Profiting from the fundamentals of Group Buying: part 3… Scarcity

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A key tactic more often employed by Flash Sale sites than Group Buying sites is scarcity, but there is more to this tactic that meets the eye.image

Stock limitations can be a condition, i.e. we really only have 200 available in our warehouse, however setting a stock limit can be a very effective tactic to drive up sales, this is the Scarcity Game Mechanic. To set an appropriate limit, forecast the likely sell through of a particular item, then set a stock limit that is 10 – 15% higher than that forecast, the Scarcity Game Mechanic if played right will ensure the limit is reached and your forecast is exceeded. image

To illicit the right response, the shopper has to feel some sense of urgency due to the stress that comes from missing out, clearly this is less effective in the early phase of the sale but that’s ok given the forecast amount would have been reached on its own. Having a genuine countdown display is key, either literal or abstract, regardless though it has to be genuine, once the limit is reached the item is “Sold Out”, it’s tempting to find and release more stock however once this occurs, the scarcity mechanism will be discredited for good. imagePromoting the Stock Limit though display advertising or EDM is also good, however the level of promotion provided has to be proportionate to the Stock available. Lastly, if a Consumer comes to the site after the limit has been reached, this is a great time to reinforce the “don’t miss out next time, be first to know with our SMS program” or similar engagement/re-targeting program.

Twitter hash-tags have lost their mojo.

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I spoke at iStrategy some time back in Melbourne and was blown away by the level of engagement from the Audience via Twitter, by far the most hash-tagged tweets I have ever seen. My iPad twitter ap was alive the entire time I was speaking with real time commentary about my presentation, can’t beat good-honest real-time feedback!

Only, it wasn’t.

I felt the entire time that Twitter and particularly the use of a hash-tag had lost its mojo. Previous when I have been speaking there has been a real balance to the Twitter feedback, some great, some not so great, and some just plain old brutal. But not this time. In fact, I don’t think there was a single tweet that could be euphemised as “brutally honest”. I suspect the medium is just too prolific.

In a conference of the size of iStrategy, which numbered around 300 delegates, there’s nowhere to hide and worse still there is a very good chance that the speaker you have just appraised will know what was said and by whom. And no one wants a possible confrontation!

As a speaker at the conference I wanted that brutal feedback, and I was looking for it real time to make adjustments to my session. But it didn’t come. I’d appreciate any suggestion that my talk was perfect, however I saw some sessions that were quite poor yet no negative tweets emerged!

I think we need to bring some anonymity back to twitter, at least find some other way to harvest the ugliest of commentary. Or accept that feedback is a gift, good, bad or ugly!

Will email communication really go the way of snail mail?

I clearly do have strong views ont he subject! As does the ABS who report that only 80% of 17 – 24’s actually have an email address.

Music Media and Madness's avatarMusicMediaMadness.com

As part of the “Get Schmart” 2012 Marketing Conference Billy Tucker, owner of data consultancy 57 Signals, believes that email will increasingly become a redundant form of communication in the retail world. Despite the incredible penetration of email in our society Billy believes that the under twenties demographic are increasingly using social media as their preferred platform of communication. As he puts it “If you’re in the email business, reaching that audience is going to be hard and getting harder.”  Find out more by watching the video below and checking out more on the website www.getschmart.com.au

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