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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205 people were shown a description of a digital camera printed in a font that was either easy to read (high fluency) or hard (low fluency).

Results found that when easy to read, only 56% delayed choosing the camera, next to 71% when hard. Why? Fluency breeds familiarity, which we value greatly, because it’s unlikely to be harmful (Zajonc, 1968).

Keep it short. Whether for marketing, nudges or political persuading, low syllable, easy-to-conceptualize slogans will feel dramatically more intuitive for consumers. Next to a competing message, they’ll believe the one that’s easier to understand (Schooler & Hertwig, 2005).

Repeat. Repeat. Repeat. The mere act of repeating your message will increase its familiarity, which itself increases the extent to which it’s seen as true (Reber & Schwarz, 1999). Keep it consistent across your team and put it everywhere.

Keep product benefits concise. Consumers actually like a product less the more positive traits they bring to mind (Menon & Raghubir, 2003).  This is because they start to associate your product with greater complexity and lower fluency. 

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.

22 students were shown a range of graduate yearbook photographs a varying number of times for 2 seconds each. They were then asked how much out of 7 they liked each person.

Results showed that the more times they’d seen a given graduate photo, the more they liked them.

Expose the unknown within the known.

Create trust for new, unfamiliar products by sample-bundling with existing products. UK supermarket, Waitrose did this expertly when it first introduced kiwi berries, managing consumer unfamiliarity by bundling a small free sample with large packs of trusted blueberries.

This approach is known as a Foot In The Door.

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Exposure first. Behavior change second.

Reduce people’s Risk Aversion by taking a staged approach to rolling out new ideas or policies.

Instead of starting by looking to change behavior, just expose people to some introductory aspect of it, using the Spacing Effect to spread experiences out across time and environment.

Let the new become the familiar for a while before making more advanced requests of people.

Overcome your own Confirmation Bias...

...by exposing yourself to new viewpoints. Though you may not agree with all you hear, you'll develop a skill to see common ground in an increasingly-polarized world.

The persuasiveness of your opinions with others with whom you disagree will  be strengthened by empathically considering their views alongside your own.

88 students were told about an exercise training camp and split into 2 groups: either having a choice about  the four fitness programs on offer or having one randomly assigned. They were then asked to rate their anticipated satisfaction of the program out of 9.

Those given some autonomy reported higher levels of anticipated satisfaction than those who weren’t.

Choice = autonomy = certainty. 

For instance, giving people a choice to still use the old version of your software platform for a given timeframe will reduce anxiety and uncertainty.

Product type matters.

‍People desire autonomy for pleasure purchases (i.e. vacations) more than for practical ones (i.e. business trips).

Place more focus on the former in order to maximise feelings of control and consumer satisfaction (Botti & McGill, 2011).

Change behavior with the ‘4As’.

Feeling that any change originated from within is vital.

‍Ask about the behavior, advise them impartially of the facts and of better routes, but that they must make their own choice.

If keen to change, assist them to make a commitment to do so by a given date, and arrange a follow-up to support this behavior change.

11k people were offered a new job that had a 50% chance of doubling income for life, but it wasn't without risk, with an equal chance of it falling by either 20, 33 or 50%. Questioning started with the 33% gamble; if people took it, they were asked if they’d take the bigger 50% gamble too. But if they didn’t, they were asked about the smaller 20% one.

Results put people into four risk categories showing the majority were not willing to take any risk at all.

Focus on an improvement metric. 

We prefer the certainty of what we’re used to, so the benefits of switching to a new product need to feel substantial.

Outline a goal (relative performance, efficiency etc.) to anchor your product strategy around.

Doing so will reduce uncertainty and boost comparisons against better-known, lower risk alternatives.

Offer a trial or free sample...

...to create familiarity and reduce the risk around a new product.

This sets the cost of new product usage at zero, during which the consumer will adjust their future preferences.

Utilize your brand umbrella.

For any new sub-brands, reduce risk by clearly indicating the relationship to existing, familiar brands you own (Erdem, 1998).  

Product brands take note. Risk aversion is higher for material purchases than for experiential ones such as restaurant meals or holidays (Roche et al., 2015).

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.

City Planners of Garden Grove, California installed Active Radar Speed Signs at 5 locations to provide real-time feedback on the speed of 58,000 drivers. LEDs would also flash if drivers exceeded speed limits by more than 5MPH.

After installation of the feedback systems, average speed dropped 22% from 44 to 34mph.

First, determine the behavior to change. Measure, capture and store the relevant data. 

Communicate it back to the individual in a relevant, context-sensitive way that ultimately provokes an emotional reaction.

Provide clear consequences for action or inaction. It’s critical to get the right balance between not being too subtle and not being too intrusive or authoritarian (which we filter out).

Lastly, allow for opportunities to immediately rectify the behavior - which should also be tracked - completing the loop and eventually changing the behavior pattern.  Remember to reward compliance as much as you penalize inaction to increase effectiveness.

