Trader Joe’s and The Use of Scarcity in Selling

"Scarcity equals value. It's why diamonds are expensive."

Have you ever browsed a software review site or a vendor’s pricing page, not with the intention of buying, but just to look at a tool you might be interested in? We do it more often than we realize. This happened to me once as I was considering a new project management platform. I saw a plan that caught my eye, a simple mid-tier package with the features I wanted; I liked the layout and I liked the price point, so I simply thought “one day that might be nice to have.” I went back to the pricing page a week later and didn’t see that plan, so I reached out to the sales rep about it. He replied that it was a discontinued tier and that the newer plans would not include that exact feature set, but he said they might be able to grandfather me in if I acted soon. At this point, I went from “I’d like to look into this,” to “sign me up today.” He did have room to grandfather me in, and I purchased it immediately.

We need to use this same concept in selling, the concept of scarcity. The less of something there is, the more valuable it is perceived to be.

Trader Joe’s grocery stores use this to great effect. TJ’s has the highest rate in the industry of multiple “same product” purchases. The store is ruthless about discontinuing products, creating a “get it while it’s here” effect. Anytime people see that block of Gouda that they love, they’re buying three or four of them because it may not be there again.

This is a simple and powerful concept to apply to selling anything.

Scarcity equals value. It is why the Hope diamond is expensive, why it’s cool if Brad Pitt walks into your restaurant and even cooler if he sits at the table immediately next to you. Your product may not be one of a kind, but you can create a situation where the opportunity is.