Let’s face it we are all suckers for a special offer. As much as we might not want to admit it.
This is great, because it makes scarcity selling a thing, and is widely used in marketing tactics to push people through the consumer decision making process faster and get to that point of conversion. Read on to see my 4 tried and tested options on using limited availability to increase conversion, especially for hotels and venues.
Communicating demand and popularity effectively can really boost the sales pipeline in the long term and low periods in the short term.
The FOMO phenomenon was named by Dr. Dan Herman in 1996, and put simply, people hate missing out, which is why using FOMO can be so effective.
The commodity theory proposes that scarcity increases the value (or at least the desirability) of an item or experience
Dr. Michael Lynn, a professor at Cornell, compiled a list of explanations psychologists and researchers have found over the years that examine why scarcity increases desirability:
- Scarce items feel exclusive
- Scarce items appear more valuable
- Scarce items make people feel powerful
The bottom line: The more scarce an item, the more people want it.
Here are my top tried and tested ideas on offers:
- One of the best ways to leverage scarcity is through limited time offers. These can be used in low demand months when a sales boost is really needed. Use sale price countdowns, so the pricing gets more expensive as the availability decreases. Communicate this popularity, for example – on certain dates how many are left.
- Planning an event? Countdown to the event and use limited tickets/registrations to indicate popularity. Or special giveaways for the first 20 people that sign up.
- Offers, such as value add complimentary items, or a % off the package price, with deadlines on booking by. The limited time offer not only encourages a “buy now” mindset, but it again taps into the loss aversion tactic (see image below) that reminds customers to act now rather than later.
- Get repeat business secured as early as you can either by honouring the same price or providing a value add. This works really well for helping to secure base business on a long lead time, especially for retaining accounts and honouring regular customers.
As with most things it is important to remember everything in moderation. When implementing these sales tactics, TOO MUCH PRESSURE IS A BAD THING. The customer still needs to feel in control of the decision.
If offers are being mentioned in a sales conversation, how they are presented is key to the success, the customer needs to feel that it is a genuine, and it must be communicated effectively for it to be effective.
Offers should be used strategically throughout the year. They must be perceived as special. Putting too many offers out there will make customers think they can just wait for another one and detract from all the theory that has just been explained, de-valuing your service and making it seem like it is not in demand.
So, if you haven’t tried it yet, go for it! You don’t know unless you try.
Scarce items make people feel unique, powerful, and like they have access to something valuable and exclusive.
Interested to learn how I can support your business growth?
