> 31.1% more people said they would buy in one experiment
As has been shown countless times in both theory and practice, this metric is useless. People are very liberal in saying the would buy things, support causes, etc. The actual number of people who do buy is completely unrelated to this say-they-would-buy metric. Similarly, having people who say they would buy your startup's product is worth nil. The only customers that count are the actual customers, the ones that do buy.
Sold out is very frustrating if it was my first choice. Usually it means I'll go with my second choice (sometimes a competitor's product) because often I cannot wait till the item is re-stocked. Other times if it's more an impulse item, it means I get 'cool down' time and realize I don't actually need it and forgo the purchase.
Agreed. Its incredibly rare that I've waited to buy a sold-out item. I either buy a competitors, or I lose interest and decide I don't care enough. I can't actually think of a case, off hand, where I did wait, although I'm sure its happened at some point.
I either want the thing at that time point, in which case I will look for an alternative because waiting won't get me the thing at that time point, or if its not important enough or I don't want it enough to want it right away, then I don't buy and usually I either get less interested as I wait, priorities shift or I just forget about it.
For example, a PS5: I would have bought one on release, if I could have. Had the money set aside for it. But I couldn't get one and about two months later, I lost interest, cancelled my reservation and spent the money on something else and have decided there are other things I want more before I get one, such as a new guitar. Maybe in a few years I'll get one. Maybe. If I can get one cheap.
I especially hate it when they don't have a single item (eg. a pair of socks), but they have a "3-pack", and when the item arrives, it's actually three individual single packs, that they didn't want to sell separately.
Luckily the internet is a big place, and it's easy to run experiments where you show half the people one version of the site and half the people the other version, and see who buys more.
Yes, most "Would" questions are absolutely worthless:
> "Finally, the word “would” taps into a special place in people’s minds. At the end of the day people are optimistic. I’m sure of it! Think of the most negative person you know and ask them “would you like to be healthier?” They will say “Yes” and then come up with a bunch of reasons they’re not."
It’s a bad metric if you are trying to quantify a market. It’s a good metric here, where he is comparing options. In this case actual conversion rate (between people that say they would, and those that actually would) doesn’t matter, and there is no reason to believe it would vary significantly between the two options.
So provided the sample size is big enough I think it’s a perfectly valid metric.
I don't really follow your assumptions; surely it might be that the same people influenced by this are also people who would never have converted or always have converted? In which case the measured effect is not relevant to any actual business decision?
My bad I have clarified my comment, this was confusing. By conversion rate I was talking about the ratio between people that say they would buy, and people that would actually buy. I’m sure there is a better term for that.
Reminds me of Rob Fitzpatrick's customer development talks: ask a potential customer if they would buy your product and they're all positive yes, definitely. Go, ok, lets do it, whip out a credit card machine and listen to all the excuses they come up with why they can't do it right now.
A credit card machine! I remember those - you secure the card under a clip, put carbon paper form on top, run a little roller on a track across... I can still hear the sound it made in my head, would recognize it instantly if I heard it across a room. Nostalgia.
I actually was thinking of one of those little devices that talks to your phone over bluetooth when I wrote that, but I actually remember the carbon paper ones too! Used to use one when I worked as a street trader (jewelery stall in a touristy part of town) as a student.
I'm all for content marketing but this article is sprinkled with sales-pitches and calls to action for OP's own stuff he sells. I feel like one needs to have ADD in order to make it to the end of it.
This may not be lying but it is definitely icky. I would not feel good about being manipulated this way. Proponents of tactics like this are not good people.
Yeah. Seems like a really speculative benefit to squander goodwill over. I already have a pretty strong knee-jerk reaction to going-fast | limited-quantity-remaining | zomg-hundreds-of-other-people-are-looking-at-this manipulations. Guess I need to add sold-out to my list of smells.
The problem is that the effect only works if my preferred option is still available.
Example 1: Only my size is in stock. I will try to order quickly. I'm fortunate that noone with my size shopped before.
Example 2: I click on an item, and see that one color is out of stock. I get the impression that these colors must be most popular and only "bad" colors are left. I am disappointed and might end up not buying at all. If I hadn't seen the out of stock colors I would have felt better about the available colors.
It's all a perception game. Perceived value seems to reign over all else in terms of today's markets. Utility is looked at less and less these days, so you certainly have to think about perception in different contexts, as you point out.
All this FOMO, "going soon", "few left" and that sort of nonsense relies on what people think. Do they think there's a good opportunity they're passing up, do they think others know more about the future than they do, do they assume others choices are the better choices.
I like to try random international drinks at a local international market, just for fun. I often go in and look at the shelf. I have no or little information and frankly can't even read the labels sometimes aside from ingredients (I don't even really know what I'm supposedly buying), so all the marketing propoganda they can put on the can in the world is ineffective unless it just happens to pick up on something that transcends culture and language and appeals to me. What I actually do is look at inventory: which of these drinks clearly has less on the shelf. It's certainly flawed (could be a matter of poorly restocking the shelf or an inventory shortage cause by something unrelated to demand), but it usually gives me pretty good and interesting drinks to try (I'm happy with random as well). I assume the market knows better than me because I don't have good information to make my own decision, I try to copy other decisions instead which I assume are more informed.
On the other hand, when I go into a shop about something I'm highly knowledgeable of, say consumer electronics, looking for a specific item shortage on a shelf does almost nothing to me. I'm informed and knowledgeable, so I don't care what the market thinks, I think (and often do) know better than the market.
The key difference is knowledge and independent informed decision making ability. This is where perceived value starts to peel away and I'm less influenced by propoganda or demand signals. I know what I want, I know what I need, and I therefore go for it. Alternatives are ignored unless I have fewer options and then I can analyze the options fairly objectively to meet my personal needs/wants.
