My friend was so excited to tell me about seeing The Who in concert this week! “I had to go. I’ve heard this is their last tour date in Los Angeles – we will never get to see them again!”
This week was also a big week for fast food. The McRib returned to McDonald’s on Monday. “the mcrib is coming back 10.31 but this is its farewell tour” according to a recent McDonald’s tweet.
- The Who’s first “Farewell Tour” was announced by the Who in 1982 – 40 years ago!
- The McRib’s first “Farewell Tour” was announced by McDonald’s in 2005
Yes, one could call it false advertising. But, in the revenue generation world it is really more akin to false or artificial scarcity – the creation of scarcity where none really exists.
Scarcity is a powerful catalyst to purchase. It stimulates demand. If the average consumer (or B2B purchaser) thinks that a product or service is in limited supply, or going away forever, they are more prone to make the purchase – and more likely make that purchase at higher than usual prices.
Does scarcity work? Well, the best seats for the Who regularly sold for well over $1000 each in 2022 and during the 2011 McRib Farewell tour, overall monthly sales at McDonald’s in the United States increased 4.8% as a result.
I am reminded of how a few years ago we created scarcity for one of my clients and dramatically increased revenues as a result. They are a B2B manufacturer of grip and lighting equipment. Much of the equipment uses steel and aluminum.
When then President Trump announced his program of tariffs, panic set into the company’s executive team as they speculated what the tariffs might do to their cost of raw materials. We all quickly realized that a similar panic would also afflict their customers as they anticipated seeing their price of finished goods rise as a result.
An external event that people expected to happen – tariffs – was creating a seemingly very real perception of scarcity in the marketplace.
So, we created a pre-tariff sale.
For a limited amount of time, customers were able to order as much full-price grip and lighting equipment as they wanted, and we guaranteed availability for them at the pre-tariff price.
The result – the company’s largest “sale” in years. All products at full price. All because we took advantage of an opportunity for scarcity in the market.
Scarcity works. And it can work for you. What opportunities for scarcity do you have in your business?