There’s a reason this Nugget is #1 in our library.

The concept of Scarcity lies at the core of economics, and greatly influences perceptions of value, status and our competitive desire to attain certain items over others.

Unfortunately, it's also one of the more poorly-applied concepts out there, along with Defaults and Loss Aversion.

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Mastering quantity scarcity‍

An airline stating that there's 
“Only 3 seats left” may well be using accurate data and not simply using faux-scarcity to artificially suggest that there's less supply of seats than there actually is.

However, from the user's perspective, the buildup of mistrust around the use of scarcity means cynicism is higher, so one must be careful with information presented.

Similarly, hotel websites telling you that “30 other people are looking at this item” engineer stress to compel people into action without changing supply yet highlighting demand in a manipulative way.

Instead, use quantity scarcity to focus on the craft and high quality of what you're selling.

Make your scarcity feel valuable, not stressful.

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Mastering time scarcity

Ensure that any time restriction is highlighted primarily for the purpose of maintaining the quality of your product or service, and not merely to cause stress that could be avoided.

As an example, use time scarcity to launch unique or experimental products that are only available within a particular window (say a week, month or season).

This use of time scarcity is positive and encourages brand exploration, used creatively to highlight your unique value.

There’s a reason this Nugget is #1 in our library.

The concept of Scarcity lies at the core of economics, and greatly influences perceptions of value, status and our competitive desire to attain certain items over others.

Unfortunately, it's also one of the more poorly-applied concepts out there, along with Defaults and Loss Aversion.

‍

Mastering quantity scarcity‍

An airline stating that there's 
“Only 3 seats left” may well be using accurate data and not simply using faux-scarcity to artificially suggest that there's less supply of seats than there actually is.

However, from the user's perspective, the buildup of mistrust around the use of scarcity means cynicism is higher, so one must be careful with information presented.

Similarly, hotel websites telling you that “30 other people are looking at this item” engineer stress to compel people into action without changing supply yet highlighting demand in a manipulative way.

Instead, use quantity scarcity to focus on the craft and high quality of what you're selling.

Make your scarcity feel valuable, not stressful.

‍

Mastering time scarcity

Ensure that any time restriction is highlighted primarily for the purpose of maintaining the quality of your product or service, and not merely to cause stress that could be avoided.

As an example, use time scarcity to launch unique or experimental products that are only available within a particular window (say a week, month or season).

This use of time scarcity is positive and encourages brand exploration, used creatively to highlight your unique value.

146 people were asked to rate identical cookies that were either presented in a jar as scarce or in abundance. They were then asked how likely they would be to want to eat a further cookie.

When scarce, the cookies were rated as more desirable and having a higher value. They were also seen as more valuable when going from an abundant state to scarce than when always scarce.

Scarcity comes in 4 flavors:
Quantity, Time, Access & Rarity.

Control quantity.
‍To increase perceived value of your product, release it in smaller and diminishing quantities, emphasizing its finite nature.

Restrict time.
When the clock is ticking and we’re overwhelmed, we take mental shortcuts that speed up decision-making.

Motivate customers by emphasizing the limited time remaining in which to act.

Limit access.
Restricting access to your products or services will increase desire and perceived value. Do this selectively for certain features and / or customer segments.

For instance, you might want to design valuable, unique rewards that are only unlocked for very special efforts on the part of the customer.

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32 dog-phobic children were split into 3 groups and shown 8 videos of either one child playing with a dog,  many children with different dogs or no dogs, and then asked to interact with a dog themselves.

Those who watched another child play with a dog performed far better. Those who watched many children also kept this up a month later.

Provide mental shortcuts through the judgements of others; the more people, the more persuasive.  First-time consumers of your product will benefit the most from this approach. 

Persuade with similarity. We're most influenced by those who we deem similar to ourselves. Communicate characteristics relevant to that segment, such as proximity, gender / age, profession or social class to successfully direct behavior. 

Use role-models. Understand the emotional drivers of your audience and seek out positive, aspirational individuals to direct specific consumer decisions and reinforce behaviors.

Information has a wonderful way of looking very different, depending on how it’s communicated.

From turning glasses half empty into those half-full, as Designers, we have a great role to play in using framing to help people see things differently and hopefully, for the better too.

Framing is one of your most powerful behavioral tools. Everything can be reframed, depending on what you want.

For example, online second-hand clothing marketplace Vinted has devised a clever strategy to reframe the commonly-used “Service Fee” as a “Buyer protection fee”.

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By reframing it as buyer protection and clearly communicating how this amount is calculated, this assurance goes beyond merely paying for the item.

Now, customers will also feel confident that they’re taking extra steps towards safeguarding their purchase.

