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Why Limited Time Offers Work

The clock is ticking. You have only 10 minutes to decide whether or not to buy an item. Or, itís a Gold Box offer at Amazon, and the item will only be available today, or while supplies last.

If youíve ever seen these types of offers online, they are what are termed limited time offers (LTOs), and they are a psychological pricing strategy that works well for a number of reasons.


What Is a Limited Time Offer?

An LTO is an offer that is good for only a short amount of time, and then it is gone forever. You can use LTOs in your online business to drive sales, by keeping your customers on their toes. You can even add a countdown clock to your sales pages to reinforce the perception that time is running out and they donít want to miss such a great deal.

Why do LTOs work so well? Here are a number of reasons.

Bargain Hunting

Some people just canít resist a bargain. Giving them an LTO, especially if your customer has had their eye on that product, is a win for both of you.


The limited nature of the offer implies scarcity. It could be a small number of items available only for that short time as well as the tight timeline, so people who donít want to miss out really need to act fast.


Sometimes you can sweeten the deal with an LTO that has never been offered before and wonít be offered again. For example, you could create a bundle of your top products all for one low price as an LTO.

You might also offer a pre-launch special for a new product, with the clock ticking down until launch day, when the full price will go into effect. This is usually a very attractive offer and a reward of sorts for those who are on your email marketing list. It offers them an exclusive no one else will get.

Fear of Missing Out

One of the reasons why an LTO works so well is the fear of missing out. They donít want to have to pay more at a future date. They might even be afraid that they will never see the product, or the sale price, or the exclusive offer, ever again.

Fear of Loss Rather Than the Joy of Gain

In terms of what is called psychological pricing, studies have shown that consumers are motivated more by a fear of loss, of missing out, than they are by the joy of gain. EBayís slogan used to be “Shop victoriously,” which referred to the auction aspect of the site and putting in the winning bid in order to secure the item.

However, as eBay began to sell more items at the Buy Now price than at auction, they had to drop that slogan. The joy of gain and of winning were no longer the key motivating factors in shopping there. It was the fear of missing out, especially on limited quantity items, and losing out by a cent or two on the auction at the last minute.

If youíre not already using LTOs in your marketing mix, try one and see how you can boost your sales and profits.


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