artificial scarcity principle

How Artificial Scarcity Can Boost Desire

This article is directly adapted from Ankur Nagpal’s talk at GrowHack NYC. Ankur is the largest individual developer in the history of the Facebook platform, with over 10,000 applications and a reach of upwards of 200M non-unique users.

This article goes into one of Ankur’s 7 favorite growth hacks. An in depth version of the talk which goes into all 7 is available as an online class on GrowHack Learn for $9. Limited on time? Flip through the entire deck below.

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One of the easiest ways to increase the value of anything is by making it scarce. What if the action or gift you want to promote is abundant?

Simple – manufacture scarcity.

A few years ago, I ran a virtual gifting application on Facebook. You sent your friends a “gift” – which in reality was no more than a pretty picture and a Facebook invitation.

In a quest to make the application viral, I wanted people to start sending their friends more gifts. So I changed the primary call to action from:

Send All Your Friends a Hug.

to

You Can Only Send 20 More Hugs Today.

Can you guess what happened next?

The percentage of people sending hugs did not budge – if you thought sending hugs on Facebook was stupid, the artificial limit did not change a thing.

But..the people that did send hugs started sending a lot more. In fact, a lot of them were now even hitting the artificial limit I had imposed.

Isn’t it cool how powerful an artificial limit can be on human behavior?

Limited edition collectibles. Gmail’s invite system. The guy you like that plays hard to get. Startups being in “closed beta”.  TV Infomercials. Artificial scarcity is everywhere.

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But for my favorite artificial scarcity anecdote..let’s go back to the wild world of social games.

An unnamed friend of mine ran a social game that monetized via in-game purchases. He decided to try something similar with monetization running a big headline saying:

“Since we are trying to keep fraud in check, you can only spend $10 a day”

There was even a progress bar for good measure.

However, my friend was lazy. He never quite got around to writing code that prevented users from spending more than $10.

What happened next was amazing.

People slowly started realizing they could spend more than $10.

Except this time, they were beating the system. They discovered a “glitch” in the game that let them spend UNLIMITED MONEY.

A few days of record revenue later fueled by some very large individual purchases, he turned it off.

The human mind is ridiculous.

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How have you seen artificial scarcity employed? The below deck goes into artificial scarcity, as well as 6 other favorite hacks that I used on Facebook.

Leave a comment below and let me know what you think or find me on Twitter.

 

Comments on this entry are closed.

  • http://raymondduke.com/ Raymond Duke

    Interesting. I’ve already thought of how to apply this to my project before reading this, but I may fine tune what I had in mind just a little bit more now. Thanks.

  • François Grante

    Brilliant !

  • http://www.fspina.com/ Fspina

    wow!

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