Fabian Alvares
5 Forms of Scarcity to Skyrocket Your Sales
Scarcity is a glorious form of persuasion and when exploited can yield incredible benefits to your conversion rate. Here’s a Merriam Webster’s definition of scarcity…
“The quality or state of being scarce; especially: want of provisions for the support of life”
That’s extremely useful…but in a nutshell if you reduce the quantity supplied of a product or its availability you create a scarce product. This perceived scarcity then allows you to sell more.
Here are some clever and awesome scarcity techniques to increase sales.
1. The classic limited stock
Displaying low amounts of stock available creates a sense of scarcity. Revealing a number between 1-3 in stock usually converts better. Here’s an example of a hotel booking company that implements this classic style.
“Act Fast! Only 3 rooms left at this price!”
2. Interactive limited stock?
Revealing low stock levels is a simple and great win but the visuals could be much better. If we look at Argos these guys make scarcity much more interactive.
You can check the stock in your area and reserve it. If you enter a postcode and click on the check stock button you’ll receive this pop up.
Notice how it’s in stock on home delivery, out of stock in one area but only 1 left to collect in another branch close to my location. These guys are integrating framing with scarcity in clever way. Also pay attention to the fact that these guys give you the option to check stock in another area on the pop up. When you make scarcity interactive in particular and show something being generated it makes it more trustworthy to your users.
3. Real time scarcity
Booking.com utilise a clever scarcity technique which is to show the number of stock, the number of people viewing the page and when the last purchase was just made.
Notice the 2 messages that pop up at the bottom corner. Combining the stock level with the last purchase and how many people are ogling up my hotel is awesome but the execution could be much better.
Those messages can be argued to look like a windows error message, a site error message or even some type of spyware on a quick glance. When you make scarcity real time it becomes more believable and is much more powerful than some of the classical methods.
4. Auctioning and scarcity
Bidding fee auctions utilise the principle of scarcity whereby a user bids incrementally against other bids and against time. When time runs out the final bidder wins and pays for the product at a fraction of the retail price and the auction company generate a skyrocketed profit margin on the product. A really good online example is Madbid.
Each product has a timer countdown and pits users against each other. The concept of scarcity is used in an extremely powerful state on this site. Imagine this technique being used on retail site for clearance items?
5. Treasure hunts and scarcity
Everyone loves a good old treasure hunt. But how do you relate this to scarcity and sales?
Create competitions that require intelligence or solving a something such as a riddle or mystery. For example solve the riddle to receive the hidden code – which can be used to obtain a unique limited edition item. A recent example of this is Jimmy Choos.
Here’s what they did…
“Shoe lovers in London have been glued to their mobile devices and computer screens in a race to win a pair of free Jimmy Choos.” (Reuters 2012)
Jimmy Choos created an internet style treasure hunt. A picture of the bag is left at a random location on the site with clues provided on social networking sites such as Twitter, Facebook and Foursquare. Once a user has figured out the clue it’s a mad dash to the location to claim their prize.
Awesome right? For those that miss out there’s a real desire to get it the next time. The integration of social, competitions and scarcity are seen in one campaign. The result a 33% uplift in sales! See the case study!
The Hoxton Hotel $1 sale is an awesome case study using similar principles check out Sam Crocker’s post!
Final thoughts
Scarcity is a powerful sales tool and can create a “Black Friday” effect. We implemented a simple scarcity technique for a retail site and got a 30% uplift in conversion rate which is proof it does indeed work but it needs to be executed properly. Its success depends on your audience and how it gets executed. It’s only when you pit people against each other and create competition for a product that you skyrocket your sales.
I’d love to know your thoughts as always drop me a comment below or catch me on twitter.
Image Cred: tinamathis
5 Forms of Scarcity to Skyrocket Your Sales is one of our latest posts from SEOgadget - thanks for reading! Want to stay up to date with the latest SEO and Conversion Rate Optimisation tips and tricks? Follow us on Twitter and Add SEOgadget to your Google Circles!
Has anyone seen this type of search listing before? it’s new to me but isn’t it a cracker!
For a company search, I get a map, it’s precise location, a selection of their products, opening hours and the nearest subway. How cool is this? I can think of loads of benefits from an SEO and CRO perspective.
Click the feedback on the bottom right hand corner and you get reviews for this company as well.
Let me know your thoughts about this…
A New Type of Places Listing? is one of our latest posts from SEOgadget - thanks for reading!Want to stay up to date with the latest SEO and Conversion Rate Optimisation tips and tricks? Follow us on Twitter and Add SEOgadget to your Google Circles!
Did you read that post title correctly? Marmite? Yes that’s right. Conversion rates seriously have a marmite effect about them. You can end up loving or hating conversion rate metrics, and it really depends on how you apply them to a real situation. One of the biggest issues I find with new CRO clients, is that they’re not always applying appropriate metrics to their decisions. In today’s post, I’ll be discussing how conversion rates can be an absolutely horrible metric leading to sub optimal decisions, and how to turn that situation around to make the right calls.
Used inappropriately, “conversion rate” can be a horrible metric.
