Here’s a good marketing tip for you: Scarcity creates demand.

Here’s a bad marketing tip for you: Scarcity creates demand.

What’s the difference? I think it comes down to your intention, and how you use scarcity. Stay with me here for a second, and let me take one step back, in order for us to take two steps forward ok?

I recently joined The Third Tribe, a community which promotes “Internet Marketing Strategies That Work (Without Being Obnoxious).” The organization’s name was coined by its founders, some of the highest-ranking bloggers in the world. They felt that the world of Internet marketing is becoming over-hyped (I agree) and wanted to create a platform that reinforced authenticity and value (that’s my description of The Third Tribe, not theirs).

With “anti-hype” in mind, let’s look at the concept of scarcity.

Good scarcity, I believe, comes with a valid reason. The leading reason to use scarcity as a marketing tool would be genuinely limited supply. For example, an auto dealership might say “There are a limited number of 2010 models left and we are selling them at a discount in order to make room for 2011 models.” That makes sense, right? It is believable.

Bad scarcity, on the other hand, is fluff. There’s nothing backing it up, as in this ad:

Bad scarcity is based on hype

Now maybe it’s just me, but do you REALLY believe that this guy has only four spots left? I don’t. If you were to go to his website you’d see that he is offering discount upon discount upon discount.  If demand for his product is so high, why offer all of the discounts?

Besides, what’s so special about March 1? That is an artificial deadline that he created in order to establish a sense of urgency…probably before he rolls out his next promotion.

With this in mind, allow me to suggest the following formula:

Scarcity + Believability + Transparency = Success

If you offer a promotion, there’s a good reason for it and you are up front about it then it should work. If it’s not successful then you probably have a product issue or a pricing problem. And as we say frequently in the Free Marketing Made Easy program, even good marketing won’t fix fundamental business flaws.

There are plenty of marketers making money through the use of false scarcity, and they would probably disagree with my approach. But Free Marketing Made Easy isn’t just about making money; we’re about authenticity and genuine relationships. If that’s the kind of business you want to create then check out our podcast series for more great (free) tips and post your success story on our Share Your Story page (coming soon).