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Create urgency and drive purchases by leveraging counterfactual thinking

Create urgency and drive purchases by leveraging counterfactual thinking

Kim Johnson

Dec 02, 2015

Have you ever hemmed and hawed over buying something, and finally decided to proceed with the purchase only to discover that the item you wanted is now sold out? We’ve all suffered from indecision and experienced regret over our inaction. What makes us feel regret over the fact that we hesitated a moment too long? Why does Lululemon sell out of their one-time products every week, Starbucks continue to sell Pumpkin Spice Lattes like crazy, and flash sale websites like Rue La La continue to be successful?

It comes down to what we call “counterfactual thinking” in Psychology. Counterfactual thinking is the “what if…” and the “if I had only…” thought process that crosses your mind when you think of how the past could have gone differently. For example, what if I had been decisive and purchased that concert ticket yesterday instead of waiting to try until today, when tickets were sold out? Maybe I would have gone on stage! By creating urgency, companies make their products seem more desirable in the moment, motivating consumers to take action and purchase their products. It is human nature to think about what could have happened – we automatically imagine what will happen if we do take action and consider the risks associated if we don’t. Avoiding regret of stagnation gives the needed push to take action.

Brands use several tactics to trigger this sort of thinking:

The Lululemon tactic: Lululemon does a fabulous job at creating urgency by rolling out new products each week – each with different styles and/or colors. These products are offered once—when they sell out, they’re gone (aside from staple colors, such as black). While a consumer may own a Lululemon top in one color, if a new color catches her eye, she may feel pressure to purchase the new color, fearing it will sell out and never be available again. While this tactic may require constantly updating inventory, it also causes the products to fly off the shelves each and every week. If a company wants to increase their desirability by selling a limited amount of product, this is a great method to adopt.

The Starbucks tactic: Why is it that every time September rolls around, coffee lovers flock to Starbucks to sip Pumpkin Spice Lattes? They’re only offered for a limited time (fall and winter), giving consumers an awful lot of time to think about the pumpkin drink and miss it. When it’s finally back in stores, consumers want to get it while they can; after all, this drink is seasonally limited and they know it will be gone again come January. The PSL’s desirability is hyped up by the media (e.g., news releases of when the latte is slated to hit stores) and has created a widespread pumpkin spice craze with participation from stores like Trader Joe’s. By tying Pumpkin Spice Lattes with the time of year, consumers know when to expect the product and become trained to desire it when the time comes. If a brand wants to increase their brand awareness and create a “signature” product that they are known & loved for, this might be the tactic to take.

The Rue La La tactic: There are many flash sale websites out there from Rue La La to The Clymb to Groupon. Consumers have a finite amount of time to purchase a product at a discounted price. Not only could the product run out by waiting too long, but the clock could too – making inaction especially risky. After, say, two days, if you haven’t decided to buy the product, it disappears – and may never come back. This tactic is particularly strong as it creates urgency related to inventory and time (neither of which is unique on its own when it comes to a sale). If a company wants to sell a particular amount of inventory in a very short period of time, this might be the right approach to move forward with.

All of these tactics stimulate counterfactual thinking. If you don’t buy the Lululemon top now and it sells out, every time you see someone wearing that top, you’ll think of how you waited too long, ultimately increasing your tendency to purchase sooner next time. If you only swing by Starbucks once when Pumpkin Spice Lattes are in season, you may crave a PSL in June and have even more desire to join the crowd come September. If you see something on sale that you like, but don’t purchase in time and consequently the product’s price increases $50, you then must decide whether the product still offers the same value with the increased price tag. While these approaches vary slightly, they all can be used to give consumers the necessary push to purchase and decrease the desire to wait.

Kim Johnson

Kim Johnson

Research Manager

I’m most curious about what makes people tick. What causes people to think and act the way they do? What can influence a person’s decision, one way or another?

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