How to Use Urgency and Scarcity to Improve Conversions

by 11 08/06/2014

Conversion optimization is way more than button size, font colors, and sizzling calls to action. It’s also about the inner psychology of the user, known as customer psychology. This is such an important part of digital marketing that I wrote The Complete Guide to Understanding Consumer Psychology.

My fundamental assertion is this — “psychology is mission critical for traffic acquisition and conversion optimization.”

That’s why I’m going to explain two psychological tricks and how they could instantly grow your revenue. This has nothing to do with how many pixels wide your CTA button is, or whether your capture form is above the fold or below the fold. This is all about harnessing the power of the human psyche to introduce a flood of conversions.

Urgency and Scarcity will Improve Conversions

First, I will explain what urgency and scarcity are. After that, I’ll share some tactical ways for introducing these strategies into your website.

What is urgency?

Urgency is when a buyer feels like they need to act quickly.

Urgency is the feeling that whatever is going on is really important, and therefore, immediate action should be taken. There are three specific features I want to point out regarding urgency.

Urgency starts with importance.

In order for something to be urgent it has to be important. Think about a man selling helium balloons at a golf course. He can’t really use urgency to sell his balloons, because no one at a golf course needs or wants a helium balloon.

But if he’s selling the helium balloons at an amusement park where children can see them, then the urgency level may increase. A screaming and crying kid might be persuaded not to scream and cry if he or she receives a balloon. Most parents feel a sense of urgency when their child starts screaming or crying.

It’s all about importance. If your product or service is important, then users will be more inclined to respond to urgency.

Urgency has everything to do with time.

Even though urgency starts with a sense of importance, its real value is in timing. You don’t just want people to convert. You want them to convert now. A delayed conversion is a lost conversion.

Urgency tells people to act now. This is is why used car salesman feel the need to scream on television ads, trying to convey urgency to buy now! The idea is if you feel urgent, you’ll not only buy a car, but you’ll probably feel the pressure to do so within the next four minutes.

Urgency is a feeling, and you are in control of creating this feeling.

The great thing about urgency is that you are in control. Your website copy, your images, your buttons, your messaging — these can all be leveraged to increase the sense of urgency on a page. I’ll tell you more about how to do that later on.

What is scarcity?

Scarcity is the feeling that a product or service is in short supply and about to run out. One marketing advice piece puts it like this:

Scarcity refers to any limitation placed on a product or service with the goal of increasing sales through pressure placed on the consumer. The fear of missing out causes people to make the decision to buy.

The fascinating thing about scarcity is that when something begins to run low, people’s desire tends to rise. The inverse relationship looks like this:

Plenty of stuff — no one wants it.

Not much stuff — everyone wants it.

Low supply often creates high demand, as long as the product or service is good enough. Like urgency, scarcity compels action. It eliminates procrastination. If products are flying off the shelves, and they’re almost gone, you have no time to lose! You must buy now!

Here are a few key features of scarcity that you should know about:

Scarcity is perceived.

Often, the sense that something is scarce is created. Sometimes, it’s just a gimmick. Scarcity is such a common marketing technique; everyone tries it.

But few people do it right.

Do you really think that the local furniture store keeps going out of business every six months, and liquidating their entire stock? No! They’re just plastering those signs on the windows, because you as the consumer might think, “Oh no! They’re getting rid of everything! I need to buy it now! It’s probably so cheap!”

But if they declare “LIQUIDATION” every six months, they have completely lost their trust. Scarcity as a marketing technique doesn’t work anymore. The scarcity perception can and should be created through legitimate means.

Scarcity can be regulated.

Most of us can control the level of supply of our product or service. If we need to make more widgets, we can increase production. If we need to take on more consulting clients, we hire more staff.

Is scarcity even a thing? Can we even use it?

Yes. You can create scarcity arbitrarily, by imposing limits, setting client acceptance caps, and making similar statements.

You are in control of scarcity.

The Psychology of Urgency and Scarcity

Urgency and scarcity really work, and they work quite well. People tend to act quickly when an issue is important enough. People tend to buy when something is scarce enough. These two techniques change the consumer’s behavior toward supply and demand — two fundamental economic building blocks.

Buyers do what their instincts tell them to do — to act immediately on what is important (urgency), and to acquire what is limited (scarcity).

How to Create Urgency and Scarcity

Let’s get tactical now. You know that urgency and scarcity work. Now how do you roll out this psychological power on your website and landing pages?

How to Create Urgency

Here are some of the best that I’ve learned to create a sense of urgency.

  1. Pick a deadline.

Remember how I told you that urgency is predicated upon time. This is where the true power of urgency is unleashed — time limits.

Deadlines are the perfect means to increasing urgency. Pick a deadline, and announce it.

  • The deadline for signing up is August 5.
  • This sales ends at 12am on September 1st.
  • Beginning October 3, I will no longer be accepting new patients.
  • Orders must be placed within 24 hours.

Amazon.com uses this tactic on their product pages.

urgency 1

We’re driven by an overwhelming feeling of the importance of time. When a marketing message or a call to action is attached to a time, our urgency level automatically goes up.

  1. Use words like “now,” “hurry,” “instant,” and “immediately.” 

These words tell people to do something right away. There is no waiting around. I use these terms on my website www.neilpatel.com, and have seen incredible success.

My call to action button uses the word “now.”

urgency 2

I also encourage users to “hurry!” in a bit of text at the bottom of the page. My goal is to increase the importance of a reservation, and to compel a response right away.

The word “now” pushes people a little bit to convert.

This button is from coschedule.com:

urgency 3

Ramit Sethi from iwillteachyoutoberich.com uses the word “instant” on his CTA button:

urgency 4

  1. Show big numbers.

Urgency works with data. When you introduce large numbers into the conversation, you are raising the importance of your product or service.