Information has a wonderful way of looking very different, depending on how it’s communicated.

From turning glasses half empty into those half-full, as Designers, we have a great role to play in using framing to help people see things differently and hopefully, for the better too.

Framing is one of your most powerful behavioral tools. Everything can be reframed, depending on what you want.

For example, online second-hand clothing marketplace Vinted has devised a clever strategy to reframe the commonly-used “Service Fee” as a “Buyer protection fee”.

‍
By reframing it as buyer protection and clearly communicating how this amount is calculated, this assurance goes beyond merely paying for the item.

Now, customers will also feel confident that they’re taking extra steps towards safeguarding their purchase.

96 people were told they’d be given some ground beef to taste, with half told it’d be  “25% fat” (negative frame) and half told it’d be “75% lean” (positive frame). They were then asked to rate the quality of the beef out of 7.

‍Those presented with a positive frame rated the beef as higher quality than those presented with a negative one.

Create a frame using context, words or imagery to help others  to see things according to your needs. 

Wildly different perceptions are made possible by reframing the same evidence.

Reframe statistics as factually-accurate positives against competitors. 

Facts are dramatically reinterpreted when set amongst different data. 

• Create an opportunity to act.

We’re more likely to take up a special offer when the marketing message is framed as a potential loss than a gain (Gamliel and Herstein, 2012). 

150 teachers  in Chicago were either offered a cash incentive up front or after their students’ math test, with better results leading to more money. Subject to results, the money-up-front group would suffer deductions for unmet targets to create a feeling of loss aversion.

Teachers receiving  money up front were found to have much better results than those rewarded at the end.

Increase conversion with trial offers. Though some consumers might not be willing to pay the market price for your product, they may pay the market price to avoid it being taken away.

Offer delayed payments to shift consumers’ judgements from paying to get the product to paying to avoid losing it. For instance, a month delay in paying subscription fees. This means that any extra budgetary cost is then re-estimated as a question of how it can be fitted into an existing budget.

Replace faulty products immediately with an identical or superior model (Novemsky & Kahneman, 2005). Doing it quickly will limit the pain of loss aversion, which builds over time (Strahilevitz and Loewenstein, 1998).

153 New York pedestrians were approached by someone dressed as either a civilian, a milkman or a police officer and were asked to help out a stranger by covering the cost of his / her parked car ticket.

The more authoritarian the uniform, the higher the chance they’d give the money. The civilian succeeded only 33% of the time, whereas the police officer managed 89%.

Determine an authority figure with relative expertise in relation to the group and behavior you’re looking to influence.

Ensure that the individual is credible and trustworthy.

Communicate their authority clearly.

For instance, using authority indicators like “Doctor,” “Judge,” “Award-winning” etc. Complementing this with a suitably-dressed photo of said individual will make any request much more effective.

Add a quotation too to bolster the effect, along with any extra reputational labels they might have (e.g. academic background, specialisms, career duration etc).

Compliance varies depending on demographics.

Older people are more compliant than younger people, for instance. For the young, use culturally-relevant aspirational models to mask authority whilst also nudging desired behavior. 

Faced with a set of options, when we’re not sure what’s the “right” choice, Defaults offer a helpful guide.

They help people avoid expending vast amounts of cognitive energy to decide between what could be a large number of options.

This is especially the case for those who don’t know much about the products or services, where Default options can take away the fear of getting that first decision wrong.

They're also a powerful remedy to any potential Analysis Paralysis, and are particularly helpful when making multiple choices one after the other.

Consider that you’re buying a computer, with a range of possible customisations to various parts.

If there were no default choices set, we’d quickly become overwhelmed with what was the right choice in each step.

If you have complicated product ranges or customisations, are you setting helpful Defaults? If you are, think hard about whether these need improving to reduce effort further.

But also, a word of warning.

Defaults can be terribly misused to force people into decisions that they don’t want.

Take people down the wrong path and you’ll quickly trigger Reactance; an angry feeling where people will want to reclaim their independence, often doing the opposite of what you Default them to.

Ensure that your Defaults have peoples’ own intentions in mind and don’t deviate too far from what people would do of their own choosing.  

What Defaults are you setting? How can these be improved to help smooth out decision-making and guide people to better  outcomes, either for themselves (e.g. helping them save more money) or for the wider group (e.g. defaulting meeting times to 15 minutes instead of 30).

Defaults are set everywhere. They’re powerful and have a big influence on behavior with little effort.

Faced with a set of options, when we’re not sure what’s the “right” choice, Defaults offer a helpful guide.

They help people avoid expending vast amounts of cognitive energy to decide between what could be a large number of options.

