What made the 1909 Honus Wagner baseball card worth $1.1 million at auction?
Why were people willing to pay to get an invitation for a free email account from Google?
How come Seth Godin’s Whiteboard Seminars always sell out, even at $1,650 a pop?
In a nutshell, opportunities of all kinds seem more valuable to us when they are less available. We are often more motivated by the prospect of losing out than by gaining something of the exact same value. For example, studies have shown that physician’s messages that encourage people to stop smoking are more effective when stating the number of years of life that will be lost rather than similar messages that stressed the number of years of life that could be gained.
Creating fake scarcity to manipulate prospects rarely works anymore, and it’s just bad business. However, building natural scarcity and exclusivity into your offerings is a very smart business strategy that can pay off handsomely.
The Long Tail world is built on scarcity. If you have valuable niche information, charge more for it and offer it to only a certain number of buyers. When you hit the number you set, pull it off the market. You might just find you made more money than if you had offered the same product to all takers for a cheaper price.
Most products can benefit from scarcity, even if they are a commodity. The limited time pricing offer is an old standard. But why compete on price? Offer something else as a bonus along with your product for a limited time instead. Make it something valuable so that your prospects will feel like they might be missing out on something good if they pass.
How does scarcity relate to blogging? Well, scarcity is a tool best used off road in more concentrated sales efforts that you point to from a blog post. However, I expect exclusivity to increase in blogging circles, with invitation-only communities and insider-only subscriptions, even if there is no money involved.
Because you want your audience begging to listen to you, not the other way around.
But good blogging already provides scarcity benefits. In an attention competition, you’re winning a big part of the business battle if you are creating something that makes people feel like they are missing out if they don’t continue to read, listen, or watch. Your competitors with their static brochure websites are not doing anything worth paying attention to, and therefore they are losing.
You’re also speaking naturally via your blog about what you’re working on, who you’re working with, and how well things are selling. Combined with authority and social proof, people will start to feel like you have something to offer that they simply do not want to miss out on.
Being able to have this type of conversation with prospects is the key to business blogging return on investment, plain and simple. If you’re not blogging yet, get started as soon as possible.
The benefits of early adoption are available for a limited time only.
Reader Comments (10)
I agree that the future will be private, subscription based, and littered with piracy.
If structured upfront correctly, piracy can be the best thing that ever happens to you. But you know that. 🙂
Chris P. says
I don’t know if I agree on the subscription-based part of things, inasmuch as I think just about all forms of information will be freely available.
I do, however, think that viral promotion through the use of “limited time” offers like Brian spoke about will become the most effective marketing tools of savvy businesses. This limited availability will lead to the piracy, which will only further extend whatever popularity was gained in the initial run of the offer.
Shrikant Joshi says
Natural scarcity in an age of (un)healthy competition seems unlikes. It’s a dog-eat-dog world out there, Brian. But, I don’t have to tell you that.
As for creating scarcity artificially, It reminds me of the South Park episode “Cartmanland.” If you ever get a chance to watch it, ensure that you drop your latest customer like a hot potato and watch it.
If you already have watched it you’ll know what I am talking about.
Chris, freely-available information is the problem — people devalue it. The sales volume of niche information products has gone up, not down, with the explosion of free info on the web.
Shrikant, some of the most profitable one day information sales have come due to using natural scarcity — John Reese limited the sale of his Traffic Secrets home-study product to 1,000 only, sold them all in one day, at $1,000 each (thanks to a brilliant launch campaign). That’s a million dollars in one day. My dog would be eating pretty well. 🙂
Scarcity is one of the hardest techniques to get your head around, but it’s also one of the most powerful. It’s the basis of economics itself, after all.
I’ve got a lot of other examples that were beyond the scope of this article, and I’ll share those with a select few people. 🙂
Chris P. says
Shrikant Joshi says
I am not arguing. I agree that natural scarcity can make you lots of money, provided:
1. The product is really good
2. The pre-launch hype is fantastic.
3. One of the above
With John Reese I suspect it was option (3). Or may be even option (4). I am not debating anything.
The niche is a valuable market if my offerings are tailored for the purpose. For those of us, looking at a larger market, it is just that – a niche.
Funny, you mentioned scarcity as a technique. I tend to think of it as an advantage – fair or unfair, is situational. And there are those that can create scarcity – like the prodigal salesman who sold an ice-box to an Eskimo or the prodigal comb to a bald guy.
And doesn’t the free copy of the Viral Report contradict your scarcity hypothesis?
Viral Copy had nothing to do with scarcity at all, of course. The fact that it had to be 30 pages and still free was necessary to overcome abundance devaluation though. 🙂
Aaron Pratt says
This is an outstanding Zen Place, bookmarked!
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