Interested in boosting customer desire? A classic study that demonstrates the psychology of scarcity reveals an interesting quirk of human behavior that may hold a clue.
In 1975, researchers Worchel, Lee, and Adewole wanted to know how people would value cookies in two identical glass jars. One jar held ten cookies while the other contained just two stragglers. Which cookies would people value more?
Though the cookies and jars were identical, participants valued the ones in the near-empty jar more highly. Scarcity had somehow affected their perception of value.
There are many theories as to why this was the case. For one, scarcity may signal something about the product. If there are less of an item, the thinking goes, it might be because other people know something you don’t. Namely, the cookies in the almost empty jar are the num-numier choice.
It’s About Context
Classical economic theory starts with two key assumptions: First, consumers are armed with “perfect information.” Second, people behave rationally. However, in the real world, these two conditions are more the exception than the rule. In fact, marketers do their best to trigger cognitive quirks, like the scarcity heuristic, to influence behavior.
Even though it may make no objective difference regarding what is actually being sold, marketers know context matters just as much as the product itself. The near-empty jar with just two cookies left in it conveys valuable (albeit irrelevant) information.
For another example of the importance of context, consider what happened when the world-class violinist Joshua Bell decided to play a free impromptu concert in the Washington, DC subway. Bell regularly sells-out venues like the Kennedy Center and Carnegie Hall for hundreds of dollars per ticket. But placed in the context of the DC subway, his music fell upon deaf ears. Almost nobody knew they were walking past one of the most talented musicians in the world.
When Bell gave away his concert for free, few stopped to listen. But when he charges beaucoup bucks, his music becomes a rarefied commodity and thousands of people pay-up.
Can the same principles of scarcity and context make technology products more desirable? You bet your sweet cookies they can!
The Slow Roll
In its early days, Facebook was only available to Harvard students. Then, the service rolled-out to the Ivy League. Soon, Facebook was made available to college students nationwide. Then came high school kids and later employees at select companies. Finally, in September of 2006, Facebook was opened to the world.
Today, Facebook is used by over a billion people but its early invitees were among a small exclusive group. As the service grew in popularity, others wanted in too.
Though it ultimately worked to his advantage, it is unclear if Zuck knew what he was doing. In a vintage video, the Facebook founder described his intent to keep the service just for college kids. We will never know if Facebook’s scarcity strategy was intentional or not, but the fact remains, it worked. The buzz soon grew about the social network made by, and only available to, Ivy kids.
When scarcity is a feature, as was the case for early Facebook converts, the service’s limited access increased its appeal.
Today, Quibb, an online discussion board frequented by a select cadre of tech professionals and entrepreneurs, provides a more recent example of the scarcity heuristic at work.
Quibb is curated by its founder Sandi MacPherson who personally decides who gets in and who stays out. MacPherson turns away far more people than she accepts and getting her approval is equivalent to getting past the velvet rope of an exclusive night club. That is, if the nightclub were full of tech geeks.
“When it comes to professional content, I believe that it actually matters who you are,” MacPherson wrote in an email interview. MacPherson says she did not build Quibb to be a big company — although it might end up being one some day. Her intent was to create a place for people she thinks are interesting to communicate with one another — MacPherson gets the satisfaction of listening-in.
MacPherson set out to filter out the noise of open communities like Hacker News and Reddit by only letting select people join the community. For Quibb members, the scarcity of the invites MacPherson doles-out is a virtue of the service.
Scarcity Gone Wrong
Facebook and Quibb provide examples of how exclusivity can increase appeal. But earlier this year two companies showed how scarcity can backfire.
Mailbox and Tempo, both iOS productivity apps, released their services to small groups of users. If you were not at the front of the line, you had to wait for an indefinite period of time. The only condolences when you opened either app was to see how many people were ahead of you in the queue — only 21,000 people to go and you’re in!
Mailbox’s attempt at damage control came in the form of a blog post explaining their roll out plans. At the center of the plea for patience was what appeared to be a hand-drawn yellow post-it note. As if sketched in the nick of time to placate the angry mobs, an exponential curve showed that soon, the company would accept many more users. But unlike in the case of Facebook, frustrated customers punished Mailbox for the wait. They trashed the app by writing poor reviews despite never having actually used it.
As for Tempo, CEO Raj Singh said his app’s waitlist was a response to its unexpected popularity. In an email interview Singh wrote, “We mis-estimated demand for Tempo by 24X.” Expressing his regret, Singh continued, “There may have been some velvet rope effect but trust me, that was absolutely not the intention…We probably lost ~100K registered users as a result of the line.”
So why the difference in the response to Facebook versus Tempo or Mailbox? For one, it’s not clear things turned out all that bad. After all, Mailbox was snatched up by Dropbox in a rumoured $100 million acquisition and Tempo just raised a respectable wad of cash.
