How To Use Scarcity the RIGHT Way (and Sell More)

What if you could turn your website into a conversion machine with just one small change? We did this for a client recently and saw a 40% increase in meetings booked. Sounds too good to be true? But it’s backed by human psychology and proven marketing methods. When surveyed, 45% of consumers said they were more likely to buy when they saw this in action, 17% found it off-putting.

So what’s the cheat code for more interest and more sales? Meet the scarcity principle. In this article I'm going to give you some real life examples of how service (and ecommerce) businesses can use the right scarcity marketing tactic.

The Power of Scarcity in Action

Imagine you’re casually checking out a personal trainer's website. You’re not ready to commit, but you’re just looking for now and browsing around. Then you notice that the website mentions they’re down to their last available slot for the month. What does that information do to you? It triggers something, right? You suddenly feel the pressing need to grab that last spot even though seconds ago you were just window shopping. This is the scarcity principle in action.

Don’t feel targeted or manipulated; it’s just your brain playing by the rules of scarcity. The principle of scarcity says that we want NOW what we think we may NOT be able to get in the future. It's like our brains are wired to prioritize what’s fleeting, exclusive, or hard to come by.

What Is Scarcity in Marketing?

Scarcity in marketing is all about creating a sense of urgency by highlighting limited availability or exclusive access. As Dr. Mindy Weinstein, author of The Power of Scarcity, puts it:

It’s some availability, or a restriction of some type. Scarcity leverages our natural fear of missing out, pushing us to act quickly to secure what’s scarce.

Dr. Weinstein’s book dives deep into the psychology behind the scarcity effect, exploring how businesses can ethically use this principle to boost engagement and sales. By integrating scarcity into your marketing strategy, you’re tapping into a powerful motivator that’s hardwired into human behavior.

There’s also this great video that Chris Do from The Futur recently released that you should check out.

How Scarcity Impacts Buying Behavior

To dive into scarcity tactics a little more, here’s a quick overview of what Dr. Mindy Weinstein said. If you can, in some way, show that:

• You’re exclusive
• You’re selective
• You have certain popular service bundles

The part of our brain that is associated with value will light up right away. This has been seen in brain scans, and for context, this is not a situation in which a participant was told they’re not going to get food or water or something that’s essential to their survival. Instead, think more of an auction simulation, where there's a sale going on. The fact is that the brain reacts the same way regardless—the mere thought of missing out elevates the perceived value of what’s on offer.

Data Backing Scarcity

And this isn’t just some random web tactic; there’s actual data behind it. A study conducted by Northwestern University (NWU) found that products with limited availability were rated as more attractive. It’s almost like the potential of losing out on a product elevates its perceived value. Scarcity doesn't just make people want your services more—it also accelerates decision-making. If you create corporate scarcity in a truthful, fun, and authentic way, you can help people get closer to that decision and also help them value what you provide even more.

Scarcity Works for Services, Too

Now I can hear you think… sure, this is great, but this only applies to products. I have good news for you! It actually works really well with service businesses for the simple reason that, as a service-based business, you can usually only help so many people. So, you already have an existing scarcity. If you just tell people, your potential customers or clients, "We take on this amount of projects at a time," or "We have a waitlist," all of that is still scarcity.

4 Different Types of Scarcity

Now that you understand the power of scarcity and why it makes sense to apply this to your business, let's answer this question: what are the different varieties that scarcity comes in? Great question, let’s take a deep dive into some scarcity marketing examples.

There are 4 different types of scarcity:

1. Supply Scarcity
2. Demand Scarcity
3. Time Scarcity
4. Limited Edition Scarcity

Let’s talk about each of these, one at a time, along with some good examples of how a service business like yours might be able to take advantage of each one.

Supply-Related Scarcity

When we’re talking about a shortage in the supply for a service business (limited supply), what that usually means is time. But if you're an ecommerce business you may have scarce goods or limited quantities. You may want to work with everybody who comes knocking on your door, but the truth is, you're limited to a finite number of people that you can physically help in a day. All you need to do is make that known. So, you could say, “I only take on five projects at a time.” or “My team only works with 5 or 10 clients at any given time,” and then say, “We do have an opening coming up, we’d love to talk to you to see if we are a good fit for you.”

