Selling yourself short? The business owners paradox

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Pricing your products or services well is important for business sustainability. What happens when you lower your standards or sell yourself short just to get to your markets? Well, you get to your markets alright, but you don’t leave a lasting impact on them.

Take the example of a nightclub owner about to launch his first club in town. Nobody knows about it yet, and so he fears there wont be enough attention. The better the launch, the more successful the club will be in that part of town. To create a good launch, he may have to come up with clever group discount packages, sell drinks at a cheaper rate, he may even resort to giving away free tickets to everyone. All of this for the hope of attracting larger crowds and creating excitement. Hope. This may seem like a perfectly reasonable approach to marketing, and it is. But, if he can create a larger buzz, without having to lose out on potential $$, why shouldn’t he? After all, a high impact launch results in lasting memories and a consistent traffic flow thereafter.

The question is, can his approach ever generate scarcity? Can it ever generate exclusivity? Aren’t both of these important factors in the success of a nightclub? In the fear of having an “empty club” launch - where nobody wants to enter, the owner sells himself short. All he really needed to do was understand what would make his potential customers pay BIG $$$ and cue in line for: It may be an attractive crowd. It may be seeing the excitement and buzz. It may be interesting stories. It may be the thrill of anticipation. It may the chance to meet successful people. It may be a combination of all of these.

One solution for this is to throw parties with modeling agencies during launch to get the attractive crowd at the venue. Next, you could get people to cue up to create an illusion of scarcity. If you can artificially create an environment conducive to what your market perceives as “popular”, you can kick-start your club from nothing to being the hottest in a matter of days.

Translate all of this to the online world and your options increase considerably. Here are a few gorilla marketing steps I’d recommend (I’ll write a more detailed example of this in another post)

1- Target the early adopters.

2- Get them excited about the event.

3- Get them to bring their networks to the event. Frequent customers would stay with you for years.

4- Build a community. Treat them royally. Let them spread good things about you through WOM.

5- Use online social media tools to share this excitement with other untapped potential customers. Let this excitement sell itself.

Creating scarcity in tickets and merchandising

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I am sure you have heard about how marketers often play with certain emotional triggers to entice people to act quickly. You can use the same principles of scarcity when selling tickets and merchandising to your audiences. Creating scarcity implies restricting the supply of the things that you are selling to create a perception of shortage. This becomes even more effective if it is bundled up with a promotional offer, such as a discount or bonuses.

Some people are indecisive or slow about making their decisions and often end up being too late. Scarcity puts them in a spot where they become more inclined to jumping for it rather than “thinking about it later”.

If they are on your lists, they already are interested in your services. Give them a great offer for a limited time and they might say “heck, why not”.

I have even used scarcity for high demand markets by increasing the prices up by 25%. This happened in an “open theater concert” that we were planning a few years back on the East Coast. It was going to be the first concert of that summer and people were already looking forward to it. Regardless of the prices, we would have sold a total number of 980 tickets for 980 seats. We decided to play with the scarcity approach to increase the prices up 25% from our usual rates for a limited time short supply. This trigger helped us sell all of our tickets in a record time and earn 25% more than we usually do from such events.