Episode 20

The Principle of Scarcity

Dennis shares his deep knowledge as a certified Cialdini Influence practitioner, explaining overlooked tactics around FOMO, inventorying your skills for leverage, emphasizing losses over gains, controlling access to information, and negotiation tips using scarcity. He stresses using scarcity ethically and not artificially manufacturing it.

Transcript
Dennis:

Hi, it's Dennis again.

Dennis:

This is Connect & Convert.

Dennis:

Insider strategies for small business sales success.

Dennis:

We have a topic today that I think all of us will find interesting.

Dennis:

I hope so.

Dennis:

It's called scarcity.

Dennis:

Scarcity.

Dennis:

Yeah.

Dennis:

What's scarcity.

Dennis:

But before we dive into that, I have a wonderful announcement.

Dennis:

Joining me today in this podcast and hopefully on subsequent podcasts,

Dennis:

if she likes it and can stand me is Leah Bumphrey, an esteemed colleague,

Dennis:

a fellow Wizard of Ads partner, a brilliant sales mind, an inspiring

Dennis:

writer, now my partner on the podcast.

Dennis:

I think Leah is going to provide a little different perspective.

Dennis:

We share a lot of the same thoughts on sales, but her perspective

Dennis:

is interesting and different.

Dennis:

Leah, please introduce yourself to our audience.

Leah:

Hey guys, I just.

Leah:

Pleased to Dennis.

Leah:

I love working with you.

Leah:

And yes, we come at at times on different topics from a different

Leah:

angle, but we both love radio.

Leah:

We both love having clients where we can make a difference and training

Leah:

is something that's important to us because we see that is a huge

Leah:

need and something that we can do joining you guys from here in Canada.

Leah:

And we're not that different.

Leah:

So this is going to be fun.

Dennis:

You're just a little colder and snowier than we are here in Florida.

Dennis:

That's all that's, that's not a problem is we can deal with that.

Leah:

Yeah, we'll, we'll be okay.

Dennis:

Okay.

Dennis:

Let's jump in F O M O FOMO.

Dennis:

You've heard of FOMO, FOMO, the fear of missing out.

Dennis:

That is one of the powerful driving forces that we know of in sales

Dennis:

marketing, the fear of missing out.

Dennis:

So today, Leah and I are going to do a deep dive.

Dennis:

Into one of Cialdini's, Robert Cialdini, Dr.

Dennis:

Robert Cialdini, the godfather of influence into one of his key principles,

Dennis:

and that is the principle of scarcity.

Dennis:

I will preface this by saying what you think about scarcity and what

Dennis:

you possibly know about scarcity may not be 100 percent on target.

Dennis:

I've got some new little Things that I want to share with you about scarcity.

Dennis:

I'm a founding member of the Cialdini Institute that was just recently formed.

Dennis:

I am a certified Cialdini Influence coach and practitioner, so I've done

Dennis:

a very deep dive into influence.

Dennis:

I'm now able to all of Dr.

Dennis:

Cialdini's information research, and I'm going to share a

Dennis:

lot of that with you today.

Dennis:

These principles are ethical.

Dennis:

And they're right there in the moment.

Dennis:

They're right there in the moment.

Dennis:

They don't need to be manufactured, but they're often overlooked.

Dennis:

Hopefully after today, that won't be the case.

Leah:

When you say overlooked, Dennis, that makes me think of Wizard Academy.

Leah:

Often overlooked as a, as a place to go for business.

Leah:

Or for training opportunities.

Leah:

Uh, they are a sponsor of our podcast, but there's a reason for that.

Leah:

You both have been exposed to Royce principles that really make

Leah:

sense when it comes to building business and the why of it.

Leah:

We don't want to overlook that.

Dennis:

I can't help but remember the first time I went to an academy.

Dennis:

The word I keep you, you know, it's transformation.

Dennis:

I know that word sometimes over, but it transformed the way I thought business.

Dennis:

I went with to, of course, taught by Michelle Miller, Marketing to Women.

Dennis:

My radio stations were very fiendish.

Dennis:

And I need to learn more about marketing to women.

Dennis:

And boy, did she change my brain.

Dennis:

I've been going back every year for over 20 years.

