I had a fascinating confidential conversation this week with a company that sells luxury goods. Because I promised to keep the details private, I can only tell you in general terms about her approach to marketing and how she gets customers to wait in line to buy her special products. Imagine having the power of turning away customers because what you sell has a scarce, limited and was created with an exclusive marketing mindset from the start.
When Denise (not her real name) got into her business, she didn’t want to market her upscale, luxury product like everyone else. She knew that she needed to tap into the powerful desire people have for something they can’t easily get.
Marketing Scarcity – The Exclusive Club
She started by creating an exclusive club that you have to wait in line to become a member. There wasn’t any cost to join the waiting list, and there was no guarantee that you would be able to get into the club. But everyone had to wait in line at least one year to become a member. Waiting in line made membership valuable.
Denise also didn’t sell her goods in places that his competitors sold their products because she didn’t want any competitors. She knew that being in a store or on a shelf would give the perception that this product was like every other product on the shelf – just packaged differently. She only sold directly to members who had waited at least one year to buy from her.
Imagine the stories his customers shared that they had to wait one year to buy from him. Talk about shareable storytelling.
There was no advertising or social media campaign to build awareness like most marketing professionals would have recommended. She didn’t care about likes or followers on social media. She didn’t spend money on fancy image campaigns for his goods either. All she had was an exclusive, and mysterious waiting list and a website built on this idea of intrigue and exclusivity. Even her place of business didn’t have a fancy sign – just a small handwritten note on the outside of her business.
She only makes a few thousand units of this product each year and it is presold to her club members. Her pricing was at least five times higher than the industry average for similar goods. Her club member’s incentive to buy is based on scarcity – they can get something that others can’t get. Her list does lose a few customers each year but through word of mouth, more get in line to buy.
The Principle of Scarcity
The idea for this approach to marketing was inspired by a book.
Robert Cialdini wrote Influence: The Psychology of Persuasion – a landmark book that illustrates some key principles about marketing. The last of his six principles is about scarcity, that can make a product appear more valuable.
A classic study from the 1970’s had consumers value cookies in a jar. One jar had 10, and one jar had two cookies. Which do you think was perceived of as more valuable? Yup – the jar with just 2. We want what everyone else wants and when it becomes scarce, we want it even more.
You may recall Disney using this concept in the past when a Disney classic would go back into the Disney vault and no longer be available for purchase. I recall buying many VHS tapes for my daughter’s because if I didn’t buy, who knew when Aladdin or Sleeping Beauty would be available again?
Lessons about Scarcity – A Powerful Marketing Tool
- Could you offer a limited edition of what you sell?
- Have you considered selling a version of your product to an exclusive list who want something others can’t get?
- Is it possible not to think of selling your product not based on volume but instead, frame revenue from an exclusive, value-based and limited perspective? If you had pricing power to be 5X higher than the category, think of how many fewer units you’d need to sell.
- Do you create any mystery around your brand so that not everything is transparent and revealed? The goal isn’t to hide stuff, but to pull the curious toward you?
- Is there a luxury end of the market for your product and category that no one is paying attention to, but you could corner?
- FOMO- fear of missing out is a powerful motivator. Are you leveraging scarcity in your messaging to your customers?
- Scarcity and exclusive can also leverage time so that your product or service is only available for a limited time. I remember a fabulous restaurant in Philadelphia when I attended college called Friday, Saturday, and Sunday. Those were the only days they opened, and you could barely get a reservation. Could you do a better job of using time limitations to motivate purchasers?
- Companies that offer goods or services for sale for a limited period often experience as many sales during the last 24 hours as they do the rest of the period. If your audience is already interested in what you do, how can you create demand by pulling the product off the market? Eliminating a product only works when there isn’t a ready and easy substitution for what you sell.
- Countdown clocks can help reinforce limits and scarcity of opportunity. Think of how motivated you might be to buy when you keep seeing a clock ticking down. eBay is a great example of this principle, and people get motivated to bid during the last hour something is available.
How could you use these principles of scarcity to grow your business in an unexpected way?
Need help with your marketing? Looking for unusual ideas to help rebrand, refresh or rethink your marketing efforts? I have 30 years of experiences growing small businesses into million dollar brands. Want to connect? Text or call me at 919 720 0995 or email me at jeffslater@themarketingsage.com
Photo by Paul Dufour on Unsplash