Nonetheless, as these examples show, scarcity made some people lust, while making others livid. But why? Here again, the 1975 cookie jar study provides some clues.
In the second part of their experiment, Worschel, Lee, and Adewole wanted to know what would happen to the perception of the value of cookies if they suddenly became scarce or abundant.
Groups of study participants were given either jars with two cookies or ten. Then, the people in the group with ten cookies suddenly had eight taken away. Conversely, those with only two cookies had eight new cookies added to their jars. How would the changes affect the way participants valued the cookies?
The researchers showed that consistent with the scarcity heuristic, the group left with only two cookies, rated them to be more valuable. However, those who got more cookies, experiencing sudden abundance by going from two to ten, actually valued the cookies the least. In fact, they valued the cookies even lower than those people who had started with ten cookies to begin with.
The study showed that a product can decrease in perceived value if it starts off as scarce then becomes abundant. Sound familiar? Take a look at the Mailbox post-it note graph again, that is exactly what the graph shows.
Doing it Right
To potential users, Mailbox and Tempo’s scarcity backfired, at least in the short-term. Attempts to placate users by telling them about the technical limitations of “load testing,” obviously didn’t cut it. Instead, the message received was akin to, “this is going out to the cool kids now and the rest of you plebs, well, we’ll see.”
In contrast, Facebook and Quibb never made any appeals for patience or promises of expanding to the masses. Their products started-out as scarce and the founders closely guarded the perception that they will remain so. When asked about his expansion plans past Harvard, Zuckerberg says, “There doesn’t necessarily have to be more.”
Of course, there was much, much more. Young Zuck masterfully explained Facebook’s small footprint at the time as a necessity to providing the level of service he wants to give his users, typifying the lesson that for scarcity to increase perceived value, it must be a feature of the product, not a bug.
Top Consumer Psychology Articles
- Can We Regulate Social Networks To Curb Addiction—Without Making Them Suck?
- So, You Want To Become a Great Product Manager? [Q&A with Jackie Bavaro]
- Will Clubhouse be a Habit or Has-Been?
- The One Fitness App That Hooked Me For Good
- Here’s How Fortnite ‘Hooked’ Millions
- How Apps Can Shape Your Future Self
- How Netflix’s Customer Obsession Created a Customer Obsession
- Want to Design User Behavior? Pass the ‘Regret Test’ First
- How to Trigger Product Usage that Sticks
- How to Get People to Help Each Other, Online and Off
- Here’s How Amazon’s Alexa Hooks You
- How to Use Psychology to Make Persuasive Video
- How to Use Personality Science to Drive Online Conversions
- The Unbelievable Future of Habit-Forming Technology
- The Secret Marketing Power of Evolutionary Psychology
- Don’t Ask People What They Want, Watch What They Do
- How Cognitive Biases Can Help (and Hurt) Your Business
- What Most People Don’t Know About Behavioral Design
- How to Start a Career in Behavioral Design
- Your World is Full of Placebo Buttons (and That’s a Good Thing)
- How to Build Technology that Feels Like a Friend
- 3 Pillars of the Most Successful Tech Products
- Here’s How to Ethically Manipulate Other People
- How Two Companies Hooked Customers On Products They Rarely Use
- How to Hook Users in 3 Steps: An Intro to Habit Testing
- Die Dashboards, Die! Why Conversations Will Reinvent Software
- The Secret to Sending Emails and Notifications That Work
- How to Win Your Competition’s Customers
- Hooked for Good: How Habit-Forming Products Improve Lives
- Good Products Start With Good Questions
- Human + A.I. = Your Digital Future
- Why ‘Assistant-As-App’ Might Be the Next Big Tech Trend
- People Don’t Want Something Truly New, They Want the Familiar Done Differently.
- 4 Ways to Win Your Competitor’s Customer Habits (Slides)
- Here’s Why You’ll Hate the Apple Watch (and the Important Business Lesson You Need to Know)
- The Secret Psychology of Snapchat
- The Psychology of Notifications: How to Send Triggers that Work
- How Technology Tricks You Into Tipping More
- Building Community Starts with Understanding People
- When Persuasion Becomes Deception
- Mastering Pricing Principles
- A Handy Behavioral Design Toolkit
- Onboarding Matters – Getting Users Engaged in your Product
- The Limits of Loyalty: When Habits Change, You’re Toast
- Dual Process Theory: Is Your Product the Elephant or the Rider?