Dennis:

I never miss, uh, taking at least one course at the wizard Academy.

Dennis:

Uh, I can only ask our listeners to go to wizardacademy.

Dennis:

org, wizardacademy.

Dennis:

org.

Dennis:

And look at the menu, look at the offerings.

Leah:

There's just so much there.

Leah:

That it doesn't matter what industry, it doesn't matter if you're coming

Leah:

at it from the prospect or from the perspective of being a business owner, or

Leah:

someone trying to help business owners, there's something there that you need.

Leah:

I mean, there's even courses and I took my one of my sons to the young

Leah:

writers class, and that is held in the summer, and that's when.

Leah:

Probably 10 years ago now and he has continued to to go to the

Leah:

wizard academy because there's just so much there as he calls it.

Leah:

It's real learning.

Leah:

It's a little bit different than that university stuff.

Dennis:

But it's real learning, but it's done from perspective that gets inside

Dennis:

your brain and makes you think thoughts you've never thought before that you

Dennis:

need to think, but you never thought before, so give it a shot wizardacademy.

Dennis:

org.

Dennis:

Okay, let's jump into today's podcast.

Dennis:

Today's episode on scarcity.

Dennis:

Let me introduce the topic by telling you a bit of a story, and

Dennis:

see if you can relate to the story.

Dennis:

Let's say we could wind the clock back in the Dennis Wayback Machine, or the

Dennis:

Leah Wayback Machine, and tell someone that in the 70s and 80s, we could

Dennis:

wind back to the 70s and 80s and tell someone that in 40 years, people were

Dennis:

sleeping all night, camping out in front of a store to buy a cell phone.

Dennis:

What would you think of that, Leah?

Leah:

I would have laughed.

Leah:

I would not have thought that was possible.

Leah:

I'm thinking back in the late 80s I had one of those nice big cell phones.

Leah:

I was pretty trendy.

Leah:

Just, just clear and you know, with a bit of a brick and I can't

Leah:

believe I ever recycled that.

Leah:

I wish I still had to show my kids because they don't believe me.

Dennis:

They don't believe it.

Dennis:

I know I had many of those bricks, but iPhone, of course, transformed everything

Dennis:

for the the mobile phone business.

Dennis:

So here's an amazing story.

Dennis:

This is real.

Dennis:

Two women were in the iPhone line.

Dennis:

I don't remember which model that was new, but it was just announced

Dennis:

and it was announced as available.

Dennis:

One of them was in position number 23.

Dennis:

The other one was in position 21.

Dennis:

So fairly close.

Dennis:

They started a conversation.

Dennis:

21 gave 23 a compliment on her handbag.

Dennis:

"You have a beautiful bag."

Dennis:

It was an original.

Dennis:

Louis Vuitton worth thousands of dollars, probably like the one you carry, we

Dennis:

don't want to all depends on that.

Dennis:

I understand.

Dennis:

Well, anyway, number 23 replied, "Hey, you can have my bag.

Dennis:

If I can have your position in line", what she was move up two

Dennis:

positions from 23 to 21 and give her a multi thousand dollar bag.

Dennis:

She was asked later, what the heck were you thinking?

Dennis:

Um, and she said, hey, well, "I heard the store only had a limited number of new

Dennis:

iPhone and I did not want this my chance to get that iPhone on the very first day."

Leah:

That's what you call first world scarcity.

Leah:

My goodness.

Dennis:

Yes.

Dennis:

First world problems.

Leah:

And I'm assuming that they both ended up getting their, uh, their phone.

Dennis:

Story that I have didn't go that far, but I would assume

Dennis:

they did, but I know 21, the one who was 23 and swapped the 21.

Dennis:

She got one for sure.

Dennis:

Okay.

Dennis:

I think 23 got one too.

Dennis:

So powerful.

Dennis:

How do we use this in sales?

Dennis:

Leah, have you ever had any experience with using the principle of scarcity?

Dennis:

The fact that there are only a few of these available.

Leah:

Absolutely.

Leah:

And you always have to be cautious when doing it, because

Leah:

if, if there isn't scarcity.