The food choices of 89 people both dieting and not dieting were analyzed in a cafe. Diners were given a menu with either information highlighting low-calorie options or not (the control).

Results showed that dieters primed with the reminder of their future goal consistently made healthier food choices than unprimed dieters.

Who is the target group?

‍They could be people who are motivated to protect the environment, improve productivity at work or improve the quality of their lives. Note: they must have already stated a desire for this goal. Your prime will merely aim to nudge their existing Commitment to meeting their own aspirations.

Where can you trigger these long-term motivations?

As well as environment, timing also matters, so make sure that you do so very close to the actual decision point, i.e. at the start of a meeting, at the ordering counter or on the inside of a restroom door.

Boost with the Spacing Effect.

What's the specific behaviour that you're allowing them to perform to help move them towards their long term goal?

It has to be obvious and easy to do, such as clearly identifying an eco-friendly substitute, bolting on a salad or opting for an equally-priced, dairy-free option.

34 people were split into 3 groups and each told to unscramble a list of either rude, polite or neutral words. After, they were told to see the researcher, who was engaged in a fake discussion with a peer. They were then timed with how long it took before they interrupted.

63% of those primed with rude words interrupted within 10 minutes, compared to only 18% of the polite group.

Prime with words that highlight the positive emotional effect of using your goods or services. For example, Spotify could prime users of its Discover Weekly playlist by using words that highlight its uniqueness or repeat gift-giving benefits.

Combine with images Coca Cola created an advert in Italy called ‘Open the happy can’ that primed potential buyers with a simple smile that was revealed upon opening. This was done in order to create an associative link between happiness and drink consumption, as well as providing a means of positive feedback for the consumer. 

 Keep it subtle. Prime too aggressively and the effect will weaken, or even lead to an unwanted Contrast Effect, where we’ll subconsciously reject and seek out opposites to the prime.

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.

With the rise of wearable devices, personal quantification is easier than ever. It's not a surprise that self-tracking has a large adherence in a competitive, comparative culture where the individual is constantly improving his performance in every possible measure.

But it has a cost.

One of the responsibilities of product creators is to understand and examine the resultant behaviours that modifications to the product design will trigger. By adding certain features or changing their salience, you will inevitably change the behavioural dynamics.

It’s well studied that external rewards undermine intrinsic motivation, but now we know that the act of tracking can also impact it by reminding us of the output, making the activities seem like work. Thus, not everything that can be measured should be measured.

Peter Drucker said “What gets measured gets managed, even when it’s pointless to measure and manage it, and even if it harms the purpose of the organization to do so”.

It’s a warning from the father of management that it’s not often taken to heart, and this study reminds us of it.

With the rise of wearable devices, personal quantification is easier than ever. It's not a surprise that self-tracking has a large adherence in a competitive, comparative culture where the individual is constantly improving his performance in every possible measure.

But it has a cost.

One of the responsibilities of product creators is to understand and examine the resultant behaviours that modifications to the product design will trigger. By adding certain features or changing their salience, you will inevitably change the behavioural dynamics.

It’s well studied that external rewards undermine intrinsic motivation, but now we know that the act of tracking can also impact it by reminding us of the output, making the activities seem like work. Thus, not everything that can be measured should be measured.

Peter Drucker said “What gets measured gets managed, even when it’s pointless to measure and manage it, and even if it harms the purpose of the organization to do so”.

It’s a warning from the father of management that it’s not often taken to heart, and this study reminds us of it.

95 university students spent the day leisurely walking. In the measurement group they were given the choice to wear a pedometer. In the control group, everyone used a sealed shut pedometer. Afterwards, they rated how much they enjoyed walking.

Measuring led participants to walk more but decreased how much they enjoyed it – even for those who chose to be measured.

Consider what you want your users to feel.

While measurement may improve performance, it comes at the expense of enjoyment. By adding a measurement option, the behaviour will feel like work instead of fun.

Understand why users engage in an activity when deciding whether to measure it.

Sometimes the benefit of achieving more may outweigh the cost of users enjoying the experience. Does the end you’re looking to achieve justify the means of measuring its progress?

Switch the motivation type by becoming pro-social and giving meaning to the measurement.

For example: If you reduce your calories, you could send the equivalent of those excess calories to someone in need of food.

Prior data can set reference points that demotivate us

Our personal motivation can suffer in the face of prior data, setting unhelpful reference points about future expected efforts.

For instance, consider the following: "I can see that I ran 10k 3 times in a row, so if I don't run 10k this time, I feel that I'm doing worse. But I just don't feel like I can do 10k today, so I won't go at all."

However, in absolute terms, you're doing more in total by doing any more running at all, whether that's 1k, or even 100m, so you're best off ignoring the data and doing *something*.

A good counterbalance to this is to focus instead on the *experience* that running provides. This removes the quantifiable reference point and frees us to just enjoy the act for what it is. And who knows, maybe we'll end up running longer than 10k in the process!