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The Power of Scarcity!


The other day on my way home I came across this sign for a new gym. Only 500 memberships are available! It must be an exclusive gym right? Only 500 memberships? How many gyms do you know that limit their memberships? I better go get mine now while I still can!

Or should I? How many memberships is 500 for a gym? Is it a lot? Is it very few? Who knows, and to be honest, it doesn’t really matter. The key metric to how busy a gym is going to be is how many active members they have. If it’s not already common knowledge, the reason most gyms sell yearly memberships is that a large number of people won’t keep going past a few weeks to a few months. Even with the best of intentions. This is why they oversell memberships, and why gyms are generally more packed around News Years. How many memberships do you think are unfilled New Year’s Resolutions?

This however is the first time I’ve seen a gym display an actual real limit to the number of memberships they will offer. At all other gyms I’ve seen they’ll just take your money and enroll you no matter how many members they already have. I don’t ever remember seeing a gym limit their membership. But is 500 a high or low number? If they’ve never had more than 300 memberships, then 500 is more than they’ve ever had so it could almost be considered an unlimited number of memberships. But our perceptions that there is a limit makes us value each membership much more than they’re really worth!

I will therefore bet that because they’ve put a limit, whether or not it’s real or artificially so high that it’s in essence unlimited, that they will get a LOT more sales than if they had the very same sign with just the two words “only 500” removed!

Scarcity can be an effective marketing tactic, and this is a perfect example.

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