Leah:

Then you look like a salesperson who just cares about the sale, but if you have an

Leah:

actual situation where there is a limited number of products or a concern about that

Leah:

limiting, uh, limiting inventory, then it's real and you can make a difference.

Leah:

I think you and I both come from a radio background.

Leah:

And when I started in radio, and that's almost three decades ago, the idea

Leah:

that there was a limited inventory, we couldn't just add paper, remember back

Leah:

to the newspapers, a lot of ads, you could add more, you could find filler

Leah:

content, you can't do that in radio, you can't take away the announcers,

Leah:

you can't take away the music or the talk, so there's so many ads, and once

Leah:

those ads are gone, you're finished.

Dennis:

Well, you're right.

Dennis:

Scarcity is a big deal in the radio business, and, uh, we talked, we've

Dennis:

talked about this in other episodes, but, uh, You mentioned something about

Dennis:

those who say it is scarce when it isn't.

Dennis:

One of the things that Dr.

Dennis:

Cialdini, when he brought us into the Cialdini Institute, said, and

Dennis:

repeats and repeats and repeats, You must use influence ethically.

Dennis:

There are unethical ways to use it.

Dennis:

And ethical ways.

Dennis:

He said, everything that I will teach you can be used either

Dennis:

for the good or for the bad.

Dennis:

He said, your obligation as a professional as a certified Chaldean

Dennis:

professional is to use it for the good.

Dennis:

And I take that quite seriously.

Dennis:

So,

Leah:

There are, there's humor, everything from, from context or

Leah:

to just conversations and stories that we share with friends where a

Leah:

salesperson has tried to stop us on price has tried to say, you know what?

Leah:

I only have so many of these available.

Leah:

I've got a little old lady.

Leah:

That's been looking at this house for a while.

Leah:

We know we, we are much more educated buyers than ever before and all

Leah:

of us, from whatever perspective, we realize that that's total BS.

Leah:

Even the people saying that know that works.

Dennis:

And unethical you and today we want to talk about

Dennis:

the ethical use of scarcity.

Dennis:

Are there ways that you can scarcity that are ethical and effective?

Dennis:

And I'll start with what makes you have you ever done an inventory

Dennis:

of your company or of yourself?

Dennis:

What rare talents?

Dennis:

What skills?

Dennis:

What abilities?

Dennis:

Do you or your company possess?

Dennis:

Let's give an example of athletes.

Dennis:

This is one of the favorite topics of my wife.

Dennis:

She doesn't understand how professional athletes can make all that money.

Dennis:

Okay.

Dennis:

She said, it's not right.

Dennis:

It's not fair.

Dennis:

That should be for the teachers and she's not totally wrong, but why?

Dennis:

Okay.

Dennis:

Leah, why do athletes, professional athletes make so much money?

Leah:

It's a business, it's an absolute business.

Leah:

They're making money because the business then is able to make money because there's

Leah:

not that many athletes at that level.

Dennis:

There it is.

Dennis:

Uh, it's a number one.

Dennis:

It's a business and it's a capitalist business what the market will bear.

Dennis:

But what they do is scarce.

Dennis:

I'm a big fan of NFL football.

Dennis:

I know you guys in Canada.

Dennis:

You don't care about that.

Dennis:

So.

Leah:

Are you kidding?

Leah:

That is that it's a hot ticket.

Leah:

If you come to my house on a Sunday, my husband all over all the time.

Dennis:

I'm a Miami Dolphins fan, through and through, spent all of

Dennis:

the last several, many decades in Florida and in Miami and Tyreek

Dennis:

Hill, Tyreek Hill is my example.

Dennis:

This dude is one of the greatest athletes, I think that I've ever observed.

Dennis:

He runs track meets, he runs circles around, he's the

Dennis:

fastest player in the NFL.

Dennis:

Okay.

Dennis:

And he's thankfully a Miami Dolphin and he, and, Tua Tagovailoa they have

Dennis:

teamed up to a one, two combination.

Dennis:

And they both are paid multi millions of dollars because what they do, almost

Dennis:

nobody else can do, and it's a business.

Dennis:

So they are unique.

Dennis:

And their talents are scarce.

Dennis:

So I, I invite you inventory your personal story.

Dennis:

I'll bet when you go back and look at yourself, you have some

Dennis:

experiences or your company has had some experiences that are unique.