This is especially the case for those who don’t know much about the products or services, where Default options can take away the fear of getting that first decision wrong.

They're also a powerful remedy to any potential Analysis Paralysis, and are particularly helpful when making multiple choices one after the other.

Consider that you’re buying a computer, with a range of possible customisations to various parts.

If there were no default choices set, we’d quickly become overwhelmed with what was the right choice in each step.

If you have complicated product ranges or customisations, are you setting helpful Defaults? If you are, think hard about whether these need improving to reduce effort further.

But also, a word of warning.

Defaults can be terribly misused to force people into decisions that they don’t want.

Take people down the wrong path and you’ll quickly trigger Reactance; an angry feeling where people will want to reclaim their independence, often doing the opposite of what you Default them to.

Ensure that your Defaults have peoples’ own intentions in mind and don’t deviate too far from what people would do of their own choosing.  

What Defaults are you setting? How can these be improved to help smooth out decision-making and guide people to better  outcomes, either for themselves (e.g. helping them save more money) or for the wider group (e.g. defaulting meeting times to 15 minutes instead of 30).

Defaults are set everywhere. They’re powerful and have a big influence on behavior with little effort.

161 people were told that they’d just moved to a new US state and that here, the default was (or wasn’t) to be an organ donor. They were then asked to accept or change this donation status.

Results showed that only 42% donated when the default was to opt out, but 82% when defaulted to opt in.

Defaults are powerful. They’re chosen because consumers take mental shortcuts (especially when tired) and because there’s implied trust that they’re the ‘right’ choice. Defaults also act as a reference point against better or worse options. (Dinner et al., 2011). 

Defaults can be set around anything: from the standard package you offer to new subscribers, to the pre-set top-up amount for your mobile wallet, to whether each order of pizza should come with salad. Each default can dramatically affect conversion levels and behavior.

Get the balance. Ensure your defaults feel natural and in line with consumer aspirations. The more extreme the default you set (i.e. defaulting to the most expensive option), the more effort consumers will expend weighing up the cognitive / emotional costs of not choosing the default, impacting their experience and reducing overall trust.

212 Iowan households had their energy use tracked for a year with the aim of reducing it. Half who agreed to reduce were told their name would be shown publicly in the local paper.

Those publicly committing demonstrated a 15.5% larger average reduction in energy use over winter.

Anchor any request with a leading question that supports others’ positive judgements of themselves or their past decisions.

Start with a small request that allows the respondent to remain consistent with their answer to this question. Commitments are self-reinforcing and build over time, so build slowly on this initial commitment with further, larger requests such as a future product purchase.

Make it public. Declaring an opinion to others on a subject or product will compel consumers to remain consistent with and even strengthen this opinion in future, especially if written down. e.g. asking others to tweet why they love a product will strengthen attachment to it, as well as fostering social proof for others.

84 people were shown an ad for a known clothing brand that they either had an existing loyalty to or not, written either assertively or not. Based upon the ad, they were then asked how much from a $25 gift card they'd spend.

People spent less money after viewing an assertive ad next to a non-assertive ad, especially when loyal.

Don’t misuse behavioural principles.

‍We've seen a rising use of faux-scarcity to create an uneasy sense of urgency as well as an aggressive use of Defaults that aren't in customers' best interests. Such applications turn positive activities, like booking a holiday into ones riddled with stress.

Give some control (Miller et al., 2007).

Having a feeling of choice can reduce feelings that our freedoms are being taken away. Mix Autonomy with Certainty by reminding of the inevitability ahead while granting other areas where you can give back control in meaningful ways.

Give lots of warning up-front

‍If you're planning a big change that will clearly trigger reactance (Richards and Banas, 2015), giving time for the news to sink in, let people familiarise themselves with the new, uncomfortable normal will then reduce reactance when the change does come about.

105 people were shown an online promotional offer, with the final offer value of 40% revealed either immediately or only at checkout.

Those in the extended curiosity condition were more likely to buy with the promotion than those who were told of the offer value immediately.

…curiosity will always be effective.

A recent campaign by Cancer Research UK to fill missing letters of the second-most common cause of cancer led to a 22% increase in its awareness. 

How can you use curiosity to drive a desire to learn about a new product or important message?

Create positive curiosity.

Vacation company srprs.me let you choose the number of people, dates and continent. You then get a scratch card to reveal your destination…but only at the airport!

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Use to convert free to paid.

‍Popular dating app Bumble uses curiosity to drive conversions. People who’ve already liked you are shown, but with their faces pixelated and no further information shown. Users are then prompted to buy BumbleBoost to close the information void.

