How Travel Companies Improperly Use Cialdini's Scarcity Principle of Persuasion

I’ve been writing about psychology as a way to better understand our audience’s behaviour; which is key, if you start designing a marketing/content marketing strategy (if you have missed that, have a look).

One of the psychology theories that is getting more traction is known as Cialdini’s "Principles of Persuasion". Since we live in an age of information overload, Cialdini says, we don’t always have the time to process all of the information and make informed decisions. This incapacity makes us look for signals that help us decide if we want to do something. Cialdini calls these signals “shortcuts.”

“Scarcity" is one of these shortcuts. When we fear that something is scarce, we feel compelled to act – buying, stockpiling, or experiencing that thing before it’s gone. This is an incredibly powerful psychological principle that marketers have used for years to drive action. 

“Scarcity": when we fear that something is scarce, we feel compelled to act – buying, stockpiling, or experiencing that thing before it’s gone.

Think about airline companies that show how many seats are left at specific price points. Think about Hotel booking companies, showing popularity of Hotels and properties they list. I’ve always questioned if the information provided by these companies reflect the reality. Then I found this, a few days ago. And this.

"Six online hotel booking sites will make major changes to end misleading sales tactics and hidden charges after an investigation. Expedia, Booking.com, Agoda, Hotels.com, Ebookers and Trivago were subject to scrutiny by the Competition and Markets Authority (CMA), which intervened due to serious concerns about hidden charges, pressure-selling tactics, misleading discount claims and the order in which results appear on the site pages."

"Companies should not be giving a false impression of the availability or popularity of a hotel or rushing customers into making a booking decision based on incomplete information. Examples of misleading discount claims may include comparisons with a higher price that was not relevant to the customer’s search criteria. For example, some sites were comparing a higher weekend room rate with a weekday rate or comparing the price of a luxury suite with a standard room; when highlighting that other customers are looking at the same hotel as you, these sites should make it clear they may be searching for different dates. The CMA also saw examples of some sites strategically placing sold out hotels within search results to put pressure on people to book more quickly. Sites have now committed not to do this."

The CMA also saw examples of some sites strategically placing sold out hotels within search results to put pressure on people to book more quickly

CMA Chairman, Andrew Tyrie, said: "The CMA has taken enforcement action to bring to an end misleading sales tactics, hidden charges and other practices in the online hotel booking market."

"These have been wholly unacceptable. 6 websites have already given firm undertakings not to engage in these practices. They are some of the largest hotel booking sites. The CMA will now do whatever it can to ensure that the rest of the sector meets the same standards."

"The CMA will now monitor compliance with the commitments made by the booking sites. All changes must be made by 1 September at the very latest, though the sites have already started making improvements."

Next time you will book a flight and will find that only 3 seats (or rooms) are available, don’t panic. Take your time. It’s the scarcity principle.