The Power of Artificial Scarcity

Creating arti­fi­cial scarcity works — but is it ethical?

In my line of work as a spin doc­tor, I some­times cre­ate arti­fi­cial scarcity to ful­fil my PR object­ives. And I’m not alone — many com­mu­nic­at­ors and mar­keters do the same thing.

In this blog art­icle, I will dis­cuss why cre­at­ing scarcity works, why we use it, and wheth­er or not it is ethical.

Here we go:

Three Uncomfortable Anecdotes

Here are three short anec­dotes that I’ve been pon­der­ing lately:

I know a CEO who moved a grow­ing com­pany to an ample new office space. The idea was to grow into it, but effi­ciency quickly took a nose­dive. Was it wrong to move into a spa­cious new office? The CEO divided the room and crammed all employ­ees into less than half the avail­able space. Once more, people had to get in early to get a chair and a desk. And soon after that, effi­ciency soared back up again.

When I run monthly edit­or­i­al meet­ings for cli­ents, I bring an engraved trophy to the meet­ing. I give it to the per­son whose edit­or­i­al con­tri­bu­tions brought the most value to the brand (traffic, leads, shares etc.). We typ­ic­ally poke fun at the whole trophy thing, but it usu­ally does­n’t take long before even a room full of hard-to-impress engin­eers turns into highly engaged con­tent creators.

I remem­ber play­ing ten­nis with my dad as a kid. There was no book­ing sys­tem for the court we used to play at, so we always hoped it would be avail­able. We could some­times see a pair of play­ers fin­ish­ing up at a dis­tance. However, as soon as the play­ers were made aware that their court was “in demand”, they would stop pack­ing up and keep play­ing for an addi­tion­al 20 – 30 minutes. ¹My dad and I called this the “ten­nis effect” because it occurred so often. It also taught us how to approach a ten­nis court without seem­ing as we were — quite a rare skill, I’d ima­gine.

What’s going on here?

The Principle of Scarcity

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The Principle of Scarcity

The prin­ciple of scarcity is well-estab­lished in sci­entif­ic lit­er­at­ure. If some­thing seems scarce, we anti­cip­ate our pos­sible regret of fail­ing to acquire the resource in time:

“In 2 exper­i­ments, a total of 200 female under­gradu­ates rated the value and attract­ive­ness of cook­ies that were either in abund­ant sup­ply or scarce sup­ply. […] Results indic­ate that (a) cook­ies in scarce sup­ply were rated as more desir­able than cook­ies in abund­ant sup­ply; (b) cook­ies were rated as more valu­able when their sup­ply changed from abund­ant to scarce than when they were con­stantly scarce; and © cook­ies scarce because of high demand were rated high­er than cook­ies that were scarce because of an acci­dent.“
Source: Journal of Personality and Social Psychology ²Worchel, S., Lee, J., & Adewole, A. (1975). Effects of sup­ply and demand on rat­ings of object value. Journal of Personality and Social Psychology, 32(5), 906 – 914.

We are pro­grammed for sur­viv­al and will, there­fore, a) over­value items and ser­vices that are scarce and b) under­value those plen­ti­fully. ³The beha­viour is some­times called FOMO (fear of miss­ing out).

Creating arti­fi­cial scarcity (by lim­it­ing avail­ab­il­ity) is a power­ful PR strategy, but to avoid back­fir­ing, the PR pro­fes­sion­al must refrain from fram­ing the offer using untrue statements.

Learn more: The Power of Artificial Scarcity

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Leveraging Artificial Scarcity in PR

People tend to act more quickly when they believe that the thing they want is about to dis­ap­pear. The fear of not hav­ing some­thing can drive people to take action when they would­n’t have oth­er­wise acted.

Our brain releases dopam­ine in response to a poten­tial reward, which causes our beha­viour to be rewar­ded by the pro­spect of a new thing. It’s FOMO (fear of miss­ing out).

PR pro­fes­sion­als often base their PR strategies on the cre­ation of arti­fi­cial scarcity. We know that the more scarce some­thing is, the more people want it.

In a world where everything has become so read­ily avail­able, it isn’t hard to under­stand why many PR pro­fes­sion­als, com­mu­nic­at­ors, and mar­keters use arti­fi­cial scarcity as one of their favour­ite tricks. We apply arti­fi­cial scarcity in many ways, such as lim­it­ing quant­it­ies, expiry offers, exclus­ive stor­ies, rare occur­rences, etc.

I once cre­ated an invite-only wait­ing list for a new stream­ing ser­vice. Your place on the wait­ing list was par­tially determ­ined by your num­ber of social fol­low­ers and the num­ber of fol­low­ers of the per­son who invited you. The scarcity of avail­able seats sparked intense anticipation.

The Ethics of Manufacturing Scarcity

The Principle of Scarcity is an effect­ive motiv­at­or because it appeals to people’s instinct to acquire what they per­ceive as lim­ited. People have an innate desire for things or activ­it­ies that are scarce.

Creating arti­fi­cial scarcity can be an effect­ive motiv­at­or if appro­pri­ately util­ised. Is it eth­ic­al? I wish I could deny the inher­ent cyn­icism that seems to go hand in hand with our scarcity bias.

My approach is to use arti­fi­cial scarcity sparingly.

Example: I could use a count­down timer to get more users to sign up for a spe­cif­ic deal. But I would only use the timer if I were con­fid­ent that the offer would­n’t remain or resur­face soon after the count­down runs out.

Another way of put­ting it:
Creating arti­fi­cial scarcity is okay. But lying nev­er is.

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• Priming in PR: The Subtle Art of Pre-Suasion
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• The Priming Wheel: 12 Steps to Yes
• Pre-Suasion: Robert Cialdini on Priming (to be published)
• The Value Triangle: How To Manage Client Expectations
• The Power of Artificial Scarcity

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— Nikos Kazantzakis

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