Loyalty programs aren't just a designated channel for brands to offer personalized rewards and incentives to repeat customers. They’re also a strong platform for exercising consumer psychology principles. Scarcity marketing is a tool for encouraging urgency in consumers. Together, the two powerhouse marketing strategies help build brand loyalty — and fast.
Consumer psychology promotes action, and one of the biggest examples of this lies in scarcity marketing. Brands often use scarcity marketing to drive hype around their products and maintain that demand going forward.
Scarcity marketing is not uncommon, mostly because of its ability to immediately motivate consumers. But for it to work in a way that serves your customers, you need to focus on using it in ways that are relevant to each individual it's reaching.
Humans are known for wanting what they can’t have. When something is low in supply, its scarcity leads people to believe that it must be an item worth having, and the perceived value of it increases. Brands use this thinking to promote urgency around their products, but scarcity can also be used to drive more mobile app downloads and engagement.