Conversion rates can be really misleading when used in isolation, aggregation or without a proper understanding of their context and ecosystem. It’s all about actionable outcomes, and a “conversion rate” alone doesn’t always tell us a great deal. So, what do we mean by “ecosystem”, “isolation”, “aggregation” and “understanding”?
1. Isolation
Using conversion rates in isolation is useless, it won’t tell you anything meaningful apart from the fact your conversion rate is at X% a certain point in time. Having a metric such as revenue next to it is much more insightful. Think of it this way, if ‘A’ has a high conversion rate of 10% and ‘B’ has a slightly lower conversion rate at 9%. Would we do more of ‘A’? The short answer is no, we haven’t taken into account any other vairables, such as cost. For example ‘A’ could be relying on costly promotions and offers which cannot be maintained in the long run.
2. Aggregation
Using conversion rates in aggregate is useless. “Overall” conversion is not an insightful or meaningful metric. If you segment by different sources for example SEO, PPC, mobile etc. each source will have a different conversion rate. So failing to appreciate this and relying on aggregate conversion rates leads to sub optimal decisions. Using an aggregate / site conversion rate to tell you what’s wrong with your site is like waiting for your cat to bark.
3. Understanding – higher conversion rate does not always mean higher performance.
Let’s imagine that our boss asks us for a progress report on two marketing campaigns we deployed at the same time period. We deployed strategy ‘A’ and strategy ‘B’ which delivered different conversion rates.
Strategy A = 10% conversion rate
Strategy B = 25% conversion rate
When strategy ‘A’ was deployed we achieved a 10% conversion rate and when strategy ‘B’ was deployed we achieved a 25% conversion rate. If conversion rates were the ultimate metric then basic common sense would dictate strategy ‘B’ is better since it has a higher conversion rate. Should we go with strategy ‘B’? No, take a look at this example why…
Strategy A: 5000 unique visitors and 500 conversions = 10% conversion rate
Strategy B: 1000 unique visitors and 250 conversions = 25% conversion rate
On analysis of the conversion rate formula, strategy ‘A’ has double the conversions and is better for the company and had we gone with strategy ‘B’ we might be making a massive mistake. Therefore a higher conversion rate does not necessarily mean higher performance. This is a simple example, but it really does happen!
4. Ecosystem
Conversion rates can be unreliable if the traffic to your site changes, because of seasonality, content popularity or a news event. Let’s go with the example that your content goes hot – you’ve written a series of blog posts that are absolutely awesome and reveal the secret ingredient behind the colonel’s KFC chicken, secrets behind David Blaine’s Magic tricks and the true meaning of life.
Your blog posts reel in the visitors by the thousands. That’s great! You’re more famous, your content is obviously more engaging, but your conversion rate will go down assuming the number of goals remains constant. To improve your conversion rate you would have acquire more leads but in actual fact those visitors may have only come to read your blog and may not want the product you offer right now.
Used correctly, the true value of conversion rates are exposed.
A conversion rate’s true value is exposed when we utilise it with other metrics and segment it by different sources, visitor type etc. By doing this we get a more meaningful metric that leads to an actionable outcome.
1. Indicator of performance
Conversion rates provide an indication of how well you are capturing your visitors. It is important to know how many people are converting. Most websites conversion goals tend to be sign ups, sales, downloads etc. By tracking these we can monitor the ratio of people that did convert as opposed to those that didn’t.
It can provide you with areas of concern i.e. it can tell you where your marketing efforts are most successful when segmented. If you measure it along with other business metrics such as revenue, profit per visitor, cost per conversion etc. you gain deeper insights.
2. Spur action
To some extent, low conversion rates can even spur action by senior execs. For example it can lead to improvements to the persuasive architecture of the site. The content on the site is improved which is then tested in a split test. Conversion rates can therefore spur change for the better.
3. Utilising other metrics
Conversion rates do have to be segmented in order to expose its true value. Metrics such as abandonment rates and completion rates are much more insightful in determining areas for improvement.
Let’s look at this example…
Imagine we run a pet nutrition company and we advise people on how our products improve their pet’s nutritional intake. We’re really interested in the number of sign-ups to our site. Task completion shows you why people came to the site and how easy it was for them to complete a task but also what was achievable in terms of conversion rate.
The chart shows that 35% of people sign up to our service. So if our conversion rate is at 1% then what happened to the other 99%? Is that 99% lost sign up conversions? No, in fact it’s 1% out of 100% out of the 35%. The 35% shows you what’s achievable in terms of sign up conversions.
We also have to ask ourselves, out of all these other segments what’s more likely to convert into sign ups? So for example, of those people that come to do research, can we entice them to sign up to our services? This type of analysis is fundamental to the success of improving site conversion and understanding what’s achievable, as people applying for a job on the site might not want to sign up to your service and you may be wasting your efforts.
Think “how should I be using conversion rate effectively?”
Conversion rates are an excellent metric when used properly. Using it in isolation and in aggregation can lead to sub optimal decisions. Combining conversion rates with metrics such as revenue, completion rates, outcomes and unique visits reveal a deeper pool of insight which, in the long run can be more beneficial when you’re planning to truly make a difference to your bottom line.
Image credits:
pinkangelbabe
Conversion Rates and the Marmite Effect is one of our latest posts from: SEOgadget.co.uk.