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Sales happen when buyers fear missing out
- Quinzel 2y agoThis is just the scarcity principle and nothing new.
- jmacd 2y agoI've always thought of scarcity and FOMO as different things, at least from a product marketing standpoint. Scarcity: There isn't much of this thing, so I need to compete to get it. I will prioritize it more highly. There is a scale of desire for this thing. If I believe I need it in the future rather than now, I may defer. FOMO: 0 or 1. I am going to miss out on this. Is it important to me? If it is, I will prioritize all my resources to get it now. If I believe I need it in the future, I will act now.
- andenacitelli 2y agoTotally agree. Maybe if OP phrased it as “Urgency” instead of “Scarcity”, I would have agreed. But these are two distinct concepts that just happen to cause similar outcomes. Almost similar to a concept of an “incorrect” or “false” abstraction in SWE land.
- Quinzel 2y agoI think urgency and scarcity are different sides to the same coin.
- EGreg 2y agoI can tell you that most of the time, buyers don’t fear missing out. Most buyers have a lot of options, and also busy lives. Here are things that can actually make buyers buy: 1. Social Proof / Testimonials 2. Friends / Peer Pressure 3. Free Trial + Structure, eg courses 4. Access to social capital (eg celebs) 5. Matchmaking to what they need (eg dating) 6. Time and Data Entry Investment (quizzes, meetings) 7. Relationships and access to Community Now, there are a form of micro-FOMO called Impulse Buy and Group Deals. But they are organically motivated by 1 (social proof of timely notifications) 2 (group deal coming together because of friends acting) and 6 (having invested time in the search, now they will either shit or get off the pot, cause their friends are going to that thing). I’ve spent 12 years building community software that automates all this, and now started adding AI to it. People underestimate the role of GROUP PSYCHOLOGY in affecting what people do. That is why I have nearly gone broke (having never taken VC) building open source community software that is far more healthy and responsible. Here is the societal issues it solves: https://www.laweekly.com/restoring-healthy-communities/ https://www.laweekly.com/restoring-healthy-communities/
- jschveibinz 2y agoThanks for the info!
- deleted 2y ago[deleted]
- derefr 2y agoOkay, but if a person has already decided that they "want" a particular product (probably due to the other effects you describe), to the point that they have gone to an e-commerce website and added the product to their shopping cart — but they haven't decided to buy it at that moment, i.e. haven't checked that cart out yet, even though they've come back to the site several times since then to check on both ongoing sales, and the status of that cart... then what aspect of consumer psychology make them ultimately decide at some point to check out the cart with the item in it? And alternately, what is it that makes them ultimately decide to abandon the cart / remove the item from the cart? FOMO is a good explanation for this, I think. Personally, there'll be times when the only reason I'm buying something now — rather than postponing the purchase indefinitely — is that if I don't, it's going to be out-of-stock for who-knows-how-long. My opportunity to choose to buy it is going to be taken away, and I literally fear missing out on the ability to make the purchase. (See Amazon's "only N left" note under some items.) Also, sometimes, the item will suddenly go out-of-stock without any clear date for resupply — leaving me sad that I "dallied" on my choice to buy it and so did "miss out." If such an item comes back in stock, I'll usually immediately buy it, because I now realize I was taking its continued availability for granted, but no longer can — and so "need" to get it before it goes out-of-stock again.
- EGreg 2y agoThere is a form of FOMO that can work when taught to… Put expiration timers on ads! Like an elevator ad. People pay more attention when they know the ad will be gone soon, so they better click. The only thing is that clicks don’t necessarily convert to results. So this is far better to be done for CPM ads and display ads that rotate. Which platforms still offer CPM? PS: combine with limited classes “filling up” during the ad so the FOMO is legit at least
- punnerud 2y agoMost sales, especially within IT, is about trust. Scaring a customer into buying with “fear of missing out” and you risk push them even longer away.
