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.
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.
Right! Exactly, the value proposition is stating what you think the value is to the consumer, and when it aligns with what they really value then sales occur. The author made a clear distinction saying, “I naively assumed that people transacted when value exceeded price. I blindly pursued adding more value to this newsletter.” He’s talking about value from his own perspective rather than value from the customer’s perspective, like you did with listing the subjects and teaching methods in your book.
I’ve made the same mistake trying to add what I think is valuable and talk about what I think is valuable, and have it lead to low sales, so I know from experience that good marketing is necessary and that good marketing can be difficult for engineers to learn, and that building it does not mean that they will come and buy it. Part of what I’m saying is you have to really understand the eww of advertising, why it’s there, where it comes from, and how to use it properly, and you have to be careful and figure out what the difference is between showing someone the value and lying to them, because sometimes the line is very gray and/or very thin.
Am I misreading your post or are bragging about selling your product by lying about what it can can do.
Now, is it guaranteed to do that for everyone? No.
If you view my marketing page, I’m curious what your thoughts and how it could be better.
I want to sell the upside but not over sell it. If you buy the book and never open it, it won’t help get any little green squares on GitHub.
Is there a billionaire past or present who didn't use this strategy?
Agree. The best salesmen I've met have never overtly tried to sell me anything. They've been very knowledgeable about the product and they're much more having a conversation rather than throwing a sales pitch.
All three of those examples use FOMO to drive more sales though. Limited time offerings like the McRib/Happy Meal toys, “last gas for 100 miles”, and even cereals being “part of a balanced breakfast” (despite all the problems with that statement) are designed to trigger FOMO.
It’s not the only strategy employed, but it is employed.
McDonald’s is using it sometimes, you’re right. I was originally thinking of basic items, burger and fries, but they do have seasonal items and limited time specials, so I’ll grant you that one and stand corrected.
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.
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…
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.
Scaring a customer into buying with “fear of missing out” and you risk push them even longer away.
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)
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.
Our CIO ordered us to switch away from VMware when Broadcom made changes to the licenses. We are a mid-sized company with 1500+ employees. If I remember correctly, Broadcom anticipated some customers would switch away, but they could still profit more from their larger customers.
My friend works at a bank. They switched from Azure to Google Cloud because Microsoft's prices "didn't make sense" to them.
trust is a key in IT.
Where I work currently they won’t move off AWS because the relationship is really good and the support has been good (so I’ve been told) and they have had the relationship for quite some time so even though we could get better pricing with GCP or switching some things to more specialized yet reliable vendors we default to AWS for almost everything because the relationship is seen as solid and trustworthy with history to back it up
Doesn’t mean we don’t get quotes from other providers in negotiations at contract renewal time and use frameworks / technologies that allow us to switch vendors pretty easily if we needed and I know there is an upper limit here. However it’s also one of those “we pay a little more for peace of mind and familiarity” things, so it’s with some (relatively marginal) higher cost
But, I certainly don't use it to pressure the customer.
This is probably a bad assumption. A change in the offer price does not reflect on their trustworthiness. You’re also tricking yourself because someone wanting to lock you in down the road and raise the price won’t do it up front, they’ll do it later.
An offer price can change due to market conditions. The statement that price can’t be guaranteed is an optimistic speculation that sales or costs might jump, so you can buy now before their business increases and prices rise due to higher costs or demand. You can legitimately benefit if you buy before prices go up. You certainly can gamble that prices won’t go up, but if they do and you waited, it doesn’t mean the other party can’t be trusted, it means you lost the bet.
If you wait and get a higher price, that could even be a sign that the company is more trustworthy than if the offer doesn’t change. But of course there’s no guarantee. And ultimately there is no guarantee that when you buy a service on a limited time contract that you won’t have prices jump later when you’re ‘locked in’. It would be quite silly to not expect the renewal price later to rise for a variety of reasons, and you should have contingencies in place and be willing, able, and ready to switch providers.
I don't know what companies you are working in, but if the service is deemed valuable enough really nobody cares about money as long as it's in the ballpark of what similar services costs. And When it comes to time, yes all projects starts with "we gonna start using this this week" but we also know it takes a year to roll out even the most basic tool in a medium sized organization so a couple of weeks here and there doesn't really make a difference either.
All that matters is if the tool seems to solve your problems – and the price is not significantly different from the competitors and having a sales person bugging you every single day telling you you need to make the decision now because otherwise who knows what might happen to the price – honestly they can just go ** themselves. I make the decision when I'm ready, and if they are deciding to significantly jack up the price in between that period they are just making themself less trustworthy.
To your point perhaps, one thing large organizations value above most things is predictable cost. They actually don’t want usage based pricing because it’s unpredictable and could spike, even if the usage based cost is significantly lower on average.
I tried marketing usage based pricing to companies for too long before realizing that it was a disincentive working against me and that price didn’t matter much.
This is one of the primary reasons why I avoid any SaaS that I might actually come to depend on. It's a trap that is an inherent part of that model.
If you are selling something under $10k, then you can often get one person with budget approval up to $10k to buy it on a whim, and that's much easier. But that actual level is hard to figure out.
