Here's your comprehensive guide to limited time offers - why they work, when to use them, and how to implement today.
Consider the power of the limited time offer.
It’s time for a new computer. You’re at Best Buy, standing in front of a model that has every feature you want, and it’s discounted by $300. The store is about to close, so you decide to think about it and come back tomorrow. There’s plenty in stock. Then the salesperson says, “That price is only good for five more minutes. The special ends tonight. If you don’t act now you won’t get the deal.”
What do you do? Buy now and save a few hundred dollars, or keep looking? Chances are good the limited time promotion would swing you from prospect to buyer in a hurry. It’s the computer you want, you’ve verified it’s an exceptional deal, why not end the search and take it home with you tonight?
As an ecommerce manager, you know the importance of getting visitors to hang in there all the way to final payment. Statista puts the current global average for cart abandonment at 77.3 percent for retail.
Whatever the rate is for your business, we can very likely agree it’s too high.
Why not make better use of the same type of limited time offer (LTO) promotion that had you pulling your wallet out at Best Buy, to move your online visitors through to checkout?
Instilling a sense of urgency is a surefire path to increased conversions.
In this article, we’ll first consider the idea of “scarcity marketing” in general, then we’ll talk specifically about limited time and limited quantity techniques. Scarcity is one of the most effective tactics you can find to boost your conversion rate quickly.
The basics of scarcity marketing
Scarcity goes by many names, but you’ve likely encountered it often. Any time you experience the fear of missing out (FOMO), and have the urge to purchase something while supplies last, you’re feeling the pull of scarcity marketing.
We don’t have to look far to realize the power of scarcity. The concept of supply and demand is built on it. Scarcity stretches both ends of the formula by exhibiting a limited supply while simultaneously cultivating demand.
The strategy comes in two primary forms: limited time and limited supply. While we’ll focus on limited time offers in this article, we will include some that hit on limited supply as well. In reality, there are more similarities than differences in how either form of scarcity marketing is used.
Here are examples of scarcity marketing messages:
- Offer ends at midnight tonight
- Only a few left in stock
- Offer limited to items on hand
- Get yours while supplies last
- Order within one hour to get delivery tomorrow
Examples of limited time offers
To get a better feel for how well limited time offers work, consider one of the best examples—Black Friday. If you want the discount, you’d better be ready to jump in there and shop. Throw in the threat of limited supply, and you’ve the perfect combination: limited time and limited supply working together.
The concept worked so well, marketers came up with another limited time offer extravaganza: Cyber Monday. Together, those days kick off the month-long shopping sprint that traditionally brings in about a third of annual retail sales. And it’s all based on limited time: December 26th is too late. The presents have all been opened.
If the limited time offer concept sounds simple, that’s because it is. Smart marketers present the tactic in a host of ways, though.
Here are some of the variances you can use to roll out a limited time offer:
- State the length: Macy’s One Day Sale
- State length and time: Today (6/17) is Your Last Chance – Expires at Midnight
- Not only for products: Free Shipping – This Month Only
- Call it what it is: Limited Time Offer
- Stress the risk: You’ll Never See the Price This Low Again
- Combine it with a countdown timer
There’s plenty of room for creativity with LTO’s but you should always remember the basic rule: If you say it, do it.
Ignore that principle, and you can dilute or destroy the results you might otherwise enjoy. We’re all familiar with the “Going out of business sale” that never ends. Before long, it becomes a joke.
To be successful with limited time offers, be honest. Don’t tell visitors the sale ends at midnight if you’re going to show the same prices and same limited time offer (LTO) the next day. If your offers are dishonest or inaccurate you risk losing the trust you’ve built with your customers which could motivate them to go to your competitor next time.
Special tips for launching limited time offers
All it really takes to be successful at LTOs is to remember to use them. When you offer a special on a product or service, set a definite time to mark when the special ends and make it plain to prospects they need to get in while the door is open or they’ll miss out on the benefits.
Here are a few jumpstart ideas to help you get even deeper into the process
- Limited time offers aren’t limited to landing pages. You can present an LTO as a call-to-action in a transactional email. When you send the receipt for the current purchase, for example, include an LTO to encourage the next transaction.
- Remember, limited time offers don’t have to come in the form of price reductions. You can offer a free gift for a limited time, a free upgrade, or a special service. “All orders placed today qualify you for our Hawaiian Vacation drawing,” for instance.
- You can use limited time offers to test offer configurations or to see how your audience responds to a new item.
- The price change can be set to occur in increments, rather than all at once. You can even set it to go up by a certain amount with every purchase.
- Point out the benefit the prospect will get by taking the desired action. Don’t focus on “Buy Now” only. Spell it out: “Buy Now and Get Free Shipping.”
Limited Time Offer Marketing Works
The best thing about limited time offers is they work. Used correctly, you’re going to get more sales with an LTO than without one. That’s a universal truth. Few marketing tactics are as dependable as limited time offers.
If you need more ideas or want to run your plans for a limited time promotion by a conversion optimization team before testing the waters, give us a call. At The Good, helping you convert more customers and get more sales is what we do best.
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