Internet Marketing: 6 Steps for Using Scarcity Tactics with Integrity

If you’ve been in business for a while you probably know that scarcity is an extremely effective marketing tactic.

And for those of you who are new to marketing – whether online or offline – scarcity occurs when there is a limitation on a product or service. This limitation can be an actual limited product supply – “We only have 200 of these models left” – or a time or quantity based discount or special offer – “This early-bird pricing is only available until September 18th. After that the price doubles!”

One thing we know is that scarcity works!

When done well, this technique has proven to create a sense of urgency in customers and prospects that causes them to pull out that credit card and make the purchase NOW!

In most cases that’s a good thing for everyone. It’s certainly a good thing for you as the business owner. But it is often also a good thing for the prospect. When the product or service being marketed is truly a valuable resource, sometimes giving the prospect that little extra “nudge” gets them to say yes to something that will benefit them.

Obviously, as with any effective marketing technique, it can also be used without integrity – and I’m sure you’ve seen plenty of examples of scarcity being used in that way.

But for the conscious business owner, an important question to ask is: “When do scarcity tactics cross the line and diverge from the path of integrity?”

Certainly there is a place for scarcity tactics within the marketing toolbox of the conscious business owner. But this path is one that quickly can turn into a slippery slope.

I’ve noticed that some of my virtual mentors – people and businesses that I consider examples of how conscious and successful can coexist within a business – using scarcity tactics in a manner that seems to be heading down that slippery slope.

If you read my Evolving Times blog, you know that I’m a big fan of motivational events and seminars. I’ve attended many events put on by Peak Potentials Training, James Ray, Robert Kiyosaki, and others. Each of these events has provided me with major value, and I highly recommend them. And, without exception, they use scarcity techniques to upsell additional events and products.

If you want to see some truly brilliant marketing in action, attend one of these events. You will get to witness master marketers at work! Even without the value you get from the event, the opportunity to learn from and model their marketing methods on its own is worth the cost of admission!

But, as I’ve observed their methods, I’ve begun to question whether or not some of their marketing tactics cross the line and start sliding down that path away from integrity?

In some cases, I would say yes.

If you’ve been to one of these events, you already know what I’m talking about. When they do a sales pitch or a “bookstore” for another product or event, they use lots of tactics to whip the crowd into a buying frenzy!

But the tactic that gets people – sometimes hundreds of them– literally running to the back of the room with their credit cards in hand is scarcity.

Now don’t get me wrong, I feel they are completely justified in offering “at seminar” special pricing. It makes sense to provide an incentive and benefit – a big discount – to the participants who take action during the event.

However, they often create a further sense of urgency by saying that enrollment at that price is limited to a certain number of people. And this is where I begin to question the integrity of their tactics.

It just seems arbitrary. Often they do not give any reason for the additional limiting factor. It seems to have been pulled out of thin air.

But the real issue I have with it, is that I have never seen that second limiting factor enforced. I have often estimated the number of people at the sales tables. And, unless my estimates are way off, far more people are purchasing the “special” than the number they said were available. And, as far as I can tell, no one was turned away or told that they would have to pay the higher, non-limited, price.

I struggle a bit trying to reconcile my belief in the value of the events and products they are offering and some of their marketing tactics that, in my mind, stray from the place of integrity.

And these questionable marketing tactics extend beyond the live events and into some of their Internet marketing tactics.

Here’s an example of an Internet Marketing scarcity tactic from a person I – still – consider one of my primary role models. I must admit that when I saw this, it definitely shook the pedestal that I had placed him on!

Now, at face value, there’s nothing wrong with this tactic. In fact, you certainly COULD use this kind of tactic with integrity. However, the webpage for this event had this text – exactly as you see it here – for at least 6-weeks prior to the event – and it’s still up there even though the event happened over 2-weeks ago. So either they were having a really hard time selling that last seat or they were stretching the truth a bit!

