Marketing Psychology: Scarcity and Anchoring
Episode Overview
Ever wonder why you feel compelled to buy something when it's "limited time only" or marked down from a higher price? In this episode, Branda breaks down two powerful marketing psychology principles that influence consumer behavior every day. She dives deep into how scarcity and price anchoring work, shares practical examples from both online and traditional businesses and provides ethical guidelines to implement these strategies without being manipulative. Whether you're a business owner or a curious consumer, you'll gain valuable insights into these subtle yet effective marketing techniques.
Tune in as Branda discusses:
How scarcity in marketing drives faster purchasing decisions and perceived value.
Ways to implement price anchoring to showcase value and pricing strategy.
Important ethical considerations when using these marketing psychology principles.
Marketing isn’t about tricks. It’s about strategies. In this episode, I’m diving into two strategies that can have a positive impact on your sales. Let’s talk about two principles of marketing psychology: scarcity in marketing and price anchoring.
Scarcity in Marketing
There’s a good chance you’ve heard of scarcity in marketing before. The idea is that when there is a limited number of something or a limited time frame for something, people will make a decision faster. People might also see that thing as more valuable because they have a limited window of opportunity.
Things to consider before you use this scarcity in marketing. You don’t want to create fear or judgment around scarcity. For example, let’s say you have a membership for those struggling with anxiety. You wouldn't want to promote scarcity by saying this is their last chance to turn that anxious energy into something greater. Or tell them that if they aren’t ready to take the leap - they’ll be stuck living with those feelings forever. It’s easy to slip from scarcity into feelings of guilt or shame. But you can create scarcity without making them feel bad.
For example, I could say, “I know how much anxiety is controlling your life. I hope you join me before midnight, so we can step into something new and leave anxiety behind for good…I’ll be right alongside you for the next six weeks, helping you take the leap.” This is much more positive. I’m not putting them down. Just showing them something better and getting them excited about that opportunity.
Examples of Scarcity in Marketing
Scarcity in marketing can be a really great tool when you’re launching, or you want a encourage people to buy now. For example, you have a cart that closes in a few days. Or you’re capping the number of people in your membership. Or you’re only giving the freebie to the first 10 people or in the next 24 hours.
You see scarcity in marketing outside the small business space as well. When you’re shopping online, you’ll see notifications that say “This item is hot!” or “This is in 50 people’s carts” or “Only 10 left”. They want you to make a decision and fast.
Brands will also release things in limited quantity or for a particular season. For example, Stanley released special editions and colors - and people literally maul each other over those. Starbucks always sees an increase in revenue during pumpkin spice season (because it’s delicious!).
Price Anchoring
Anchoring, often called price anchoring, is when you set a reference point for pricing. Price anchoring can take a lot of different forms. What you want to be cautious of with price anchoring is inflating your prices. You don’t want to leave things permanently discounted, but tell your buyers that it’s on “sale”. You don’t want to inflate the price, and then put it on sale - so they aren’t actually saving. That’s really scammy.
Examples of Price Anchoring
One way to use price anchoring is during a sale. Instead of saying the item is now $10, you can say the item is now $20 strike through that, and then write the $10. That can go on your sales page, storefront, emails, and so on. The idea is that when they see what the price was versus where it is now - people get excited. They see the full effect of the deal they are getting.
You can also do this during a launch. For example, you might have a workshop or membership with $400 worth of resources inside, but you’re charging $30 a month.
Another way to use price anchoring is by showcasing different levels of pricing. So I could have a membership or a service with different pricing tiers. It could be $50, $70, $130. The price difference between the $70 and $130 is a lot more than $50 to $70, making it feel like an easier jump to choose the second tier. It’s kind of like when you go to a fast food place and they say, “For $1 more you can add XYZ item.” That sounds like a great deal!
Marketing psychology is influencing how you buy every day, whether you notice it or not. Try some of these strategies in your business, and see if it affects your sales!