Why FOMO is good for business (and how you can use fear of loss to persuade your customers to book online)

Published by:
Nick
Associate Director

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Fear of missing out (FOMO) is described in Wikipedia as "a pervasive apprehension that others might be having rewarding experiences from which one is absent". This might include a party we didn’t get invited to? A WhatsApp group that we don’t belong to?

Social media has raised our awareness of events from which we might be absent and an increase in social anxiety appears to be a regrettable by product. That’s clearly not something that is good for social well-being. Yet, while we should rightly frown on the negative social dimensions of the FOMO concept, commercially it offers opportunity that many businesses are acting on, intelligently and responsibly.

Using FOMO to drive online sales

FOMO has long been used by sales and marketing execs to drive purchase decisions. In the digital world, it has become easier to quantify the FOMO impact and therefore we see more businesses adapting communications in response. The conditions under which it can be turned to business advantage are as follows:

  • An inventory that visibly reduces as sales are made
  • A large number of potential buyers
  • Time-limited offers and promotions

Where these conditions exist, as customers we know that if we delay our decision to purchase, there is a risk we will miss out altogether. This anxiety heightens our propensity to take action now. 

How it works in the real world

Anyone who has ever played village cricket will be able to identify with this personal illustration of my own FOMO during the afternoon tea break. There are three ubiquitous dimensions to a standard cricket tea: a hot beverage, some sandwiches and the ‘cake’. Whilst there have been many joyous exceptions in my cricketing career, the ‘cake’ dimension of a standard cricket tea has typically consisted of a couple of bland looking swiss rolls, a selection of garish Mr Kipling fondant fancies (amounting to 80% of the offering) and finally (and thankfully) the star of the show: a limited selection - usually around a half dozen - Cadbury’s chocolate rolls. In their gorgeous purple and silver wrappers, they rise about their meagre rivals, positively radiating from the plate. 

Now here’s the dilemma. There are 22 players, a couple of umpires, a scorer if you were lucky and only 6 of those purple beauties available. Facing the opposition’s opening fast bowler was infinitely less stressful than being tenth in line for tea and knowing the odds of procuring your favourite cake were stacked against you. It’s about to get worse as you endure the agony of getting closer to the table, watching and twitching nervously, as those ahead of you complete their sandwich stack, before reaching towards the cakes. Will they? Won’t they?

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Facing the opposition’s opening fast bowler was infinitely less stressful than being tenth in line for tea and knowing the odds of procuring your favourite cake were stacked against you.

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Sod this… I can’t stand it anymore. I’m just going to get mine now!  

Trust me, the boos and jeers from the other players waiting patiently in line, were nothing compared to the sheer joy of my FOMO subsidence as I planted the object of my desire triumphantly on the middle of my empty plate. My apologies to Mr Kipling. I’ve no doubt there are many fans of the fondant fancy. I’m just not one of them.

Using FOMO on your website

Anyway, at Semantic we have been joining in the FOMO game with a number of our leisure attraction clients and the results are compelling. An obvious place to start was with iFLY Indoor Skydiving. At iFLY, the FOMO condition is easily stimulated because, just like an airline, spaces are sold in limited time slots. As those slots got close to being full, what, we wondered, would the impact be of showing how many spaces were left? In other words, how about we show the customer exactly how many cakes are left on the plate and see how that influences their behaviour.

 

What we found

  • A revenue boost over the testing period for the new messaging
  • A rise in users clicked through to the next step of the journey, rather than abandoning
  • An increase in customers buying on the same day as their first website visit. 

In summary

If you recognise the concept of FOMO and respond to it on your website, it can be good for businesses with limited, perishable inventory. 

The ability to adjust selling prices for the same inventory as it gets closer to selling out, extends the FOMO impact: only 2 seats left at this price. Is that taking it too far? That’s one for each brand or business owner to decide. We certainly would never advocate taking advantage of the customer. Delivering value is the best way to grow a business long term. 

“Oh, but I never believe the airlines when they tell me there are only 3 seats left”, commented my wife. Well, we don’t have an airline client, so we can’t comment. What we do know, is that when the iFLY algorithm says there are only 3 slots left, there are only 3 slots left. If you want them, you better act now.  

P.S. did you know we can split-test similar ideas on any website – not just ones we’ve built ;-)