The Scarcity Heuristic: Why We Want What We Can’t Have

You’re at a dinner party and the host brings out an incredibly rare bottle of wine from a vineyard makes 100 bottles a year. The only way to get this wine is if you visit the winery in a remote region of Spain. Whether you’re aware of it or not, your brain really wants this bottle of wine right now. 

People desire what they can’t have.  And the more scarce we perceive something to be, the more we desire it.  Our primal instinct of desiring rare things has subtle powers in everyday commerce and communications, even in technical B2B industries or non-financial situations.  And understanding this insight … can generate Catalytic Results! 

The brain uses heuristics—or shortcuts—to make decisions. And one shortcut is our brains’ desire to validate something’s value based on how rare it is. 

Do you remember Twinkies? Those spongy little cakes with a creamy filling that you could find in convenience stores and gas stations?  Well, in 2012, Hostess, the parent company who owned Twinkies, went bankrupt and temporarily shut down its operations. The price of Twinkies on auction sites like eBay skyrocketed! People were bidding a hundred dollars for these treats that, just a few days before, were being sold for less than two dollars at the corner store!  People want what they can’t have.  

So this is an extreme example of scarcity driving desire, and one that wasn’t favorable to the company.  You may be thinking: Our goal is to sell more of our products, not less. And you’re right. But by limiting access to your offerings may actually result in selling more.  

Here’s another famous example of how scarcity created a huge change in response.  By altering just a few words in the ‘call to action’ of an infomercial. Every infomercial used the same call to action, saying “Call now. Operators are standing by”.  Then one writer decided to flip the script, saying instead that “If the line is busy, call again”. Viewers changed their behavior. And guess what? Call volumes increased!!  By creating a sense of scarcity — one that implies that the offering may be gone if you wait — they sold more product. 

Now here’s an example in a science context: I remember when a big university had spent hundreds of millions of dollars to create a ‘translational research’ center off campus. However, they had a hard time generating interest among their researchers to move their labs to this state-of-the-art facility. Researchers felt that they would be disconnected and outcast from the main campus.  So the administrators flipped the script and created a sense of scarcity by claiming that not every researcher would be able to go, and that they had to apply to be considered. Naturally, researchers wanted what they couldn’t have, and interest to move to this new research center changed immediately.

Let’s say you are going to introduce a new product in a B2B market. Instead of plastering your messages and beckoning every potential customer, why not limit access instead, especially through an early access program?  You may actually pique more interest, and more of those precious early sales, than through traditional methods.

Technical professionals are barraged with information and offers with increasing volume on a daily basis.  If your job requires that you reach these professionals and persuade them to act in any way, consider how to leverage scarcity to cut through the noise. 

Humans are beautifully complex. And our actions are governed by certain patterns. Understand these patterns, you can inspire people to action and create Catalytic Results.

Business Examples + Studies

One of the most famous studies in demonstrating the scarcity heuristic comes from a few researchers who wanted to see how people’s sense of value changed among two options. By filling two jars with cookies — one jar with a lot of cookies and one jar with few cookies — they observed which jar people would value more. Would you be surprised to know that it was the jar with fewer cookies?

According to this research article written at UC San Diego, scarcity is “a human-unique preference that develops as humans increase their cognitive skills and social experiences with peers and competitors.” The paper goes on to explore the idea that scarcity may have evolved out of hierarchies created by humans and mating strategies.

Facebook is one of the best business examples of a company demonstrating the power of scarcity and exclusivity. When the social media channel first launched, it was only available to those who had college or university email addresses. Because it wasn’t available to everyone, the appeal for other’s outside academia to have their own Facebook account was strong. So in 2006, the company opened it’s (figurative) doors to include everyone. Today, Facebook boasts over 2 billion users.

When you book a hotel online, does that little message, “Only X amount of rooms are available at this price. Book now!” ever pop up? Booking services like Kayak.com or Hotels.com leverage the scarcity heuristic all the time to encourage visitors to book on their site. In fact, the practice is so common that an organization in the UK has asked these sites to stop using misleading tactics, like the one mentioned above, to increase sales.