7 Tips for Implementing Scarcity in Email Marketing

One of the best ways to improve your email marketing is to use the element of scarcity. Scarcity marketing is the idea that you create increased demand by suggesting the rarity of your product demands their immediate purchase.

We have all seen the element of Scarcity in Marketing. From stores such as Amazon…

scarcity in email marketing example of TurboMan
“Jingle All the Way” TurboMan on sale on Amazon.

In the Christmas Movie Classic “Jingle All the Way,” the plot highlights the crazy lengths people will go (and exorbitant amount of money one will spend) to get a nearly sold out action figure TurboMan

But practically, how is it used? By wording, coloring (ex: “Only 1 left in stock.“), and frequency (how often you make the claim), one can take an everyday item and make it the hottest item on the market.  By limiting the supply, the price demanded can be higher. Or by limiting the availability of an offer (ex: “24 hours only!”) you can increase the quantity of sales.

In economics, you will often see a Supply vs. Demand chart, much like this:

economics5 - via Investopedia.com. illustrating scarcity and email marketing
Original Image found here

If the supply lessens — so the Supply (S) line moves left — then the price one can demand increases (Equilibrium = ideal for price and quantity). Therefore, if you market items wisely, you can keep your supply short on a highly demanded service or product and demand a higher price point.

This approach is often seen around the holidays, from Black Friday deals to Limited Quantities of Special Editions. The question is, how do you leverage Scarcity in Email Marketing? Depending on your product or service, you may implement the scarcity policy to new customers, old customers, or both. In part you must ask yourself, “Is my product / service one which can effectively use the scarcity model to new customers?” One of the main reasons this strategy works is that there is limited to no competition — either in price point (ex: Wal-Mart) OR in another crucial area such as Customer Service (Apple).

However, if you are in a competitive market (gasoline, batteries, etc.) and you attempt to market with “scarcity”, then your customers will just go straight to your competitor and you’ve lost a sale. Obviously, that is a failed marketing strategy. On the other hand, if you are the dominant player in a market, you have more “market power” and can demand greater attention from potential customers (ex. Sony, Starbucks, etc.) In these scenarios, you can push “Limited Quantities” or “Buy by midnight tonight for 3 years of comprehensive maintenance for free!”

Now that you have a greater understanding of Scarcity, here are 7 tips for implementing scarcity in email marketing.

1. Have a Fair Assessment of Your Product Compared to the Market

The reason why this is so important is that if you are arrogant about your position, this scarcity tactic can backfire and lose you sales. Think about it, if you sell DVDs and you claim “Limited quantities of ‘Guardians of the Galaxy‘” at the same price point as Wal-Mart, guess who just lost a sale to Wal-Mart? Yep. It was you. Who are your competitors? What sets your product or service apart from others? With this information, you can move to Tip 2.

2. Determine the Audience to Whom You Want to Market

Depending on your assessment above, consider if you are best to market to new customers because you have larger market power or to your old customers because you already have product loyalty. If you do not have much competition or if you have clearly perceived better service, then your email marketing should be directed to new leads where you entice them to purchase today.

We are having a 24 hour sale where we are giving new customers 40% off our packages! We know you’ve considered using our product before, and we make to make sure we give you our best! Join today before this offer expires!

On the other hand, if you are composing a marketing email to previous customers then your phrasing may be different.

Hey Frank, we have missed working with you. Therefore we have put a proposal together and are willing to offer you our VIP services at a fixed rate for 3 years, but you have to let us know by the end of this week. Click Here to contact one of our representatives who will show you how your investment in our service is really an investment in building your business.

Of course, if your competition is limited, then you can also increase the price (although don’t advertise that you raised the price!) and produce less quantities. People will buy your product. Why? Because it is a desirable product (Keep in mind, this is the public’s perception. You may think your product is the next best thing, but until the public has caught on to that idea, it’s not.)

While this is a more extreme example, consider the Limited Edition Lamborghini Aventador LP 720-4 50th Anniversario.

Limited Edition Lamborghini Aventador LP 720-4 50th Anniversario. Example of scarcity and email marketing
Limited Edition Lamborghini. Screenshot taken from here

With only 200 units available, they can get away with not even putting a price tag on the website for the Lamborghini. Why? If you have to ask, you cannot afford it. But trust me, Lamborghini is making a profit on that car.

3. Keep Your Word

If the sale is only for 24 hours, don’t extend it. Especially more than once! Why? You lose credibility if you ever try it again. People are smart and have learned your tactics. “Fool me once, shame on you. Fool me twice, shame on me.” Diamonds are highly valued not because they are rare in nature, but because their supply is kept low (rare in the market). Want to keep the highest value when using the scarcity tactic in email marketing? Don’t lie! Don’t say “24 hour sale!” for 7 days in a row.

4. Have More Plays in Your Playbook

Related to Tip 3, do not overuse the “Scarcity” tool. It is highly effective when used rightly, but completely ignored if used wrongly. If a person receives an email every day for 2 weeks about your “24 hour sale! Buy by midnight tonight!”, they know your strategy and the urgency to buy is gone. Therefore, think of new ways to market so that when you use the scarcity tactic, your potential customers know they must act on your deal immediately!

5. Create Visual Cues

Amazon does this well, as you can see in the TurboMan image at the top of this post. Whenever an image is low in stock, Amazon automatically adds red text with how the quantities remaining (ex: “Only 1 left in stock.“). Why is this helpful? If you are not using red text everywhere else, it draws the attention of the user.

Red text also has traditionally be used to cause attention of its users. From red stop signs in the US, to the red stoplight, to red fire extinguishers and fire alarms, to red lipstick — red draws attention. Therefore, red is a good color to use when highlighting the scarcity of quantities or limited-time offers (i.e.: scarcity of time). Make sure your visual cue that highlights your scarcity is evident but not overly obnoxious.

6. Have 1 Goal in Mind Per Email

We’ve talked about this before in our previous blog post “8 Things That Can Ruin an Email Newsletter“, but it must be reiterated here. Have one scarcity goal in mind. If you send an email to your customers with 18 items of “1 left in stock”, you are in effect showing your metaphorical poker-hand. Now it may be true that you only have 1 item left of each of those items. However, when you show 18 items with “1 left in stock” on each item, it may make the customer doubt your business’ inventory model. “Does this store really know how to run a business? Can I depend on them still being in existence if I have problems?” Why? Because they obviously forgot to restock — a good way to lose money is to lose a customer’s trust.

However, a smart business that has segmented their email list knows how to promote focused marketing. Therefore, you could promote something like a one-day promotion encouraging your European customers to sign up for a limited offer.

7. Repeat Email Campaigns Wisely

You can send “Two hours left! This is your last chance”, but don’t send an email every hour on the hour. If it is a 24-hour only promotion, perhaps use the a schedule of 8AM, 12PM, 4PM, and 9PM. However, if it is a 7-day sale, you probably do not want to send 4 emails every day for 7 days. Why? After 2 days you can risk having your emails become “noise” in a customer’s inbox and they may just delete your emails. Be wise, but don’t be overeager. Research the open-rates of your current subscribers. Have you tested your email campaigns before? Perhaps split-test your email campaigns as well and see which delivery schedule works the best.

Scarcity and Email Marketing can be a very effective marketing tactic as long as you are humble and wise about how you implement it. The better and more trustworthy of a reputation you have, the better chances of success. With a high trust rate, you can use the tactic with potential customers on your email list. If you are not standing out above your competitors, then focus first on your current and previous customers. Any other thoughts? Leave a comment below!

If you enjoyed this article, you may also want to check out our Definitive Guide to Email Marketing.