“Because we know that the things that are difficult to possess are typically better than those that are easy to possess, we can often use an item’s availability to help us quickly and correctly decide on its quality…
[Additionally,] as opportunities become less available, we lose freedoms; and we hate to lose the freedoms we already have… So, when increasing scarcity… interferes with our prior access to some item, we will react against the interference by wanting and trying to possess the item more than before.”
(Robert Cialdini extracted from the book Influence: The Psychology of Persuasion).
According to the Principle of Scarcity, people assign more value to opportunities when they are less available. The use of this principle for profit can be seen in such high-pressure sales techniques as a “limited number” now available; and a “deadline” set for an offer.
Such tactics persuade people that number and/or time restrict access to what is offered. The scarcity principle holds true for two reasons:
- Things difficult to attain are typically more valuable. And the availability of an item or experience can serve as a shortcut clue or cue to its quality.
- When something becomes less accessible, the freedom to have it may be lost.
According to psychological reactance theory, people respond to the loss of freedom by wanting to have it more. This includes the freedom to have certain goods and services. As a motivator, psychological reactance is present throughout the great majority of a person’s life span.
However, it is especially evident at a pair of ages: “the terrible twos” and the teenage years. Both of these periods are characterized by an emerging sense of individuality, which brings to prominence such issues as control, individual rights, and freedoms. People at these ages are especially sensitive to restrictions.
In addition to its effect on the valuation of commodities, the Principle of Scarcity also applies to the way information is evaluated. Research indicates that the act of limiting access to a message may cause individuals to want it more and to become increasingly favourable to it.
The latter of these findings, that limited information is more persuasive, seems the most interesting. In the case of censorship, this effect occurs even when the message has not been received. When a message has been received, it is more effective if it is perceived to consist of some type of exclusive information.
The scarcity principle is more likely to hold true under two optimizing conditions:
- Scarce items are heightened in value when they are newly scarce. That is, things have higher value when they have become recently restricted more than those than those things that were restricted all along have.
- People are most attracted to scarce resources when they compete with others for them.
It is difficult to prepare ourselves cognitively against scarcity pressures because they have an emotional quality that makes thinking difficult.
In defence, we might attempt to be alert regarding the sudden rush of emotions in situations involving scarcity. Perhaps this awareness may allow us to remain calm and take steps to assess the merits of an opportunity in terms of why we really want and objectively need.
How to Apply the Rule of Scarcity
- Make your promotions time limited.
- Make it known to potential clients that you have a limit to the number of clients that you can work with at any one time. Perhaps during a certain period of time… like each calendar quarter. So you let them know that you only work with 25 clients a quarter and if they are not within those 25 then they’ll need to go on a waiting list. To make the scarcity rule work for you, you need to have successfully applied most of the other key principles we have already mentioned… particularly ‘Authority’ and ‘Social Proof’.
- Limit the number of clients within the coaching groups you have and be sure to set up a waiting list. This is also beneficial for existing clients to be aware of. They will not want to leave something that means they could ‘miss out’.
- Respect your own time during sessions with clients. Don’t run overtime, place importance on the time you have, and let your clients understand this. ‘Helen we’ll need to finish up our session now, I have another commitment to keep at 12noon, but we can pick this up at our next session, which will be…’
- When you are promoting workshops, events or group session to potential or existing clients be sure to create an offer or call to action and place a time limit on the response date. Be one of the first 15 people to register by the 11th and you’ll receive the complete set of ‘Successful Coaching Case Studies’ valued at $119.95 for FREE.
Release a limited number of ‘exclusive’ spots in a product, service or event. Create a premium “Platinum” or “Gold” level service that’s ‘invitation’ only.