Using Scarcity in Lip Business

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1. The Objective and the Results

Scope of Research and Criteria

Our team at LipBlush.com, in collaboration with Powderbrows.io, embarked on a comprehensive research project to explore the role of scarcity in marketing within the beauty industry, specifically focusing on Lip Blush, Powder Brows, Hairstrokes, and Microblading. Recognizing the widespread use of scarcity as a marketing tactic, we aimed to determine the conditions that make it most effective in driving results, particularly in the lip business sector.

We collected primary data from two key periods: the "pre-Covid" years of 2018-2020 and the subsequent years from 2020-2023. Our study meticulously analyzed over 920 social media campaigns dedicated to offering pigmentation services and training, where scarcity was used as a main or secondary strategy to enhance conversion rates. The geographical scope of our data was extensive, covering 24 countries, including major EU countries, the United States, and the United Kingdom.

Our analysis primarily focused on women aged 25-34, who constituted 42% of our dataset. This was followed by the 35-44 age group (26%) and the 18-24 age group (13%). Additionally, we conducted 433 interviews with individuals who had participated in these campaigns. These interviews were designed to understand the participants' motivations for engaging with certain campaigns and their reasons for resisting others. The findings from this diverse and comprehensive dataset proved remarkably consistent across all demographics and regions.

Scarcity Works Best in Specific Types of Campaigns

While it's commonly accepted that scarcity can be an effective marketing tool, our research reveals that its success depends greatly on how it's executed. Implementing scarcity in the marketing strategies of the lip business is not as straightforward as it may initially appear. The effectiveness of scarcity varies significantly based on its application, and understanding these nuances is crucial for successfully leveraging this tactic.

2. Employing Scarcity in Marketing

Limited Availability

A highly effective use of scarcity involves announcing limited availability in an artist's schedule. Artists often communicate this through social media, urging potential customers to act quickly to secure their spots. This urgency will prompt people to book the available time slots immediately. The same principle applies to training sessions or webinars, particularly when availability is limited, and a service or item is close to being "sold out.”

Deadline-Driven Offers

Another common scarcity tactic is the use of deadlines. Offers like discounted gift cards are available only up to a certain date. To emphasize the urgency, some campaigns incorporate reminders and countdown clocks. This method is also suitable for early-access promotions, offering more favorable conditions for a limited period.

Exclusivity in Hierarchy

This approach often targets an individual's desire for status. An artist might offer "VIP client status" as a reward for repeat business, or an academy might create a hierarchy where higher levels represent smaller, more exclusive groups. These statuses are then marketed as aspirational, motivating clients to strive for them. This principle also applies to memberships and co-promotional deals, where obtaining a special "limited status" with a PMU artist could provide special privileges or better terms with a third-party partner.

Combined Scarcity

Different scarcity strategies can be combined for more effective campaigns. Campaigns often utilize scarcity in multiple ways. For example, "model search" campaigns by emerging artists highlight the limited availability of model slots.

Adding another layer, this opportunity can be shared selectively through private messages before publicizing it. This selective approach can greatly enhance the appeal, potentially increasing its attractiveness by over 200%. However, like all scarcity strategies, it must be applied correctly and contextually to succeed.

3. When Scarcity Works

Freshness Is Vital for Limited-Item Campaigns

In campaigns where scarcity is tied to a limited number of items, the timing of announcing the item as "scarce" is crucial. For example, when an artist offers a limited number of model seats or the last available time slots, the response rate to such offers diminishes significantly over time. The likelihood of a response drops more than 52% by the second day and falls another 20% after 48 hours. While factors like price and campaign duration play a role, their impact is relatively minor compared to the timing of the scarcity announcement.

This trend suggests that these offers quickly lose their appeal. If an artist's budget for such immediate offers doesn't consider this rapid decline, the campaigns are likely to be less effective. A practical strategy would be to allocate nearly half of the campaign budget on the first day, 30% on the second day, and 20% on the third day. Prolonging such a campaign over a week would be counterproductive, as it goes against potential customers' psychological behavior patterns.

Reverse Effect in Deadline-Based Campaigns

Contrastingly, campaigns with a deadline often exhibit a reverse pattern in customer behavior. For deals like discounts on online training courses or seasonal gift cards, available only until a certain date, a specific conversion pattern is observed: 15-20% of conversions occur upon the offer's announcement, a small percentage (5-10%) during its availability, and a marked increase in conversions (about 75%) as the deadline approaches.

This behavior suggests a strategic approach to budget allocation for deadline-based campaigns. An even budget distribution throughout the offer's duration would miss the critical spike in conversions near the deadline. Most of the budget (50% or more) should be concentrated in the final 48-hour window, particularly in the last 12 hours, to effectively leverage this observed trend in consumer behavior.

4. Believability in the Possibility of Scarcity

One key aspect that can greatly affect the success of scarcity-based campaigns in the PMU (Permanent Makeup) business is the perceived realism of the scarcity. Our research has identified two critical factors that boost the credibility of scarcity: the tangibility of the item and the total number of items sold. To illustrate this, consider the following examples.

On one end, we have tangible products with limited stock, such as PMU machines. When an artist announces that only two units are left, the scarcity is readily believable. The rationale is straightforward: none will remain once these two machines are sold, making the scarcity genuine and easily understood.

However, applying scarcity to services less thoughtfully, like offering limited spots for a mailing list or an online seminar with ample capacity, can be counterproductive. This is especially true for consumers with higher purchasing power and better analytical skills. For example, a significant audience segment (about 10-20%) might not respond to such tactics, feeling that the scarcity is artificially created. In contrast, those influenced by the scarcity aspect often reported they couldn’t afford the item, indicating a disconnect.