- kurthr 2y agoThey key with many of these manipulative sales techniques is that they are on rare purchases for which the buyer has little knowledge. Most people don't buy homes, cars, mattresses, with any regularity so whatever badwill you generate will be irrelevant 10-20 years down the line and likely born by a different seller. Like healthcare, it's hard to treat individual private buyers as an efficient market. Housing has become more like NFTs and memestonks (It can only go up!)... which is true until it isn't and everything goes down. Supporting prices through leverage and regulatory control is now so ingrained that it's hard to do price discovery. (edit: strangely, like memecoins you can actually overbuild a lot of housing like in China and keep prices going up for up to a decade out of sheer buyer momentum)
- tivert 2y ago> Most people don't buy homes, cars, mattresses, with any regularity so whatever badwill you generate will be irrelevant 10-20 years down the line and likely born by a different seller. One scummy trick in that area is owning multiple brands. My understanding is the appliance market is very consolidated (basically 2 main players own almost all the brands). They've carefully maintained the separate identities of the brands they acquired, even as they consolidated design/production, so any "badwell" they create will have a good chance of just causing the customer to switch to another one of their products. There probably should be some kind of "reverse-trademark" law that requires companies to maintain only one brand in a product area. Trademark is about allowing them to protect their reputation from bad actors, and my "reverse-trademark" would protect consumers from using multiple trademarks to avoid the consequences of a bad reputation.
- jameshart 2y agoBusiness customers are extremely conservative. They are fine with missing out. They have fear of getting in, not fear of missing out.
- HarHarVeryFunny 2y agoI'm seeing house prices around me skyrocket in last couple on months - houses selling almost immediately at well above asking price (e.g. 200K above in multiple cases), and this despite already high prices and horrible affordability. I can only attribute this to FOMO.
- dmoy 2y agoYou may also be able to attribute it to a lack of supply, in that specific case
- TeMPOraL 2y agoOr speculators and flippers, perhaps even foreign capital, buying up all available supply, because houses are financial instruments, not places to live.
- Duwensatzaj 2y agoYou misunderstand cause and effect. They have become financial instruments because there is insufficient supply for the demand. Unfortunately others with that level of economic ignorance tend to advocate for policies that fail to fix this and either 1) pick a few lucky winners and fuck everyone else over like rent control or 2) make things even more expensive by subsidizing house purchases or creating risk like the 2008 mortgages.
- paulryanrogers 2y agoWe need regulators and legislators who aren't bought and paid for.
- nullc 2y agoUnfortunately, in areas where density drives value increasing supply also appears to increase demand. Move someplace affordable isn't seen as a solution in part because it's not an intervention, it's just something people can do.
- snowfield 2y agoPeople pay for newsletters?
- kbuck 2y agoI'm especially curious about which ones are earning "life-changing" money for their authors. I couldn't find an easy way to list Substack newsletters by subscriber count, though. (By revenue would be even better.)
- levocardia 2y agoRoughly three categories: 1. Newsletters that cost a lot of money and (claim to) deliver a lot of value, examples being any number of finance/investing newsletters. 2. Massive newsletters with broad appeal. I imagine Scott Alexander, Nate Silver, Matt Yglesias, et al., are doing very well for themselves. 3. Anyone in an industry with extremely lucrative advertising opportunities. And any closely-followed reviewer of very expensive tech products (high sales price * affiliate cut) is probably doing well too.
- pryelluw 2y agoNewsletters have been a very lucrative business for a very long time. The successful ones tend to be about business strategies and case studies. People will pay for actionable business information that they can copy, apply, and profit. Most digital newsletters are merely collections of online content or writings from one person doing things that don’t have an earning potential for readers. That’s why they don’t tend to make any money.
- tsunamifury 2y agoMost sales are completely for no necessary utility now — often not even convenience even. You need to create psychological need to get the buyer into an unnecessary product or service because frankly they are already over served. This is mostly a sign of our economy being built on post-need. It’s sad because somehow we still heap suffering on ourselves as we run ragged to come up with faster ways to inject digital heroine into our kids veins.
- pphysch 2y agoThere's a lot of truth to this. Within social media e-commerce there is the idea of "merch drops" which dial up the FOMO to the max.
- agumonkey 2y agoHow much of behavioral economics is about pulling emotional levers anyway ?
- dghlsakjg 2y agoIsn't the whole point of behavioral economics to explain that? Standard economics models just assume perfect rational action by all actors.
- gist 2y agoMy advice (as an older person) is to 'stop reading and start doing'. You will and can learn and get a feel for business by actual transactions with people and in particular directly with them. Where you can observe reactions (ie facial expressions) and by asking questions or offering information/answers. Especially helpful (again from personal and lucrative experience) is when you can observe reactions from some kind of interaction. (In this order: in person, by phone, by email, by text). Each has it's advantages and disadvantages (ie 'in person' less interaction (travel time etc.) but more info gleaned. This is quite different than traditional 'manage by numbers' or 'do surveys'.
