Limited-time offers are a powerful marketing tool with the ability to grow your business by creating a sense of urgency and exclusivity that catches the eye of consumers who do not want to miss a potentially rewarding opportunity. Limited-time offers, along with limited quantity and limited editions, push people to say "yes" to offers with less procrastination.
Studies show that the psychological influence of limited-time only offers is very real. In a University of Nebraska study, researchers found that perceived scarcity is a trigger for consumer competitiveness, impulse purchases, and even in-store hiding and hoarding. In conclusion, the study found that "Promoting product scarcity within the store could be advantageous as by deliberately controlling the supply of the product, retailers can successfully create anticipated regret in the consumer's mind, which can then be used to motivate him/her to exhibit behaviors like urgency to buy."
Another study by marketing analytics company WhichTestWon found that when a countdown timer was placed on a product page, 9% more sales conversions were earned. Furthermore, HubSpot did a live experiment at a summit event in which they offered a special report on integrating emails as both a “limited offer” and as a “standard offer.” What they found is that offering the report as a "2-day limited-time offer" produced 8% more downloads than offering the document without the tagline of “limited availability.”
"Limited-time offers create excitement, they generate buzz, and people know that they are only there for a short period of time," restaurant industry analyst Bonnie Riggs of NPD Group told CNBC, "so they want to get them before they are no longer available."
However, don't think you can just slap on the "limited" tag and people will respond; there is more to the process. Therefore, when putting together a limited offer consider the following:
- People attracted to limited-time offers are more than likely a part of the "experience economy" dominated by millennials. According to Eventbrite, 78% of millennials would rather buy an experience than a product, and they spend $600 billion a year, according to Forbes, which is 28% of consumer spending. This means that even if you offer a consumer product, the focus should be on the experience it will provide.
- Stay away from generic calls to action like "While Supplies Last" or "Act Now." A clear timeline is required to inspire consumers, so use "Last Day," "One Day Only," or "Ends at Noon on Friday."
- Messages should be brief and create more excitement through details like "Claim Your Free Jewelry," "Get 50% off Your Next Visit," or "Buy One, Get One Free."
- Finally, do not lose the trust of your consumer base or prospects by being dishonest. If visitors return in a week to find your "limited offer" is still available, the chances are higher that you lose that customer.
While limited time offers are a great growth marketing strategy, using them sparingly and honestly is paramount. When you create excitement, people will act fast and your conversions and sales will benefit.