The lesson here is straightforward: high-value services or products are less likely to benefit from scarcity tactics perceived as unrealistic by financially capable individuals. Claims of "sold out" online training sessions or "ending stock" of digital products must be approached cautiously. Marketers should be wary of overusing phrases like "limited seats only!" in every campaign, as this might not always be the most effective strategy. The key is to maintain authenticity and believability in the scarcity being presented.

5. Probability of Competition

In the pigmentation industry, the effectiveness of scarcity-based campaigns is significantly influenced by the perceived competition for the limited item, solution, or appointment time. The sense that someone else might claim the scarce opportunity before they do can drive potential buyers to act. This perception can be created on social media through two key criteria: a) visible public engagement with the campaign, evidenced by likes, shares, comments, and views, and b) certain offered items becoming unavailable during the campaign. The absence of these elements can weaken the scarcity's impact, potentially rendering the campaign ineffective.

To illustrate, consider two examples from our research. Imagine an artist with a substantial following on Instagram or Facebook offers five model seats. If the post quickly accumulates many likes, receives comments, and the artist announces that one or two slots are already taken, the offer creates a sense of urgency. The recent offer and visible public engagement can increase the likelihood of potential buyers reaching out by 50-200%. In this scenario, the scarcity is perceived as real and beneficial to the artist.

Conversely, if an artist with a smaller following posts about the "last available booking times" and the post garners only a few likes with no comments or signs of competition, the scarcity strategy may not have a positive effect. This situation is further compounded if potential customers notice similar posts with claims of "last available times," which can raise doubts about the authenticity of the scarcity. Such scenarios can turn the scarcity tactic against the artist, deterring potential customers who might associate the lack of engagement with inferior service quality or less popular solutions. The key takeaway is that for scarcity to work effectively, there needs to be a genuine perception of competition and demand for scarce resources.

6. Next Available Option

The perception of how long a product or solution will be unavailable is a critical factor in the success of scarcity-based campaigns. Insights from customer interviews who responded to certain scarcity offers while ignoring others led to two significant conclusions.

Firstly, the impact of scarcity in the pigmentation business is markedly more potent—by 36-40%—when there is significant uncertainty about the end of the "scarcity period." This means that if an artist clearly communicates when similar conditions for acquiring an item, solution, or product will next be available, it strengthens the effect of scarcity.

Secondly, the longer an item remains unavailable, the greater the impact of these scarcity announcements. The most extreme form of scarcity is declaring an item "unavailable forever." For example, if an artist announces that a solution will be offered at a reduced price for the "last ever" time, the scarcity effect is significantly amplified. If this period of unavailability is long enough to influence decision-making, the effect of scarcity can increase by as much as 300%.

It's important to note that artists must strictly adhere to these scarcity conditions. Extending deadlines or making exceptions afterward can seriously undermine the effectiveness of the scarcity tactic, potentially turning it against the artist.

Overall Context - Scarcity of Scarcity Campaigns

The frequency of scarcity campaigns also plays a crucial role in their success. When such campaigns make up less than 20% of the total time an artist operates during a specific period, they are rare enough to boost the scarcity effect in terms of sales significantly. However, their effectiveness starts to wane if scarcity tactics are used for 50% or more of the overall operational time. Overuse of scarcity, even when all other factors are optimal, can become counterproductive. The key is to strike a balance, using scarcity sparingly to maintain effectiveness.

7. Focusing on “Hard”-Closing

In a broader marketing context, campaigns that implement strict deadlines effectively employ a "hard-closing" strategy. This approach prompts customers to purchase, book a service, or join an offer. It's common for artists, especially those new to the business, to be wary of this tactic due to the potential for some customers to reject the offer, leading to lost sales.

However, many seasoned artists have come to appreciate the benefits of using scarcity to enforce "hard closing." The essence of a "hard-close" strategy is its productivity and effectiveness. Its primary benefit lies in providing clear insights into the customer base's level of hesitation. By implementing a firm decision point, artists can more accurately gauge the true demand for their products and services.

This strategy allows artists to filter out less committed customers, focusing their efforts on those more likely to engage and invest. In the long run, this approach can lead to a more streamlined and efficient business model, where the artist's efforts are directed toward genuinely interested clients, thereby optimizing sales and customer engagement.

8. Conclusions

Effectively using scarcity in the PMU (Permanent Makeup) business, including services like Lip Blush, Powder Brows, and Microblading, can significantly influence success, but much depends on how it's implemented.

Firstly, the nature of the scarcity dictates your budgeting strategy. For scarcity based on limited item availability, investing heavily in the initial announcement phase is crucial to capture the initial surge of interest. On the other hand, for deadline-driven scarcity, it's more strategic to allocate the majority of your budget towards the end of the campaign to maximize the urgency effect.

Secondly, it's important to recognize that more discerning customers, often with greater purchasing power, may be skeptical about digital scarcity claims. They might not readily believe in limited virtual seats or outdated digital products. Therefore, when targeting this demographic, be cautious with using "limited availability" claims in your marketing efforts.

Thirdly, scarcity tactics are more convincing when customers perceive genuine competition for scarce resources. Engagement on social media platforms, such as likes, comments, and shares, can effectively indicate this competition and enhance the success of your scarcity-based campaign.

Lastly, the impact of scarcity is heightened when customers are aware of the timing of future similar offers, particularly if there's a significant gap before the next opportunity. The most effective form of scarcity is suggesting that an item or service is available for the "last time." Remember, scarcity is most effective when it's not overused – it should constitute less than 20% of your operational activities to maintain its impact.

Additionally, scarcity campaigns can effectively facilitate "hard-close" scenarios where potential customers are compelled to decide. While this approach might lead to some lost sales, it provides valuable clarity about the real demand for your services, helping to streamline your business focus.