Basecamp uses big numbers to elevate importance, and therefore to encourage urgency:

urgency 5

Crazyegg uses a number on the landing page, too.

urgency 6

  1. Use urgent colors.

Red, orange, and yellow can sometimes introduce a feeling of urgency. Red is the color of stop signs and traffic signals. Yellow is the color of caution and yield. Orange is the color of construction cones. Red, orange, and yellow are the colors associated with heat and fire. Red is a color associated with passion and love. It’s also the color of blood.

I told you this article wasn’t just about buttons and colors, but color psychology and customer psychology do overlap. In a study conducted by Hubspot, switching to a red CTA button from a green one increased a site’s conversion rate by 21%.

urgency 7

SAP BusinessObjects tested a blue text link vs. a large orange button, and found that their conversion rate increased 32.5%.

urgency 8

Image from dmu.cdmginc.us

 

I’ve chosen to use orange and yellow buttons on some of my websites, because I’ve tested for higher conversion rates with these colors.

Here’s the button from CrazyEgg:

urgency 9

This one is on Quicksprout:

urgency 10

Here is Neilpatel.com:

urgency 11

With you website, make sure you test which colors convert the best for you. Just because one color worked best for me, it doesn’t mean it will work well for your business.

How to Create Scarcity

As I explained above, scarcity is completely in your control. Whether you’re consulting, selling a widget, or providing SaaS, you are in control of production and/or customer acceptance.

Scarcity is all about perception. I’m not proposing deception, like pretending that you are running out of product while sitting on a huge stockpile. Instead, I’m proposing a shift in perception. Notice this critical distinction in these techniques:

  1. Put a limit on what you accept.

You can put limits on anything. As a business decision-maker, you have every right to do so. People are not entitled to your product. You can provide it at-will. If you want your product or service to be limited, so be it.

If you are a consultant, this is easy. You only have so many hours in the day, so many slots for meetings, and so much energy to expend. That’s why I am clear about my consulting limitations on my website:

urgency 12

If you sell a service, even SaaS, you can create this sense of scarcity by limiting how many customers you accept.

For example, you can announce that you’re accepting only 400 new customers during the month of September. What does it matter that you average 80 customers a month ordinarily? As long as you put a limit on your acceptance rate — any limit — you are creating a sense of scarcity.

Display stock limitations.

If you sell products, you have stock to deal with. This is a legitimate source of scarcity. Again, Amazon employs the scarcity technique to increase sales on some products:

urgency 13

Even if you don’t have a physical stock, you can still have regulations on what you will do and sell.

The whole idea of Groupon is built on scarcity. Each deal lasts a limited time, has a limited quantity, and is limited to one purchase per customer.

urgency 14

You know Black Friday? What inspires people to trample each other, arising at ungodly hours of the morning, neglecting self-respect, and engaging in rabid doorbanging marathons? It’s scarcity.

Conclusion

Using the parallel powers of scarcity and urgency, you can boost your conversions and your revenue.

Unfortunately, some companies have turned these techniques into gimmicky scams. They sound more like jokers than legitimate businesses.

I think you can do differently.

How are you going to implement urgency and scarcity into your business?

About 

Neil Patel is the co-founder of Crazy Egg.

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11 COMMENTS

Wayne Olson

Neil~

I think you have to be awfully careful with scarcity and urgency these days. Nothing turns me off more than to see an internet marketer announce “only 8 left,” and see the same announcement two weeks later in another mailing, or by another marketer that picked up the offer. I think it gets very close to the scam level in credibility. If you have something that is really in short supply, then it’s fine to communicate it…..it’s actually providing a service. But to create it out of nothing to take advantage of the buyer psychology you talk about, is wrong. I would never use it that way. Sorry to disagree with you, but I do.

August 6, 2014 Reply

    Neil Patel

    Wayne,
    Thanks for the feedback. I’ll definitely keep your thoughts in mind.

    August 6, 2014 Reply

Karan S.

Great article and indepth explanation.
I think the scarcity part is harder to implement than urgency and I wonder if creating scarcity is always beneficial for b2b saas type of offerings.

August 6, 2014 Reply

Karsten Lund

Hi Neil,
Great article – Your describing the 2 very well.

I do however want to point out, where you kind of move out of bounce – that is during your 4 points in creating sense of urgency. #1 is correct – set a deadline – the 3 others however really do not as such fall under the category “sense of urgency” –

2) Add’ing “movement” into the wording is not the same as urgency – as it just relieves the “pressure” of knowing that you do not have to wait for long
3) Big numbers? – really – sense of urgency – no… its Social Proof – or Quantification as oposed to Qualification
4) Colors? – no – nothing to do with creating a sense of urgency

But other than that – well written – to the point, and filled with examples :)

-Karsten

August 6, 2014 Reply

    Neil Patel

    Karsten, thanks for the feedback. Always enjoy hearing feedback from others :)

    August 7, 2014 Reply

Lawrence Berry

Neil,

Great advice here, and great examples too. The way you have broken down the subject matter proves to me that you know what you are talking about and I think you are absolutely correct. People tend to buy more immediatley when they feel a sense of urgency, but also, to create this urgency you have to show that the product or service you are trying to offer will create value in the buyer’s life. I think when people think they will be missing out on something valubale creates even more of a sense of urgency mentioned. Thanks for sharing, I will definitely used these techniques in the future!

Regards,
Lawrenece

August 7, 2014 Reply

    Neil Patel

    Lawrence, glad we could help. Please let us know if you have any questions or if we can help in any way :)

    August 7, 2014 Reply


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