There was an annual event that took place a few weeks back that had a dilemma…
The Fire Marshall only allows a certain number of people into the event space, and the event’s headliner has millions of fans all over the world.
As word spread, it was clear that this year would be a sellout.
What to do?
Open up a new space and sell more tickets? Move the venue to accommodate more people?
Nah…
If people wanted a ticket to party, they’d need to act.
“Wait… What do you mean I can’t get in?”
As with any promotion, a big chunk of people waited until the last minute to buy…
Some even waited until after the deadline, and the results got ugly…
I hope our mom friend decided to keep the babysitter and have a good time doing something else, but it’s clear she wasn’t going to spend any time with cupcakes OR cowboys.
Fire capacity limits aside, this sold out event (and our friend’s message on social media) will do wonders for next year’s marketing surrounding this event.
If the event host is smart, they’ll even use this woman’s shocked pleas for extra tickets in the marketing package.
Dastardly?
No… just trying to make sure others don’t suffer the same fate.
The reality is that many people won’t act unless there’s a chance they won’t get what’s offered to them.
The Law of Limited Resources in Action: Would You Trade Your Freedom for a TV?
Why do entities of all kinds limit access to their products?
Let’s answer this question with an example you’re probably familiar with…
Black Friday Fist-Fights
Every year like clockwork the local news networks have a camera crew camped outside every Walmart, Radio Shack, and any other store offering “crazy” doorbusters.
It’s not because they want to capture the spirit of the season or any other heartwarming human interest story—it’s because they want to be there to capture the gore.
And as if on que, each year these news stations are rewarded…
Walmart has three 4K TVs for $200?
That’s 5 o’clock News gold…
Some people want that $200 4K TV so bad, they brawl and get arrested while scratching to grab the last one.
That’s right—every year there’s people willing to trade their freedom for a TV.
I don’t know, maybe it’s worth it.
The point is: when people believe that what they want is in short supply, they’ll sacrifice more important things to acquire it.
Companies know this and act on it.
(You think Walmart can’t get their hands on more than 3 of these crappy TVs per store?)
Other Examples of Companies Limiting Supply…
Limited supplies force customers and clients to make a buying decision, which is why you see so many companies limiting their supply.
Disney has their “Disney Vault”…
McDonald’s has its McRib…
Information marketers offer their programs during limited windows…
Getting Back to Our Mom-Friend…
That limited access increases perceived value is more than anecdotal.
In a study published in the Journal of Personality and Social Psychology, Worchel, Lee, and Adewole showed that people value things more when they feel those things are in high-demand and short-supply. Their perception of value also increases dramatically when something that had been abundant is made scarce due to high-demand—the study participants in that case went from perceiving the item to be of low value, and changed their view to see the item as high-value.
What does all that mean?
It means that most people will think something is more valuable when:
- The supply is low, and
- The supply is low because it’s desirable to other people
[bctt tweet=”Anything will be valued in proportion to it’s scarcity.” username=”theellispond”]
(The perception of value works the opposite direction as well, as was hilariously demonstrated in this video of world-renowned violinist Joshua Bell performing as a busker in the Washington, D.C. subways. He routinely sells out concert halls for hundreds of dollars per ticket, and plays in the world’s most prestigious venues, but when confronted with this world-class busker offering FREE music… less than a handful of people stop to listen.)
What does this all mean for our mom-friend who was unceremoniously locked out of her cupcakes and cowboys?
I’d bet that if someone gave our mom-friend a ticket to that sold out event, she’d have enjoyed herself more than if she’d purchased tickets when they were still available. I’d also wager that she would have paid a premium to get into that event if nobody had an extra ticket to give.
Either way, next year you can count on our mom-friend buying a ticket as soon as the event’s cart opens.
Which leads me to my final point: why locking this mom out of the event is good for business.
- It establishes this event as a high-value affair
- It demonstrates that there are a bunch of other people who are interested in the event as well
- It teaches her to buy when she has a chance, rather than waiting until the last minute and risking a repeat of this year’s missed opportunity
While in the short-run this situation keeps a paying customer from enjoying the event, the lockout builds anticipation for the next event, and conditions her to act fast the next time the cart opens.
Whether you’re selling tickets to an event or anything else, closing down an offer (and sticking to it) can inspire action in customers who would normally watch the offer come and go without making a decision.
And as with all things mighty and small: with great power comes great responsibility. Only use your powers for good.
How to Get More…
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