- 4 Ways to Use Psychology to Win Your Competition’s Customers
- Web Psychology – The Science of Online Persuasion
- Developing User Empathy with Design Sprints
- The Real Reason “Stupid” Startups Raise So Much Money
- Understanding the Psychology Behind Game Design
- The Psychology Behind Why We Can’t Stop Messaging
- How to Do Effective User Research
- Context Driven Design (The “Context Effect”)
- The Psychology of a Billion-Dollar Enterprise App: Why is Slack so Habit-Forming?
- Writing Copy for Your Reader’s Brain
- Designing Habit-Forming Products
- Framing Reward is as Important as Reward Itself
- Games, Play, and Motivation
- How Scarcity & Impatience Drive Irrational User Behavior
- Should You Listen To Your Users or Your Data?
- Emotional Engagement – Designing with the Heart in Mind
- A Free Course on User Behavior
- It’s Not All Fun And Games: The Pros and Cons of Gamification at Work
- Product Psychology: The 3 Things Everyone Should Know About
- Getting Traction: How to Hook New Users
- Designing for Behavior Change Book Review
- The Sneaky Trick Behind the Explosive Growth of the Kardashian Game
- How Successful Companies Design for Users’ Multi-Device Lives
- The Link Between Habits and User Satisfaction
- What Triggers The Best Word of Mouth Marketing?
- What Tech Companies Can Learn from Rehab
- The Secrets of Addictive Online Auctions
- Teach or Hook? What’s the Real Goal of Online Education?
- Using Mind Control to Raise Startup Cash
- How To Build Habits In A Multi-Device World
- How To Cope with Your Insane Jealousy Of The WhatsApp Deal
- Why Do Fads Fade? The Inevitable Death Of Flappy Bird
- You’d Be Surprised By What Really Motivates Users
- Nostalgia: A Product Designer’s Secret Weapon
- How You Can Help Users Change Habits
- Is “Lean Startup” Right for Your Idea?
- Hunting for Habits: Keying in on smart design to make a product irresistible
- Are Companies Too Obsessed With Growth? How to Measure Habits
- Refresh: The App a Secret Agent Would Love
- Angel or Devil: Who’s Really Investing In Your Start-Up?
- In 10 Years, We Won’t Use Personal Technology
- 4 Simple Things I Did to Control My Bad Tech Habits
- “Yes, And”: The Two Words that Created a #1 App
- From Laid to Paid: How Tinder Set Fire to Online Dating
- What if In-App Purchases Came to Real Life?
- Hooking Users One Snapchat at a Time
- How To Save Your Startup From The “Spotlight Effect”
- Bible App: Getting 100 Million Downloads is More Psychology Than Miracles
- How to Boost Desire Using the Psychology of Scarcity
- Marketplaces & The Curse of the Network Effect
- Today’s Behaviors, Tomorrow’s Startups
- Venture Capital and The Superstitious Investor
- The Future is Driven by Interface Changes
- Why Business is Addicted to Habits
- Viral Loops Or Viral ‘Oops’?
- Making a Marketplace
- What Killed Turntable.fm?
- What You Don’t Know About Human Intuition Can Hurt You
- Designing to Reward our Tribal Sides
- New Video – “Hooked: Building Habit-Forming Products”
- How Technology is Like Bug Sex
- Ways To Get People To Do Things They Don’t Want To Do
- The Network Effect Isn’t Good Enough
- Mass Persuasion, One User At A Time
- How Investment Drives Engagement (Slides)
- Getting Your Product Into the Habit Zone
- Where Have The Users Gone?
- Infinite Scroll: The Web’s Slot Machine
- Designing User Habits Video
- Psychology of Sports: How Sports Infect Your Brain
- This is Your Brain On Boarding: How to Turn Visitors Into Users
- User Investment: Make Your Users Do the Work
- Behavior by Design Video
- When Designing for Good Is Bad
- Stop Building Apps, Start Building User Behaviors
- The Next Secrets of the Internet
- User Growth and Engagement: A Hacker Metric
- Spotting the Next Facebook: Why Emotions are Big Business
- The Billion Dollar Mind Trick: An Intro to Triggers
- Why Everyone Hates I.T. People
- Hooking Users In 3 Steps: An Intro to Habit Testing
- Abolish The Reference Check
- Variable Rewards: Want To Hook Users? Drive Them Crazy
- How to Design Behavior (The Behavior Change Matrix)
- How To Design For “Normals”
- The Hook Model: How to Manufacture Desire in 4 Steps
- User Habits: Why Startups Must Be Behavior Experts
- What Is, and Is Not, Your Product’s Job
- Pinterest’s Obvious Secret
- Personalized eCommerce Is Already Here, You Just Don’t Recognize It
- Where is the Web Going?
- The Developer Divide: When Great Companies Can’t Hire
- Being a Quitter Makes You a Good Entrepreneur
- Behavior by Design
- Why You Should Run Your Business Barefoot
- Are you a Startup Star, Wacko, or Wannabe?