We have markets with consumers that are becoming less and less informed about specific sectors and lack good decision making for themselves. In some cases, the knowledge barrier is too high and they have to outsource expertise for advise or follow demand signals. In other cases, time pressures push people to follow low hanging decisions influenced by demand signals. Perceived value is becoming far more influential in a lot of purchasing decisions for consumers. We need more informed and critical consumers to avoid these issues. We often instead have markets where it seems perception hits enough people susceptible to these strategies where a critical mass forms, then it sort of cascades down to people with less and less degrees of susceptibility to demand perception signals where they question their own decisions and also cave.
There does seem to be a cut off point where people just look at the market, shake their head, and ignore demand signals. In consumer markets this works fine for them (at least in the short term, the mass can dictate consumer market direction that provides less good options for subsets of consumers). In markets like stocks, it's a bit different because perception often matters--its not just actual value or future value, it's what everyone else thinks the value is, especially for short term investments (the whole, "the market can stay irrational longer than you can stay solvent" dogma). A good case of this are some of the "meme" stocks during the pandemic where valuations made almost no sense but the market spoke through perceived value and culture (and to be fair, these were slightly more nuanced complex issues with the whole short squeeze perception play going on).
This reminds me of the thing where most television ads used to say "Please call now! Our operators are waiting" and then someone changed that to say "Please call again if all operators are busy" or whatever. Only a few words changed, but it got a lot more conversions!
The one that really annoys me is when they do this for airline tickets.
Airlines release tickets for a flight in batches of 10, which is why you never see a "only x seats left" message where x is greater than 10. Once all 10 are sold, the next bucket of 10 are released at a new price depending on the demand of the previous 10. (I'm sure there's more to it than this, been a little while since I worked in the industry but that's the gist of it).
There's already existing regulations around purchasing flights (in the US). For instance on a flight results page after searching, you have to show the full price with fees, you can't just show the ticket price. I feel like it can't be that hard to regulate the "x seats left" messages too.
> you have to show the full price with fees, you can't just show the ticket price
The most ridiculous consequence of that is that Ryan Air started charging for cabin luggage. So they show the "full price", but only in the end you realise that you have to pay extra to take a small suitcase with you (which is included on every other airline...).
Do you know what is even more annoying? Travel companies do not care who is buying the tickets. I know people working in the sector and they get notices exactly when the first tickets are released. It is like an unofficial part of the benefits. In EU this is very close to tax evasion.
> This has been forbidden by the EU in the context of hotel rooms (booking.com)
I've worked for two hotel booking companies and as far as I remember, it is not outright banned. It is just that it requires to be truthful and specific. So for example, if you wouldn't be able to say that a room was recently sold out, but you could say that it was recently sold out on YOUR website, possibly even which specific room type that was sold out. Etc.
This was some 2-3 years ago and it varied based on country the current hotel/user was in as well.
You would be surprised how much of what you see today was pioneered in the early 1900s. If you want a real treat go lookup why we eat bacon for breakfast. Then consider that same guy revolutionized how things are sold.
In this case they are using scarcity and a form of rushing the sale before the buyer realizes what they have done. There are plenty of scarce items. But usually if the seller is telling you they are scarce and you only have minutes to decide, ignore them. It is an old trick. It works very well on someone who feels they will be left out in some way.
It depends on whether you’re displaying real information or not and how stale it is. If you list something which sold out last week because you’ll have more next week, that’s not unreasonable. If it’s something you stopped carrying 6 months ago, that’s sleazy. If you do the thing many booking sites do where it displays fake “n people are looking at this!” and “quantity just dropped to x!” notifications, it’s deeply unethical.
But this is also mentioned in the article, if you overwhelm people with out of stock stuff their intent to buy drops.
>If you do the thing many booking sites do where it displays fake “n people are looking at this!” and “quantity just dropped to x!” notifications, it’s deeply unethical.
I mean, that's similar to Amazon having "Only 15 Units Left In Stock", is this unethical as well?
In my point of view, if the information displayed is FAKE - than that's falls into false advertising, and it's illegal. In come countries there are fines for that (I know, I know, no regulator controls online advertising - but that's the problem of the regulator).
If the information is real, I don't think it's unethical.
It had the opposite on me with the new Macbooks. When it was clear that I am only able to get my desired specs only after a month, my interest to buy them greatly diminished.
I would have guessed seeing one product sold out would make other similar not-sold-out products less appealing. Like, if brand A is sold out but not brand B, I'm going to wonder what's wrong with brand B. Is it inferior in some way?
I guess it would depend on the product/brand and at what stage you're at.
If you're set to buy brand B and brand A is sold out, you probably don't even notice it. But if some variations of brand B are sold out (like some colors, one of the examples in the article) than maybe you might commit to the purchase.
Anecdote: When I was looking to buy a Keychron K2 it was sold out, both standard and premium model. I was set to buy the standard model, so I asked to be notified when it was back in stock. First to get back in stock was the premium model, I chose to wait it out. Next day I got an email offering a 10% discount for the premium model - the standard model was still out of stock, so I bought the premium model.
I'm happy with the purchase, but that circumstance made me spend 10-15€ more for a nicer keyboard: out of stock standard model + price discount.
The first time I heard of Harry Potter was on a television news piece saying people were having trouble finding the book (for Christmas?) in stores because it was sold out.
As has been shown countless times in both theory and practice, this metric is useless. People are very liberal in saying the would buy things, support causes, etc. The actual number of people who do buy is completely unrelated to this say-they-would-buy metric. Similarly, having people who say they would buy your startup's product is worth nil. The only customers that count are the actual customers, the ones that do buy.