410.235.7070 Join Our E-Letter
businessGPS Taking You From Where You Are to Where You Want to Go.

Hurry Up and Read this Article Now! Time is ticking...

Hurry Up and Read this Article Now! Time is ticking...

December 28, 2009

How creating urgency can increase your sales

Last month, I talked about how offering less of your product can actually bring you more sales. I stressed one of the most important principles of successful marketing: the more you limit and restrict access to what you have to sell, the greater your sales will be. It may be counter-intuitive, but it works.

Now I want to reveal another critical rule you need to know: the more flexibility you give customers to make a choice, the less likely they are to act.

Like the scarcity approach I outlined in the November issue, this one seems illogical at first. We've all been conditioned to stand on our heads to meet the customer's needs and provide service that goes above and beyond expectations. But we're not talking about customer service here, we're talking about marketing. And when you're talking about marketing, giving the customer too many options means closing too few sales.

It's really just human nature: if we put off a decision, chances are it won't get done. No doubt you've experienced this yourself as a consumer. If you go into a store knowing exactly what you want, it's much easier to make a choice. But if you're not sure exactly what you're looking for, and you have a choice between A and B, the right answer is not necessarily A or B. A new option appears, and that is to delay the decision and seek more information.

When you're a purchaser, that may be the wise choice ' but when you're the seller, you need to do everything you can to keep purchasers from choosing this option!

Create a deadline, and make it short

One of the best ways to get buyers to act is to create a deadline. I remember reading about a research study that scientifically proved the effectiveness of this approach.

The study leaders offered college students a few bucks to take a questionnaire.

Then the students were divided into three groups: one had no deadline for completing the survey, one group was given three weeks to complete it, and the other was given five days.

In group 1, where they were given no deadline, only 25% completed the questionnaire.

In group 2, where the students were given a three week deadline, 42% completed the questionnaire.

In group 3, where the students were given only a five day deadline, 60% completed the questionnaire.

Even the promise of a few bucks ' and I know when I was 19 years old, we'd do just about anything for a few bucks ' was not enough to compel these kids to act when there was no urgency. And this doesn't apply only to poor college kids - it's true for any age group and any situation.

This study also revealed another truth: the more urgency you add, the better the response will be. While a three week deadline produced okay results, the five day deadline produced far better. What if they had asked another group to fill out the survey right then and there? I bet they would have gotten an even higher response.

Urgency can even override price considerations and feasibility considerations. In our businesses, we have seen people make almost impulse buying decisions on purchases over $25,000. It's all because the offer strikes them with a big enough sense of urgency. They feel enough pain that it needs to be healed. And we provide enough cred'ibility, proof of concept and sufficient risk reduc'tion to allow them to make such a purchase.

Think about it: people will never have enough time to achieve and obtain everything they want and desire. Therefore they prioritize and focus on the things that will give them the most pleasure and are most urgent.

If you've correctly identified your hungry fish, you have a good chance that what you're offering will give them pleasure. Now you need to make sure the offer's urgency gets it to the top of the pile.

Get to the A-pile

If you're using direct mail, that means a literal pile. Marketers know that all mail ends up in one of three:

There's the A pile, stuff that will get opened right away. Think a birthday card, an invitation to a friend's party or a letter from the IRS (urgent!).

There's the C pile, otherwise known as the circular file. Most people today sort their mail over a trash can, and throw away 87% of the letters without even opening them.

However, there's a third pile that most people don't know about, what I call the B pile. That's the 'I'll think it over' pile. That is like death. The worst thing in the world, when it comes to marketing, is procras'tination. You've got to move your B-pile mail into the A-pile in order to succeed. You must do everything within your power to overcome the lack of inertia and move a person to action.

You only have 3.5 seconds to get a person to rip open your direct mail piece ' so the outside packaging must convey the urgency clearly.

But getting your letter opened right away isn't enough. Remember the three R's of direct marketing: 'rip it open, read it and respond.'

Once it's open, you must have enough of a compelling concept to get them to read the first headline. The first headline has to get them to read the first sentence. The first sentence must get them to read the first paragraph. And the first para'graph must get them to read the first 50 words. And so on. The entire package ' especially the headline - must create a sense of urgency.

I introduced scarcity and urgency separately, but in practice the two often go hand in hand. In fact, using the two together can produce the best results of all. Here's an example. I once heard a story about a sales experiment conducted at a beef import company. This company sold beef over the phone in a business-to-business environment, selling to food retailers and supermarkets. In the experiment, the company's sales people pitched their product in one of three ways:

Scenario #1. The clients heard a standard sales presentation and were asked to order.

Scenario #2. The customers heard the standard sales presentation and were told that the supply of imported beef was likely to be scarce in the upcoming months.

Scenario #3. The customers were given the standard sales presentation and were told that beef was going to be in short supply in the coming months due to recent severe storms in the Midwest that were interfering with processing.They were also told that the scarcity of beef was insider information given exclusively to them based on their longstanding relationship with the company, and that if they ordered today they could take advantage of a special pre-order arrangement to get them through the coming months.

The result was obvious: Scenario #1, the standard sales pitch continued to produce standard results. Scenario #2, the standard pitch plus the likeliness of a future impending scarcity of beef doubled sales. But Scenario #3, which hit customers with a scarcity-urgency double whammy, resulted in a six-fold increase in sales from those customers.

Some of the best action-driving tactics combine scarcity and urgency. In fact, just about all of the tactics I outlined in the November issue rely on both.

Whether you're limiting the available quantity of the actual product you're selling, the orders you'll accept, or the bonus or premium you're offering, once there is a perceived scarcity, there is also urgency. I've got to take action NOW ' or there won't be one left for me! That's the feeling you want to create in your customers.

This is the perfect time of year for examples of this phenomenon. Every Christmas there's something that all the kids want and none of the parents can find. This year its Zhu Zhu pets, those little stuffed hamsters that ride in little cars (don't ask me, ask a 7 year old).

These things are flying off the shelves and parents are going crazy. Do you think these cheap little toys would be so popular if you could pick one up on every corner? And would parents be so willing buy them as soon as they see them if they weren't so hard to find? Parents and grandparents were scrambling to find them in time for Christmas.

Regardless of what you're offering, there is a way to make the natural human reaction to scarcity and urgency work for you. Think about ways you can add these hot buttons to your offers.

How can you limit availability? Can you add a countdown to a deadline? 'Only 30 widgets left ' and only available for the next three days'; 'Reply by December 30 to make sure you get one of these 100 limited edition collector's items'; 'Beat the 2010 price increases ' renew by the end of the year and save!' All these lines combine scarcity and urgency ' and all of them work.

It's a little bit like playing hard to get -- your customers don't know how badly they want your offer until they think they may not be able to have it.

Scarcity and Urgency Wizard

Remember, you want to limit and restrict access and remove flexibility from the choice. Use this Wizard to brainstorm ways you can do both in your offer.

How can you limit time?

Create a deadline'in hours, days or weeks, whatever makes sense for your offer.

How can you limit the quantity available?

By limiting the available quantity, you increase desirability. What quantity limit makes sense for your offer? This could be in quantity of items available, or the number of orders, reservations, or memberships you'll accept, or bonuses you'll send out. Consider this in combination with a time limit, above, for the best results.

How could you use a 'Nifty 50' with your offer?

What type of upgraded premium makes sense for your offer? Remember to add a deadline, such as a bonus for the first 50 to respond by midnight, for urgency.

How can you limit access to your product?

Can you create levels for customer access or membership (i.e. silver, gold, platinum)? Remember to tighten access at each level as the price increases.