I love Shark Week! It doesn’t really matter what the reason is, the important thing is that you give people that all-important why.

Limited Quantity Strategy.

This is the classic, “while supplies last,” approach to marketing, and it works really well when you have a physical product with a limited inventory, or exclusive experiences with coaches or consultants, like events or masterminds, where it’s common to cap the attendance to create a more intimate environment.

Again, the important thing about using the Limited Quantity Strategy of scarcity is that you have a reason why the quantity is limited. Limited amount of space in an event center, limited amount of resources to create a product during certain seasons, limited amount of time you have to offer for new client consults…the because is what gives people permission to say yes and feel good about it, and as a brand you want your Ideal Individuals to feel good so they come back again and again.

No matter what business you are in, Brand Loyalty is your business plan.

Limited Premiums Strategy.

This strategy works great for brands who aren’t able to provide frequent deep discounts, or don’t want to restrict the number of sales they can make. Subscription services use the Limited Premiums Strategy really well, such as HBO offering a free month of streaming services with an Amazon Prime account, or Spotify allowing listeners to try a month of music play free from ads. Sales offers today, almost always include bonuses and when the value of those bonuses are perceived as being equal or greater than the original product, people will feel more compelled to take advantage of the offer.

And now since you stayed with me, as promised I’m going to give you one super bonus tip for using scarcity to grow your brand: Scarcity has two faces. One is the face of fear of not having enough, not being enough, not knowing enough. And the other is the face of opportunity, of being in the right place at the right time, of having the good fortune to be first in line for something great…and when using scarcity, your brand is ultimately responsible for which of these experiences your ideal individuals are going to have.

So the final success strategy to ensure your use of this emotional superpower doesn’t backfire is: Be honest. 

Creating a sense of urgency by claiming false short supply, will be discovered much quicker than you might think, and your brand will lose the trust of your ideal audience.

The point of scarcity is to REWARD your brand loyalist for being fast-action takers and seizing an amazing opportunity. Not to deceive them into thinking there isn’t enough to go around. Don’t be a schmuck! When your brand says there’s a sale, your brand loyalists should be able to get hyped up with enthusiasm to jump in on a real opportunity. They deserve to feel smart and savvy, and your brand has the power to use the principles of scarcity to give them that feeling, or strip them of it. If you’re in this to learn how your brand can Come Out of Nowhere and Become an Inspiration to Millions, I suggest you reward their loyalty with honesty, and use these scarcity strategies to draw your brand closer into the hearts of your brand community.

Thank you so much for joining me! If you enjoyed this article, follow me on FB and IG, so you don’t miss a single thing! I release new content every Tuesday and Thursday, so treat these episodes as a masterclass for becoming an Inspiration to Millions with Branding. And as always the way to becoming an Inspiration to Millions starts with our motto: Love What You Do and Love How You Do It.