Creating demand through scarcity, or a limited edition is a popular tactic. There are limited run cereals, candy bars, even limited time offer restaurants (they set up for a few months, then shut down).
In fact, there’s a restauranteur in New York who seems to specialize in this.
He opens a restaurant, for several months or a year, then shuts it down and starts over.
It’s completely different behavior from most restauranteurs, who strive (often without success) to keep a restaurant in business for as long as possible.
Why create a limited edition?
Being available for a limited time, or only open certain days of the week adds to the cachet. Only a few people will be able to get in to that restaurant, and only a few people will be able to enjoy the food. There are even restaurants in New York that have no names. You have to know they are there, which adds to their desirability and appeal (humans are silly).
Scarcity creates urgency
Urgency leads more people to sign up, buy, or act. Not sure this works? If you’re in the United States, think what happens on Black Friday (the day after Thanksgiving). Stores, anxious to get shoppers in for the holidays, offer all sorts of crazy deals, often in limited quantities — like 50 inch plasma TVs for $300. But, there’s a catch. There are only 10 TVs at that price and you have to be in the store at 3 AM to get one.
Limits make it special, and increase demand
The photo in this post is a special edition Volkswagen GTI. It came in bright orange, cost $28,000 (back in 2007) and there were only 1200 of them. If you had one, people would notice it (heck, they’d need sunglasses to watch you go by). Anyone seeing that car in that color would notice it, and notice the owner too. Even if they didn’t know it was a limited edition, they’d realize there weren’t lots of cars in that color.
For anyone who enjoys exclusivity, the offer is irresistible.
Share your thoughts
Do you think setting limits on offers is important? Have you used this technique? What happened?
P.S. By the way, speaking of special offers, my invisible friend Bon is giving away a free Tassimo Brew Bot on her blog. Leave a comment on her blog, facebook wall, or tweet it. More details here.
I agree that scarcity creates urgency, but do people really believe it. How can they trust that there really is a scarcity and not just a another marketing ploy?
It can be artificial. VW could have made more cars (if they wanted to). They could do some other “limited” edition tomorrow – maybe purple or bright green this time.
It can also be something truly unique, like the linchpin session poster from Seth Godin’s presentation earlier this year. It’s printed on a letterpress (rather than the usual offset), and he only made enough for that one day. Sure, he could print more, but if you weren’t there it wouldn’t mean much.
It totally works on me, that’s for sure. But I’m my own worst salesman… or something like that. I can talk myself into anything, even if the salesman is saying I don’t need it.
Drives Husband crazy!
Repeat after me, “No.” “No.”
Or actually, read Chris Garrett’s post: :Saying No