Not so scarce after all

RECIPROCITY is only one of the many ways that we, as consumers, are being influenced to buy, buy, buy. 

Another way to influence our purchasing behaviour is the use of scarcity. Or more precise: “perceived scarcity”. A product that is always available everywhere does not entice consumers. 

They can take their time to carefully think about whether they want or need the product, delay the decision endlessly and really figure out how much the product is worth to them.

What happens if the product is scarce? What if it is available for purchase in a limited place, time or number? 

Once this happens, people – by their very nature – become anxious. What if they miss out? Will they regret it? The fact of the matter is that we value things more when they become less available to us. 

When things are harder to get, we assume they are better than those things that are easy to come by. 

The anxiousness consumes our mind and suddenly, we have less mental bandwidth left to make a rational decision. 

We feel the pressure and experience stress: we need a decision and we need it now! No time for careful considerations, time is of the essence.

Marketing people know this and they have come up with multiple ways to create the perception of scarcity, even when there is none whatsoever. 

Many times, it is very subtle and takes place at a near unconscious level, in their choice of words, for example but their impact on your buying behaviour is certainly there.

Consider the following:

* By invitation only (clubs, credit cards, top tier of hotel loyalty programs);

* Time limited offer (TV sales channels, flash deal sites, auction sites, group buying sites);

* Hurry, while stocks last (Hotel booking websites); and 

* Reserve or pre-order to guarantee your spot (concerts, crowdfunding sites)

Each one gives the impression that if you are not quick, you will miss out on a great opportunity. 

How to prevent being tricked by fake scarcity? Here are some insights:

1. Realise that most of the products or offers are not really scarce. There will be a new promotion or a very close substitute next week or next month; 

2. Ask yourself whether you would buy the product if it was always available? No? Then it is probably better to give it a pass;

3. Take (mental, physical) distance from the promotion. Delay your decision and give yourself some time to carefully consider the costs and benefits before making your decision.

Mark Reijman is co-founder and managing director of http://www.comparehero.my/, dedicated to increasing financial literacy and to help you save time and money by comparing all credit cards, loans and broadband plans in Malaysia.