What is scarcity and why is it important if you sell anything?

Scarcity is the psychological bias that makes us place a higher value on things that are scarce than those in abundance. Basically, we tend to like things that are harder to obtain.

You are probably all too familiar with the concept by now. It’s become a norm:

We have come to a point in which people are so used to seeing and expecting some form of scarcity when browsing online, that implementing one inside your product is not a competitive advantage anymore but a starting point for any goal that aims to satisfy users’ needs.

Scarcity combines multiple biases

It’s so effective is because it combines multiple biases into one:

1. Loss aversion

If we don’t act upon a scarce product, it basically means we’ll lose both the product itself in the short run but also our freedom to choose it in the long run.

2. Social proof

Usually, products become scarce when the demand is high. Once that happens, it implies that other people bought it in the past so it must be valuable and we should seize the opportunity.

3. Anticipated regret

When facing a decision, we anticipate not only the events but also the associated regret we might experience. Deciding to act now is our attempt to try and eliminate that possibility.

Different types of scarcity

There are three main forms of scarcity:

1. Time-limited scarcity

2. Quantity-limited scarcity

Quantity-limited scarcity is considered more effective than time-limited scarcity because the end of the supply is unpredictable, depending exclusively on demand rather than time.

3. Access-limited scarcity

Research showed that censorship made people place a higher value on the restricted features than those that were not because exclusivity made them feel special.

Dos and don’ts

Do

• use scarcity to increase perceived value and expedite conversions
• use time scarcity to promote products that are time sensitive
• use quantity scarcity to make people aware of stock shortages
• use access scarcity to highlight the advantages of the restricted features
• use A/B testing to test what scarcity message works best for your audience
• use usability testing to test the impact of messages on credibility and trust
• use animated elements to emphasize urgency (e.g., showing a glowing red icon to highlight the real-time status)

Don’t

• do not use scarcity without testing it first with users
• do not use scarcity if stocks are not reliable
• do not use scarcity if the messages are not bug-free
• do not use fake numbers to create artificially scarce products

Conclusion

Scarcity is powerful because it combines multiple biases (Loss aversion, Social proof, and Anticipated regret) and it comes in different forms (Time, Quantity and Access).

It can be controversial, annoying, and even deceiving, but it shouldn’t be. Just follow the tips and find the right balance.

Every time I’ve used scarcity to improve conversions, it always worked. It was only a matter of finding the “just right” amount of it. Too little – and you’re not persuasive enough. Too much – and you annoy people instead of helping them.

Scarcity in UX: The psychological bias that became the norm

PS. Happy pi day!