Dennis:

There's something that no one else has.

Dennis:

Find out what's your creative superpower.

Dennis:

Okay.

Dennis:

Quality creative output is scarce.

Dennis:

For instance, in our business, Leah, uh, writing.

Dennis:

Creating great commercials, spots, uh, talk a little bit about that.

Dennis:

How scarce is that someone who can actually write and produce

Dennis:

a really good radio spot?

Leah:

You know, that's the backbone of any of any campaign, is to be able to

Leah:

tell the message of the business in a way that is not just advertising the industry.

Leah:

We live in a world where conformity at some point became.

Leah:

So overwhelmingly important to people, especially to kids,

Leah:

and we can see this happening.

Leah:

Everyone thinks that they're being unique by being different by being the same.

Leah:

That's not what we're talking about.

Leah:

So if we're talking about, let's take a commodity like insurance.

Leah:

So insurance is insurance is insurance, but if you're selling insurance,

Leah:

Dennis, it's going to be a lot different than how I would sell insurance.

Leah:

And those differences are important because for everybody selling it

Leah:

for everyone providing that service, there is also different types of

Leah:

people that require it and you're going to feel comfortable with it.

Leah:

So, when you hear these ads, and it's about, you know, in, in

Leah:

certain business for 25 years, we have free parking and located.

Leah:

A whole bunch of businesses that can say that.

Dennis:

Yeah, that's not really that's not scarce, is it?

Dennis:

And that's what that's what you hear on radio ads these days.

Dennis:

TV ads.

Dennis:

We're the biggest.

Dennis:

We're the largest.

Dennis:

We're the best.

Dennis:

We have more selection.

Dennis:

Who can't say that?

Dennis:

What is it that you say about your business that no one else can say?

Dennis:

What's that superpower?

Dennis:

That's the thing we need to look for to exercise the principle of scarcity,

Dennis:

something that no one else has.

Dennis:

So also, it can be a unique perspective.

Dennis:

Maybe you or your business, you have a perch that's different than

Dennis:

other people in your industry.

Dennis:

Uh, you know, two people can view the same event and describe it totally differently.

Dennis:

How is your perspective?

Dennis:

And here's another one.

Dennis:

What you Relationships.

Dennis:

Do you have?

Dennis:

Who do you know?

Dennis:

We've talked about this before.

Dennis:

Do you have relationships with people that are scarce that are valuable and scarce?

Dennis:

Hey, those kind of scarce relationship and contacts.

Dennis:

Those are leverage.

Dennis:

Those can put you in a different ballgame.

Dennis:

And yet they're always there in the situation.

Dennis:

We rarely think of them.

Leah:

As a business owner, it is critically important that you And

Leah:

that you are excited about the things that make you different.

Leah:

Otherwise, why are you in business?

Leah:

Think about a franchise.

Leah:

Even, why would you go to that McDonald's versus the other McDonald's?

Leah:

Location, that's about it, right?

Leah:

But they're different than any other, uh, than a Taco Bell or a Taco Con.

Leah:

So that becomes their unique selling proposition.

Leah:

But when you're talking about the lifeblood of business and family

Leah:

businesses, that little bit of difference that we bring to it

Leah:

individually, that's Is is everything.

Dennis:

That could be your scarcity.

Dennis:

Claim it.

Dennis:

If it just sits there under the bushel, as they say, and never

Dennis:

open it, it doesn't help you.

Dennis:

You've got to claim it.

Dennis:

So let's jump to another topic real quick about scarcity.

Dennis:

I get this a lot.

Dennis:

People ask me this question, what motivates more the joy of the

Dennis:

game or the pain of the loss?

Dennis:

Okay.

Dennis:

Well.

Dennis:

Science based again.

Dennis:

All of Cialdini's work is science based and therefore all of what

Dennis:

I tell you is science based.

Dennis:

Loss aversion.

Dennis:

Studies are very clear.

Dennis:

The pain of losing something is twice as powerful as the joy of

Dennis:

gaining something of equal value.

Dennis:

Equal value.

Dennis:

Great story.

Dennis:

They were doing a home bill study in California.

Dennis:

They were going door to door to assess energy use.