Now if integrity is not one of your core values, than, by all means, go ahead and use scarcity in any way you desire. The Machiavellian approach to Internet Marketing – the ends justify the means – definitely does work. And you see it put to good use by a lot of online marketers.

But if you are a conscious business owner for whom integrity matters the question becomes:

“Can you harness the power of scarcity with integrity?

I believe you can!

And here are the guidelines that I use when incorporating scarcity tactics into my marketing efforts:

1. Be sure the product you are offering is of true value.

This – hopefully – goes without saying. But I’m saying it anyway. As a conscious business person, it is your responsibility to ensure that you are offering high value to the right people. From a long-term, business success standpoint, it makes absolutely no sense to offer products or services that are anything less than the best you have to offer.

2. Market to the appropriate target audience.

Do you know who you are marketing to? If not, you’re going to run into trouble. Get very clear on your target market and make sure you market to them! And test that target market: If your return rate is much higher than 5% you probably need to tweak your marketing strategies to ensure that you’re marketing to and attracting the right types of customers.

3. Clearly describe your target market in your sales copy.

Once you know who you are marketing to, make that clear on your sales page. Don’t be afraid to include copy to filter out inappropriate prospects. While you may lose some short-term sales, ultimately, this is going to increase your business credibility, reduce your return rate and increase the lifetime value of your customers.

4. Offer, and honor, a money back guarantee.

When you use scarcity in your marketing, no matter how clear you are in your sales copy, some people who are not appropriate will end up pulling the trigger and purchasing your product or service. If you’re going to use scarcity tactics to create a sense of urgency that causes people to buy, you must be willing to back it up with a strong guarantee.

5. Make it real.

Artificial scarcity can very quickly erode a business’s credibility. How many times have you seen a sales page with an offer such as “Today only the price is 50% off” only to discover, when you go back a few days later that the price and the offer is exactly the same. You know, something like this:

“P.P.S. Don’t forget. This price is guaranteed for today only. We’ve increased the price before and will probably do so again. I’ll keep it here at least until midnight tonight (EST), but make no promise about what it will cost you tomorrow. If you pass on this now – you may not be able to buy x at this price when you come back to this site tomorrow.”

If you’re going to use scarcity, make it real, and take the time to put the technical pieces into place so that it truly is a one-time-offer. Check out your shopping cart to see if you can set up automatic expiration dates for coupon codes. The cart I use, 1shoppingcart, can do that and a lot more.

Also if you’re going to create a one-time-offer, make sure it really is! If you want an example of a one-time-ofer that really does go away, visit my Energetics of Attraction Digital Learning Course page. I’m using a product called ShowStopper to set up the one-time-offer. It’s inexpensive and easy to install – though I have noticed a few little kinks! There are also free scripts that you can download and install. And you could also set this up on a wordpress page using a plugin.

For another example of a truly masterful one-time-offer, sign up for a free Simpleology 101 account. I consider Mark Joyner to be a master at using marketing tactics that work with integrity! Pay close attention to what happens after you sign up!

6. Be clear about the reason.

Why is this scarcity in place? Why is the product limited? Why will the price go up after midnight? If it’s a bogus reason, you’ve instantly lost credibility. Make it real. There are a ton of valid reasons why you would place a limitation on a product or service. It’s a bit more difficult with digital info-products. But if you use your imagination I bet you can come up with some good ones! And when you do, make sure you let your prospects know the reason.

So those are the guidelines I use to ensure that the scarcity tactics I use – and in fact, all marketing tactics I use – are used with integrity.

I’d love to know your thoughts. What guidelines have a left out? What are your thoughts on using scarcity in general? Do you have other examples of scarcity marketing that works with integrity?

The bottom line: If you’re a conscious business owner, go ahead and use scarcity, it works. But use it with awareness and an eye towards long-term business sustainability rather than short-term profit. If you do that, everyone wins!

And by the way, this post is an entry in the Problogger Group Writing Contest. There’s still time to enter!