Scarcity…How I Love Thee

Scarcity increases demand. Consider: people fall in love with those who could care less, banks give money to those that don’t need it, and people don’t want to go to a party if you are begging them (clubs and restaurants make fake lines out the door while having plenty of empty tables inside), etc. It is a funny law of human behavior.

As a rule, if an item is rare or becoming rare, it is more valuable. As something becomes less available to us, we feel loss of freedom and that makes us want it even more. Think about the times that someone has tried to keep you from taking the time to think a deal over by scaring you into believing you can’t have it later because the thing you want will probably be gone…what is your response (probably depends on how badly you want it).

Here are some ways this is used against us everyday:

  • Companies like Apple complain that they can never fully satisfy demand
  • Bitcoin: US $ can be printed, but there are only so many Bitcoin to be had
  • Salesmen push for you to buy now as another person wants to buy it too… no time to wait
  • Politicians may say something detrimental to them has been censored so they can’t speak about it (now we really want to know)
  • Declarations of inadmissibility in the courtroom usually have opposite effects on jurors
  • Auctions: sometimes they tend to a bidding frenzy beyond all reason…if the other guy wants it that bad then I want it more 

     

     

2 really great experiments in the book Influence by Robert Cialdini:

  1. Beef in short supply: a control was asked to buy beef and told nothing. Another was told of a future scarcity and bought two times as much. However, the customers that were told individually of this “exclusive” information bought 6X as much. The fact that the news of the scarcity was made scarce was even more persuasive.
  2. Cookie shortage: participants were given cookies… both groups were told that the organizers had to take some back but one group was told it was because of a mistake and the other was told because they were in high demand by other testers. The ones in the highest demand were deemed by all to be more valuable and desirable.

One way to maintain long term demand for your product is to never totally satisfy the demand. This applies to dealing with people as well. Make yourself less accessible and you increase the value of your presence…the ardor of an indifferent lover surges with the appearance of a rival.

 

 

 

 

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