Artificial Scarcity

by John Eberhard

In this article I am going to talk about a marketing strategy or copywriting strategy, and actually, a whole business model, that exists today. You may have seen this strategy used. I'm not in favor of it.

My first experience with what I will called the "artificial scarcity" model was maybe 20 years ago. I responded to some offer of a free 2 day cruise or something like that, and you had to sit through a presentation where they tried to sell you something. In this case we got on a bus and went up to the desert. They had built a recreation center and hotel in the middle of nowhere, and they were selling plots of land around this thing.

The idea was you buy a plot of land, you get access to the recreation center and hotel, like a timeshare, and eventually a town will get built there and your land will be worth a lot more. Well I didn't know if a town was ever going to get built there. Before I committed to spending $15,000 I wanted to d a bit more research. But no, the deal was only available that day.

About 5 years ago, a company called Stompernet released a course on how to market on social media. I think the course cost around $2,000. This was at the beginning of social media marketing, and these guys knew how to do it and no one else did at that time. So their course offering broke all records and they made millions within two or three days.

Since this release made such a big splash, I did some research on it at the time. There was one guy associated with the release who did the copywriting and the release strategy.

Basically it was a case of created, artificial scarcity. The course was only going to be offered to X number of people and only until X date. But why was it only for X number of people and until X date? Why couldn't it be a situation where they could sell it to an unlimited number of people, and continue indefinitely, the way most companies do business?

They purposely made it that way to create the idea of scarcity. From the marketer's point of view, this gives you a couple advantages:

1. Some people will sign up for the service who otherwise would not have, because they fear they will miss out otherwise.
2. People have no time to do any due diligence on the purchase.
3. You can probably inflate the price higher than you could otherwise charge. 

Of course there is one big disadvantage, which is, if you end up having a big hit on your hands, you are limited to how many you can sell and how long. You aren't really in a business. You're just sort of doing something temporarily. And you can't later go back and say "Hey we're offering this now again, or for a longer time," because then you totally lose credibility.

I studied some material from this copywriter who did the Stompernet release, and he listed out all these other releases he had worked on (mostly courses), and they were all done this way, with the release only being offered for a short period of time and then it wasn't offered any more.

One reason offered for doing it this way was that the person giving the course and the "personal coaching" could only coach so many people at a time. But this was a made up reason, because if he's such a good coach he could train other trainers, like most businesses do.

Recently I saw a reputable company that I respect offer a course on doing copywriting this way, with headlines saying that you could "5x your conversions." I checked into it and found they were promoting this artificial scarcity strategy. I had no interest in this, and I have never tried to create a campaign this way for my company or any of my clients.

I object to this model for a number of reasons:

a. I think scarcity is not a happy thing in life or society, and to artificially create it is not a constructive business tactic.

b. I don't like the way this strategy or business model manipulates people and plays off their fears. Based on fear, some people will end up buying the product or service that would not have otherwise bought it and may not really need it. Also they will probably end up paying too much for it.

c. I think to create a viable business or service offering is not necessarily an easy task, so to assign an arbitrary cutoff date, where you won't sell the item after that date, is foolish from a business perspective.

I think the proper way to write copy and market, whether it is online marketing or offline marketing, is to have a product or service that people need and is a helpful and useful product or service, to tell people why it is good and what benefits they would get from it, let people do any research they want, and let them make up their minds. The usefulness of the product or service should be what sells them, not gimmicks or manipulation.

That is not to say that you can't occasionally have a buy now discount, that ends on a certain date. That's quite a bit different. But threatening to take away the product or service completely is too manipulative, and I advise people not to take this route.

Posted via email from Real Web Marketing's Posterous

Social Media Engagement

by John Eberhard

In past articles I’ve talked about the necessity of getting lots of friends, followers and connections on social media sites, if you want to use them effectively for marketing purposes.

But there is another important point that is vital in effectively using social media sites to market. That is your amount of engagement with others on social media sites. By engagement in this case I mean “interacting back and forth with people on the social media sites.”

The idea is that you are not just outflowing information or messages to your friends, followers or connections on sites like Facebook, Twitter or LinkedIn. You should be viewing what other people are doing or saying and interacting with them about it.

I was talking to a friend about this recently and I could tell he thought it would be a daunting task, i.e. that it would take him too much time. But I think it is important if you want to get much benefit from social media sites, and I don’t think it has to take a lot of time. Here are some examples:

1. On Facebook, click on “Home.” This brings up a feed of things that your Facebook friends have posted, including short blurbs about what they are doing, comments on things, links to articles elsewhere on the web, pictures they have uploaded, or links to videos on YouTube. Quickly scroll through this feed to look for things that interest you. If someone has posted a blurb or comment that you agree with, click the “Like” button underneath that post. Or post a short comment on it yourself. Similarly if someone has posted a link to an article or video that you like or agree with, click the “Like” button or post your own comment. It is easy to spend excessive time on this but you should discipline yourself and make it take no more than 5 minutes a day. When you click the “Like” button or post a comment on someone else’s content, they receive an email. It shows them that you give a hoot about them and it’s not all about you.

2. On Facebook, in the upper right area of the page you can click to see a list of your Facebook friends for whom today is their birthday. Review this list and for anyone who is a real life friend, write a quick “Happy birthday Joe” message.

3. On Facebook there are groups or fan pages you can find about areas of interest or about your industry. Click “like” on some of these groups and follow or join in the discussions that appear on their fan pages.

4. Facebook has its own email system. Read any Facebook email you get and reply to it.

5. On Twitter, you can spend a few minutes following the posts of other people that you are following, then “re-tweet” the ones you like (that means to send that particular post again out to all of your followers). Or you can send them a direct message via Twitter.

6. Set up folders in your email program and set up mail rules that will dump all Facebook emails into a folder for Facebook and all Twitter emails into a folder for Twitter. That way they do not clutter up your main inbox and you can handle those emails when you have time.

7. On Twitter, you will receive emails that say “Direct message from Joe Jones.” Unfortunately a lot of these will be automatically generated messages that others send out whenever someone follows them, most saying “Thanks for following me. Look forward to reading your messages.” Some will include a link to something they are pitching. I think whoever invented the auto direct messages on Twitter should have a special seat reserved for them in a very hot place, next to that guy who invented that sticky tape along the top of a CD jewel case. The auto direct message is an unfortunate thing you have to put up with. But be on the lookout for any direct messages from others who are actually communicating to you. Reply to them.

8. One thing you can do on Twitter is do a search for your company name or brand, and see what people are saying about you. Then respond to them or re-tweet their stuff if it is positive. If it’s negative, it gives you a chance to monitor any problems and respond to them.

The web, and especially social media sites, are all about interaction, a conversation, back and forth. In the days before the web and social media, most companies were used to putting out communications that their public or consumers would receive. The public could write them a letter but most people never did that.

Today with social media it is much easier for people to write back to a company, or to comment about it. It’s vital, especially as your company expands, to be aware of what people are saying and to respond and be engaged in conversation.

But even beyond managing your public relations, it is best to engage with others on social media sites. By showing interest in your online friends and what they are saying and in responding to their communications, it ensures they will show more interest in you.

Posted via email from Real Web Marketing's Posterous