All that being said, your point feels like it could be restated to say they care a lot more about protecting their jobs. And, it is really strong right now.
Did not seem to negatively impact their sales after all... probably same mechanics on Booking.com etc. with hotel rooms.
I have a sort of life rule about being sold to -- if anyone is saying/implying that I need to make a purchasing decision quickly, my decision will always be to not make the purchase. There's no such thing as "act now or you lose" in the wider marketplace.
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
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:
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.
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
People fear missing out on the latest thing that everyone else is doing.
Testimonials and Social Proof doesnt need to instill any fear. They instill comfort. The opportunity can be available indefinitely.
Peer pressure on the other hand instills discomfort, that would resolve with making a small purchase, but again it is coming from the friends.
This is examples of NETWORK EFFECTS. They also help with lock-in. Keep this in mind: people continue to pay for something when
1) They have a problem
2) Your product can solve it
3) Every week, it costs less to pay for your product (automatically) than solving the problem themselves (eg forking your software)
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
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.
The vast majority of people are perfectly okay with FOMO as a sales tactic. This includes self-respecting, loyal, repeat customers of quality brands. Conversely, very few people are spiteful enough to go through the trouble of switching to a competitor purely out of disdain for FOMO being used as a sales tactic.
A couple examples:
- The New York Times has 10 million paying subscribers for online content. A tremendous number. Many of their sales pages feature countdown timers and phrases like "Time is running out" and "Offer won't last."
- Pretty much any clothing brand. For example, rare Nike shoe drops. People are willing to spend hundreds of dollars, wake up at ridiculous hours, and stand in line for hours, for FOMO-driven clothing sales. And far from driving people away from the brand, doing this increases people's loyalty to the brand, because FOMO works on social proof.
I very much identify with the self respecting type your parent describes and try my best to 'punish' sellers who try silly FOMO tactics, by demoting them into oblivion in my books. However, I am still prone to some FOMO with proven, trusted brands.
Anecdote: Several years ago I happened to try out a certain brand of shoes and loved the quality and style and have ever since only bought that brand and have even introduced friends and family members to it. However, I still wait for their deals to show up before picking up a pair and am vulnerable to their "time running out" campaigns. I click "Buy", assured that at least I won't be stuck with a substandard product.
I like to think that if I ever build a product, I would focus on quality and attract the kind of customer I myself am and would never stoop to the lowly FOMO tactics, even for assured short term gains.
You have the same situation with time limited sales on Amazon for instance. It should be rising your FOMO to the roof, but as a consumer you know there will be another sale in 2 month, or really it could be any day, and if you were to miss this sale on an item you wanted, you'd just wait for the next sale.
On the other side, Nike shoes actually disappear from the line up. There's models that were functionally different that I regret not stock-piling when they were still in production. And they were not marketed as exclusives or limited, they just got discontinued. It's not FOMO, it's actual time scarcity.
Price trackers (apps and browser plugins) crowd source scrape prices and can show you the price history on a chart so you see the sales and how frequent they are and when they happen. Sometime soon I expect there may be a push to have laws that require price history transparency since if the price triples the old positive reviews may no longer apply and should not be showcased as if they do.
Otherwise for anything that doesn't need reputability and/or are seen as near consumables, I think people just grab whatever's on sale and go on with their life. When there is no real differentiator from the start, it's hard to have FOMO about a specific item only available for a limited period.
I'm a NYT subscriber in spite of their sleazy sales and retention tactics, not because of them. The product is reputable and unique enough that they get away with sales tactics that would otherwise be a turn off.
I’ve signed up for museum memberships because of a specific event that required it, or because I got a call reminding me of losing some benefit or announcing some made-up deadline for a matching contribution. I have long-term relationship with them. But I really don’t care enough to act without a nudge.
> will either switch to a competitor out of spite
This doesn’t sound like a personality that will remain with power or wealth for a long time. Controlled spite can be effective, reputationally. Random spite never is.
Based on my experience with Kickstarters (especially board game Kickstarters), as long as you actually deliver the product that you said you're going to, there's no negative consequences to using FOMO.
Yes FOMO in your example can motivate. The problem is, not the types you want an LTR with.
This is quite different than traditional 'manage by numbers' or 'do surveys'.
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.
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.
I can only attribute this to FOMO.
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.
Move someplace affordable isn't seen as a solution in part because it's not an intervention, it's just something people can do.
Now I bet that expanding a road not by extra lane, but by ten of them, would exhaust all the "latent demand" and then some. Similarly, if the supply of housing were to increase tenfold, perhaps we'd run out of speculators?
Then again, leverage means they can probably absorb infinite supply - just keep loaning and buying to keep the pyramid scheme going.
This seems like panic buying (FOMO) - people buying because prices are rising and they don't want to risk them to get worse, or maybe they see it as a perverse sign of value (like people buying momentum stocks).
Maybe I'm just jaded from being in Seattle too long where "200k over asking despite already high prices" has been a regular thing for like... 10+ years?
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.
Standard economics models just assume perfect rational action by all actors.
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.
But that was a very long time ago, I think OP has a point.
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.