- pron 2y agoCollectibles are entirely based on that. In fact, I'd say they're defined by it -- if there's little chance of missing out on something, then that thing isn't a collectible. How big of a role this plays (and sustainably so) in other kinds of goods is less clear, although discount sales are exactly about creating this kind of fear -- or, conversely, rare opportunity -- and they do work. Regularly scheduled sales, on the other hand, work more by creating a price differentiation, where people to whom a product is worth less than the regular retail price can choose to wait.
- m463 2y agoI think there are other reasons disconnected from that. I've bought "collectible" things out of nostalgia, for instance. And others because they are just cool. Look at edmunds drinking bird. or an sts-8 flight cover.
- elbear 2y agoI think all the reasons can play a part but may weigh differently for different people.
- forgotacc240419 2y agoYep, I've cumulatively spent thousands on weird gadgets that have minimal use the second they appeared on eBay slightly cheap, I still haven't gotten around to upgrading from my 2015 MacBook though...
- deleted 2y ago[deleted]
- m3kw9 2y agoSo a trick that works, but your product still have to provide some value, try a newsletter that doesn’t have any content and try a Fomo tactic
- dahart 2y ago> Sales don’t happen when benefits exceed price. I did not know this. Obviously the title and opening sentence aren’t meant to be taken literally or absolutely despite being phrased that way, since the author had sales before discovering FOMO as a strategy, and also since these statements aren’t true for all products. I can buy that FOMO helps sell a newsletter subscription where it’s hard to communicate value in the first place, and people are used to newsletters being free. FOMO isn’t what drives McDonald’s or gasoline or breakfast cereal though. Most things I purchase aren’t based on FOMO, but maybe a few optional things are here and there. I found the “ads eww” comment to be funny when what the author has discovered is an advertising technique, and one of the very techniques that earns and engenders the ‘eww’. Manipulating people works, but people don’t like knowing they’re being manipulated, especially if claims about missing out or about scarcity are inauthentic.
- bbor 2y agoWell put! I don’t see anything in there that’s a rejoinder to “ads ew” necessarily, tho; if there’s some actual scarcity then telling people about it is not advertising (marketing!) at all, but rather the job of an index, a search engine, a catalog, a govt PSA, etc. I don’t think there’s a single argument for advertising other than “manipulation can make individuals rich, and what’s good for the rich is good for society”. Which isn’t a very popular one to say out loud these days, especially in “woke” advertising giants like Google and LinkedIn…
- csomar 2y ago> “ads eww” I thought this was about Ads that AdBlocker was made for. I don't think they'll have turn a good ROI for a substack audience though.
- schneems 2y agoI sold a book (https://howtoopensource.dev/ https://howtoopensource.dev/) and did a *very* soft launch which performed so poorly I spent the next 6-9months building out full blown launch strategy. FOMO is used a lot as the term du-jour but it goes deeper than that: a sense of urgency. We relate FOMO to urgency because a lot of FOMO happens around events (missing a concert or conference, for example) but to me the key isn’t the fear, it’s the urgency. For my eventual launch I read a book aptly titled “Launch” which talks at length about building a sense of urgency, turning the sale into an event, and generating excitement. I offered a limited time, exclusive incentive with a hard deadline and it worked very well. That hits the fear and the urgency. From Kent: > How can I communicate what the company is missing out on While framed as FOMO, to me it’s good old value-proposition marketing. The book I linked above recommends focusing on a customer “transformation” story. Try to get potential customers to imagine what life would be like if ONLY they had your product. From this lens the FOMO is fear of missing out on being your best/better self. This part of my launch was really difficult. I wanted to talk about what the book teaches, how it stacks up against other books, why my petagogy is useful. It didn’t seem like my book would “turn a coder into a contributor” (by itself). But that’s exactly the outcome I wanted, and it’s the outcome my customers wanted. So, that’s how I sold it.
- fsckboy 2y agoahh, from scanning down the comments, HN's Tenth Rule of Gold Spun into Green: Any sufficiently complicated HN business analysis contains an ad hoc, informally-specified, bug-ridden, slow implementation of half of the first year of an MBA https://en.wikipedia.org/wiki/Greenspun%27s_tenth_rule https://en.wikipedia.org/wiki/Greenspun%27s_tenth_rule
- lessIsAMess 2y ago[dead]
- BLanen 2y agoThis is a bad article only meant to market the book. Almost 0 information in this, actually impressive.
- trollied 2y agoIndeed. The blog is certainly not worth paying for. Grifter.
- moffkalast 2y agoIn a sense they're right then though. FOMO is the only way sales happen for grifters who have no value to sell in the first place lol.