The beauty is that none of this is manipulative; it’s just the words you’re using that are different, and it's completely authentic. This is how product scarcity works, because as a small business you usually have a limited quantity of items or limited time. You don't need to maintain low prices or purposefully keep a low stock, instead you'll notice that this adds credibility (social proof) as it shows there is a high demand for your services, which is why scarcity marketing works really well. For an online store, supply and demand can play an even bigger role which makes it more important to have a way for customers to get notified when scarce items are back in stock.

What's interesting is that if you use that type of verbiage, it really does change the conversation because now they want to work with you. Why? Because you’ve shown demand for you and your services or your team, but at the same time, you also showcase that exclusivity, so that working with you feels like a win because they got that spot and don’t need to be added to a waitlist. We have helped some of our clients adopt the right type of verbiage for their prospecting, and they have seen results of up to 40% increases in their close rate, so it does work really well.

I’ve seen service businesses actually take this one step further and make their prospects apply to work with them, the idea being that we’re so busy we need to make sure that you’re a good fit for us to make it worth it. But does this actually work? Sure, but there is a fine line to it. Yes, have a little tiny bit of friction, but don’t give them a huge questionnaire right out of the gate. When something feels attainable and we think we have a chance, we’re going to be a little more motivated, but if it's too daunting, you’ll notice that people drop off.

Demand-Related Scarcity

Have you ever noticed how that packed restaurant on the corner made you want to give it a try? That’s demand-related scarcity in action. Social proof plays a big role in marketing, and demand scarcity is one of the more invisible scarcity marketing tactics. It’s like they are silently telling you this is what’s hot right now. With demand-related scarcity, that is showing popularity of some type, and this one is really easy with services, because you can do it in a few different ways. If on your website you have different levels of your service, so different programs or tiers or whatever it might be, you can indicate the most popular or best seller by adding a label on it.

You’ve seen these labels before, the “Popular” or “Best Selling.” And we’ve seen in psychology that people actually really like that as it helps them take that mental shortcut instead of having to think about which option they need to choose. This is a scarcity marketing strategy that a lot of SaaS businesses have adopted.

When you put your top services in the spotlight on your website, it’s not just a flex. It’s you suddenly offering a shortcut to your most popular offer. And guess what, this tactic comes in handy not just on your website, but you could do the same thing in a service proposal. So if you’re creating a proposal and you’re giving options, you can indicate which one is the most popular, so which ones most clients or customers select.

So now that you’re making it easy for your clients to decide, you can actually make it even more of a no-brainer by adding in a little something extra with a limited edition offer.

Limited Edition Scarcity

A limited edition offer is just some type of spin on the original. So with services, it could be that for the holiday season you are doing the special package where if they sign up for this package, they also get the special bonus, whatever that might be, for a short period.

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So this could look like bundling a few services together into one package, like a plumber might put together a “Winterize Your Pipes” offer every fall that includes several services for one all-in price. It could also be a spin or different emphasis on whatever you already offer, so maybe a vet could offer the “Golden Paws Special” where it’s a special check-up aimed at checking senior pets. A tutoring service might offer a “Finals Focus Package,” concentrated student sessions in the final weeks leading up to final exams. Each of these offers is rooted in the everyday services that these businesses provide, but tailored just enough to offer something special and timely, amplifying their appeal.

Time Scarcity

Time-related scarcity is a time restriction of some sort, but it comes in many forms. One of the ways you’ve probably seen this in action is a countdown to an event a business is hosting, where there is a time limit for you to register. It could also be a sale, so maybe you are offering a promotion for a certain time, and all of this is time-related. What happens in that situation is that someone is now competing with the clock.

So just come up with and get the word out about a deal attached to a deadline. It’s the old Black Friday type of deal, and it works for any type of business there is. It does typically rely on some type of discount, which isn’t ideal for every business. If you’re going to do it, be careful. If you do too many promotions or the same promotion too often, you’ll end up devaluing your service, and people will end up waiting for your next deal instead of buying from you when you don’t have a deal or offer, so use this one a little more carefully.

Scarcity for Slow Seasons

Time-related offers work best when you time them to your typical slow or off-peak periods, like a moving company that gives you 20% off during mid-week moves, for example, or a buy 1 room get 1 free house painting special in the slower winter months. But how exactly are you going to get more clients using nothing but your website year-round? We’ve got you covered; book a 1-on-1 Strategy Call with our Marketing Experts, and we’ll take a deep dive into your business & website and give you 3 free tips that you can implement on your website right away, helping you deploy a scarcity marketing strategy for your business.