Doctor SpinThe PR BlogSocial PsychologyThe Power of Artificial Scarcity

The Power of Artificial Scarcity

Artificial scarcity is fair gameโ€”just don't lie.

Cover photo: @jerrysilfwer

Creating artiยญfiยญcial scarcity worksโ€‰โ€”โ€‰but is it ethical?

In my line of work as a spin docยญtor, I someยญtimes creยญate artiยญfiยญcial scarcity to fulยญfil my PR objectยญives. Iโ€™m not aloneโ€‰โ€”โ€‰many comยญmuยญnicยญatยญors and marยญketers do the same thing.

In this blog artยญicle, I will disยญcuss why creยญatยญing scarcity works, why we use it, and whethยญer or not it is ethical.

Here we go:

The Principle of Scarcity

The prinยญciple of scarcity is well-estabยญlished in sciยญentifยญic litยญerยญatยญure. If someยญthing seems scarce, we antiยญcipยญate our posยญsible regret of failยญing to acquire the resource in time:

โ€œIn 2 experยญiยญments, a total of 200 female underยญgraduยญates rated the value and attractยญiveยญness of cookยญies that were either in abundยญant supยญply or scarce supยญply. [โ€ฆ] Results indicยญate that (a) cookยญies in scarce supยญply were rated as more desirยญable than cookยญies in abundยญant supยญply; (b) cookยญies were rated as more valuยญable when their supยญply changed from abundยญant to scarce than when they were conยญstantly scarce; and ยฉ cookยญies scarce because of high demand were rated highยญer than cookยญies that were scarce because of an acciยญdent.โ€œ
Source: Journal of Personality and Social Psychology 1Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supยญply and demand on ratยญings of object value. Journal of Personality and Social Psychology, 32(5), 906โ€‰โ€“โ€‰914.

We are proยญgrammed for surยญvivยญal and will, thereยญfore, a) overยญvalue items and serยญvices that are scarce and b) underยญvalue those plenยญtiยญfully. 2Silfwer, J. (2016, August 4). FOMO & Digital Trends: You Donโ€™t Have To Catch Them All. Doctor Spin | The PR Blog. https://โ€‹docโ€‹torโ€‹spinโ€‹.net/โ€‹fโ€‹oโ€‹mo/

Creating artiยญfiยญcial scarcity (by limยญitยญing availยญabยญilยญity) is a powerยญful PR strategy, but to avoid backยญfirยญing, the PR proยญfesยญsionยญal must refrain from framยญing the offer using untrue statements.

Learn more: The Power of Artificial Scarcity

Artificial Scarcity

Artificial scarcity: โ€œOnly 5 spots left for this exclusยญive leadยญerยญship trainยญingโ€‰โ€”โ€‰sign up now or miss out on this once-in-a-lifeยญtime opportunity!โ€

Artificial scarcity occurs when a comยญpany or indiยญviduยญal creยญates the illuยญsion of a limยญited supยญply or urgency to manipยญuยญlate conยญsumer behaยญviour, even when the scarcity is not genuยญinely based on the availยญabยญilยญity of resources. This tacยญtic often encourยญages rushed decisions and creยญates a sense of urgency that may not be justified.

In a busiยญness conยญtext, artiยญfiยญcial scarcity can presยญsure cusยญtomยญers into makยญing hasty decisions, leadยญing to overยญconยญsumpยญtion, regret, or loss of trust. While it may drive short-term sales or engageยญment, it can also underยญmine long-term brand loyยญalty if conยญsumers feel manipยญuยญlated or deceived by the false urgency.

To avoid fallยญing into the trap of artiยญfiยญcial scarcity, busiยญnesses should focus on buildยญing trust and providยญing genuยญine value rather than relyยญing on psyยญchoยญloยญgicยญal manipยญuยญlaยญtion to drive sales. 

Transparency, clear comยญmuยญnicยญaยญtion about product availยญabยญilยญity, and creยญatยญing meanยญingยญful exclusยญivยญity or limยญited-time offers can help busiยญnesses mainยญtain ethยญicยญal marยญketยญing pracยญtices while still susยญtainยญably genยญerยญatยญing exciteยญment and demand.

When scarcity is crafยญted, desire grows not from need but from the illuยญsion that what is limยญited is someยญhow more valuable.

Learn more: The Power of Artificial Scarcity

Artificial Scarcity and Public Relations

People tend to act more quickly when they believe that the thing they want is about to disยญapยญpear. The fear of not havยญing someยญthing can drive people to take action when they wouldยญnโ€™t have othยญerยญwise acted.

Our brain releases dopamยญine in response to a potenยญtial reward, which causes our behaยญviour to be rewarยญded by the proยญspect of a new thing. Itโ€™s FOMO (fear of missยญing out).

PR proยญfesยญsionยญals often base their PR strategies on creยญatยญing artiยญfiยญcial scarcity. We know that the more scarce someยญthing is, the more people want it.

In a world where everything has become readยญily availยญable, it isnโ€™t hard to underยญstand why many PR proยญfesยญsionยญals, comยญmuยญnicยญatยญors, and marยญketers use artiยญfiยญcial scarcity as one of their favourยญite tricks. We apply artiยญfiยญcial scarcity in many ways, such as limยญitยญing quantยญitยญies, expiry offers, exclusยญive storยญies, and rare occurrences.

I once creยญated an invite-only waitยญing list for a new streamยญing serยญvice. Your place on the waitยญing list was parยญtially determยญined by your numยญber of social folยญlowยญers and the numยญber of folยญlowยญers of the perยญson who invited you. The scarcity of availยญable seats sparked intense anticipation.

The Ethics of Artificial Scarcity

The Principle of Scarcity is an effectยญive motivยญatยญor because it appeals to peopleโ€™s instinct to acquire what they perยญceive as limยญited. People have an innate desire for things or activยญitยญies that are scarce.

Creating artiยญfiยญcial scarcity can be an effectยญive motivยญatยญor if approยญpriยญately utilยญised. Is it ethยญicยญal? I wish I could deny the inherยญent cynยญicism that seems to accomยญpany our scarcity bias.

My approach is to use artiยญfiยญcial scarcity sparingly.

Example: I could use a countยญdown timer to get more users to sign up for a speยญcifยญic deal. But I would only use the timer if I were conยญfidยญent that the offer wouldยญnโ€™t remain or resurยญface soon after the countยญdown runs out.

Another way of putยญting it:
Creating artiยญfiยญcial scarcity is okay. But lying nevยญer is.


Jerry Silfwer - Doctor Spin - Spin Factory - Public Relations

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Annotations
Annotations
1 Worchel, S., Lee, J., & Adewole, A. (1975). Effects of supยญply and demand on ratยญings of object value. Journal of Personality and Social Psychology, 32(5), 906โ€‰โ€“โ€‰914.
2 Silfwer, J. (2016, August 4). FOMO & Digital Trends: You Donโ€™t Have To Catch Them All. Doctor Spin | The PR Blog. https://โ€‹docโ€‹torโ€‹spinโ€‹.net/โ€‹fโ€‹oโ€‹mo/
Jerry Silfwer
Jerry Silfwerhttps://doctorspin.net/
Jerry Silfwer, alias Doctor Spin, is an awarded senior adviser specialising in public relations and digital strategy. Currently CEO at Spin Factory and KIX Communication Index. Before that, he worked at Whispr Group NYC, Springtime PR, and Spotlight PR. Based in Stockholm, Sweden.

The Cover Photo

The cover photo isn't related to public relations obviously; it's just a photo of mine. Think of it as a 'decorative diversion', a subtle reminder that it's good to have hobbies outside work.

The cover photo has

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