408 people were shown one of three versions of a shampoo advert. The control just had the words “Say bye-bye to your dandruff” with an image of a couple. The two metaphor versions both had “You may erase anything unwanted” with either an eraser (implicit) or the bottle of shampoo (explicit) rubbing out words on a blackboard.

Results showed greater purchase intentions for the product with either metaphorical ad.

Leverage our existing understanding of the world for new ideas or concepts. Complicated ideas are best understood through existing ones. What analogies can you draw that your customers can relate to?

Easy metaphors aren’t always best. Research has found that metaphors with a little complexity are fun and act as a mild problem to solve. Use with Curiosity and Humor.

Reserve this for known brands or products; for new or abstract technology, keep metaphor complexity low.

Metaphors come in different flavors:

Juxtapositions: two images next to one another;

‍Fusions: mixing two concepts into a single one; or

‍Replacements: switching one thing for another. 

Just make sure that you harness real world understanding to help ground your new idea. 

40 people were split into two groups and shown a list made up of either 10 unrelated items (a number, a syllable, a colour, a word etc.), or 9 numbers and one isolated syllable placed second in the list. After a 10-minute reading task, both groups were then asked to recall the list.

Those in the isolation group successfully recalled the syllable 70% of the time, as opposed to 40% in the control.

Use complementary contrast. When showing a list of similar products (e.g. beer), weave in a contrasting product to create complementary cross-selling (e.g. nuts) or up-selling (premium beer) opportunities. 

Use contrast for clarity. If you offer a range of products, draw the undecided consumer to a strategic option, preventing choice overload and assisting sales. How might customers become overwhelmed with your range? How can you create a clear sense of contrast that avoids this negative feeling?

Contrast through context. If your brand is familiar, how can you place it in relevant yet unexpected contexts to heighten recall? For instance, British food delivery service Deliveroo could have a movie tie-in shot in London, where its turquoise drivers whiz by in the background 2-3 times over the course of the narrative. 

218 people were split into 3 groups, given either a coffee mug or a chocolate bar and told they could swap their item for the other; or given neither and told they could choose either.

Those who’d been endowed with either item were far more likely to stick with it than those who were given neither.

Perceived ownership is powerful, allowing consumers to attribute increased value and emotional connection on what you’re offering, creating a strong desire to buy that increases over time.

It’s driven by a price gap between how much we’re willing to pay for an item and the price we’re willing to sell it for. This is due to a mix of Loss Aversion, Framing (i.e. buyer or seller) and the evolutionary advantage of overvaluing our tradable possessions. Doing so increases our resources and chances of survival.   

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Allow people to feel ownership of a product prior to purchase. Examples include: making it effortless to add that product to their basket, visually personalizing a product early in the ordering process, highlighting how soon it could be at your door or allowing free week-long test drives of that car you’ve always wanted.

90 people were asked to solve 50 puzzles in either 10 or 40 minutes. A time-saving notification stating that “This question isn’t worth any points. Press A to skip” would pop up for half the puzzles.

Results showed that the time-scarce group ironically were more likely to miss the time-saving notifications due to their heightened focus on task completion.

‍Time Scarcity increases conversion under a few conditions

Make sure your use of it is on-brand, authentic and not overly-aggressive to avoid harming long-term trust and loyalty.

A big clock with red flashing text may boost sales in the short-term but risks damaging brand perceptions in the longer term and will lead to Reactance in the more behaviorally-aware and in more mature markets with stronger competition. 

Use time windows for excitement.

Particularly for experiments with new ideas or for seasonal Limited Editions. Starbucks’ Unicorn Frappucino was on sale for 5 days only. It sold out in just 3 and generated 160,000 Instagram posts. 

Develop novel ways of saving people time.

‍People who spend money on time-saving purchases report greater life satisfaction (Whillans et al, 2017). 

Amazon and Sainsbury’s are exploring no-queue, no-till shopping. Just scan on the app and leave. How can you free up even a few minutes of our most precious commodity?

88 household individuals were split into three groups and  asked to either wear a badge supporting a  charity, asked to wear one along with another family member or not to wear at all. That same evening, all groups were then asked for a financial donation to the charity.

Those who were first asked the small request were far more likely to go on and donate money than those who weren’t.

Start with a question promoting reflection on one’s values. Their answers will create a desire to be consistent with their beliefs.

Have people perform a small related action. e.g. People who put a small “Drive carefully” sign in their window are more likely to follow the instruction than those who merely say they will. Frame it as a social norm.

Prime the ‘helpful’, ‘cooperative’ ‘supporter’ with positive feedback prior to a future request. 

Make the target request a continuation of the initial one. The more similar the activity, the greater success. Also balance your request sizes. If the initial request is too big, people won’t do it, never getting to the target request. But too-small tasks will widen the gulf between the two.