- ultrasaurus 2y agoYou need 3 things to make a sale: 1. Why anything? 2. Why this? 3. Why now? Sure FOMO is one of your tools, but I suspect it's overused. Consider the classic "This price won't be around for long!" move alone.
- deleted 2y ago[deleted]
- sd9 2y agoIsn’t that FOMO?
- Zenzero 2y agoThis may work B2C. For B2B you're going to lose respect by playing this game.
- solatic 2y agoFOMO is a great strategy when you are trying to sell to customers who will buy your product exactly once and then move on. Examples: collector's editions of video games, sales ahead of gift-giving holidays, tourist traps in "I am here for the one and only time I will ever be here in my life" destinations, enterprise sales to Fortune 500 companies where the buyer will get promoted by the next sales cycle. You emotionally manipulate the buyer to make the sale, the buyer regrets buying it within a day or two, and it doesn't matter because they will never talk to you again anyway. FOMO is a horrible strategy when you expect to develop a long-term relationship with your customers. Self-respecting people won't stand for it. They will either switch to a competitor out of spite, or blow aside your transparent sales tactic and keep pressuring you downward on price during negotiations.
- 4death4 2y agoI disagree. For instance, let’s say I’m an auto manufacturer and I need some parts made. If I don’t get those parts, I have to stall my assembly line and lose a lot of money. If I find someone who can supply the parts in a short time frame, then I will definitely fear missing out by declining the sellers offer. If I capitulate and the seller delivers reliably, then I am going to gladly return for their services because they can ensure my business stays running.
- brezelgoring 2y agoThat’s a good example but I think you’re describing another market condition called a captive market, not FOMO. In FOMO, buyers have no real risk in not buying, it’s artifice and theatrics that drive a sale. Your example is a market in which mission critical assets are sold by few and those few control all aspects of the sale. In your scenario, you’re less a mark for a salesman and more of a hostage.
- 4death4 2y agoIt’s not a captive market. It’s a market where the buyer has a need and if they don’t have that need met, then the buyer will suffer. That’s FOMO, and that’s when sales happen. If the buyer can sit on their laurels without any negative repercussions, then they’re not going to pull the trigger until their situation changes.
- etrvic 2y agoI don’t really understand how the HN rating system works. I submitted this article 1 day ago, and it got completely ignored. Now I open the front page and see it there. If anyone can tell me how did this happened, I would really much appreciate it.
- seizethecheese 2y agoI hope you don’t get an answer. I’d rather people not know how to game the algorithm.
- Loughla 2y agoTiming and luck?
- davidsojevic 2y agoHacker News has a "second-chance pool" [1] which I would wager was the likely path for the submission [1] https://news.ycombinator.com/item?id=26998308 https://news.ycombinator.com/item?id=26998308
- gnicholas 2y agoSometimes I get emails when my submissions qualify for the second-chance pool. Other times it just pops up. It is confusing how the time-stamp for the submission (which I think gets reset) and the comments (which at least sometimes do not) end up looking.
- arnorhs 2y agoThis sales strategy has been the basis of a lot of successful companies. Groupon comes to mind
- gnicholas 2y agoGroupon was a successful company for a time, but IIRC it has not aged well. I deleted their app a while back, when I realized I'd not used it in years.
- deleted 2y ago[deleted]
- verve23 2y agoNice to see Cartman get some credit here. (ref: cartmanland 2001)
- bilsbie 2y agoI instantly lose trust for the sales person if they bring up any kind of time pressure.
- mock-possum 2y agoRight? That’s a huge red flag.
- SMAAART 2y agoI did my MBA dissertation on value vs price, and nowhere in my 79 pages I mentioned FOMO. But that was a very long time ago, I think OP has a point.
- kinj28 2y agoFomo is also a great way to make some one act or move the case forward. In context to enterprise sales: most large enterprise deals need multiple stakeholders to sign off. Fomo helps your champion create the urgency needed to conclude the sale.
- grimblee 2y agoThere is always nuance but I firmly believe FOMO is only needed to sell things people don't need and so is a very consumeristic sale tactic (that should probably disappear for our collective well-being).
- Aeolun 2y agoTo some extend. There’s many things being sold that I do not need. I don’t need any of them, but I’ll still be buying some of them. To me it’s mostly a strategy that gets them to be one of those ‘some’.
- latantliz 2y ago[dead]
- JohnFen 2y agoIt's no secret that fear can be used to coerce people into buying stuff, but that's hardly the only effective selling technique. There are others which aren't as objectionable.