Dennis:

They had three messages.

Dennis:

Message one.

Dennis:

By installing more insulation and solar panels on your house,

Dennis:

you can reduce your energy bill.

Dennis:

Message two.

Dennis:

If you take this proposal, you will save XXX amount of dollars in energy per month.

Dennis:

Message three.

Dennis:

If you don't take advantage of this offer, you will continue to lose.

Dennis:

To lose X access per month, Leah, what do you think was effective

Dennis:

message and getting someone to comply with the request?

Leah:

Oh, definitely the last frame take this bond that makes

Leah:

all the difference in the world.

Dennis:

Science is very clear loss framing in that particular research

Dennis:

had 150, 150 increase in guesses.

Dennis:

It's the same money.

Dennis:

It's different frame.

Dennis:

The money was the same.

Dennis:

Okay, but a different frame.

Dennis:

Losses get our attention.

Dennis:

They're visible.

Dennis:

The downside of something, something not happening is more salient to our brain.

Dennis:

Benefits of a potential game in sales.

Dennis:

And maybe you found yourself doing this.

Dennis:

I know I have, I'm always, you know, being the optimist.

Dennis:

I want to tell you about what you could gain, what you could win, but

Dennis:

wouldn't it be better, maybe more successful in sales if we emphasize

Dennis:

what the client stands lose.

Dennis:

If they don't act, how do you, how do you see that, Leah?

Dennis:

Have you had experience with that?

Leah:

Well, you know what?

Leah:

It's interesting because like having a premium attached to a purchase.

Leah:

So let's take it out of the business venue and you're going to buy something.

Leah:

And if you buy this bottle of whiskey, here's your price, but if they're, they

Leah:

have a limited amount of the whiskeys with glasses associated with them.

Leah:

Same price.

Leah:

Well, you got to buy it now because you know, it's going to be, you're

Leah:

going to be gone where you don't want to lose out that opportunity.

Leah:

I don't need any glasses, but trust me.

Leah:

And I don't think many of us do, but if you have that opportunity to

Leah:

get a little something extra, you're going to move in that direction.

Leah:

It also makes me think of kids.

Leah:

When you have little kids that are eating supper, they don't want to eat it.

Leah:

And then you can get dessert.

Leah:

Now I'm not advocating that.

Leah:

But doesn't it work?

Leah:

Who's that broccoli's going down if you know the cookie doesn't come

Leah:

after because there's that fear of loss You really want the cookie?

Leah:

I'll choke back the broccoli.

Dennis:

The FOMO the fear Missing out, right?

Dennis:

Yeah, absolutely Good good examples.

Dennis:

Let's let's jump to our final uh notion today about scarcity.

Dennis:

Um, What things do you control that have limited access?

Dennis:

And or limited availability i'll bet more than So let me

Dennis:

start with the first example.

Dennis:

I always get asked this question too.

Dennis:

Should I emphasize limited time or limited quantity?

Dennis:

Which one of those is more persuasive?

Dennis:

Which one executes scarcity or are they the same?

Dennis:

You have five minutes to take advantage of this fabulous offer

Dennis:

or there are only five items left.

Dennis:

Act fast.

Dennis:

What do you think, Leah?

Leah:

The tangible is the item.

Leah:

We're all used to being time start.

Leah:

So if somebody tells me, I'm just as likely to go.

Leah:

Hey, I don't need it that much.

Leah:

I don't want I don't want that pressure.

Leah:

I don't want to be elbowing some woman with a little out of the way,

Leah:

but if you tell me there's only so many available, what if I need this?

Leah:

What if one of my kids needs it?

Leah:

What if my husband needs it?

Leah:

My goodness, I better grab one of these because there's an opportunity with

Leah:

having something with a lot of them.

Dennis:

Well, guess what?

Dennis:

You are on the side of science.

Dennis:

There is no question.

Dennis:

They both can be persuasive when used properly, but limited

Dennis:

quantity, limited quantity always test better than limited time.

Dennis:

So if you're in a, if you're in a conundrum about what to use and

Dennis:

ad or how to use in sales, uh, limited quantity beats limited time.

Dennis:

How about information?

Dennis:

You know, this is a part that most people never even think of

Dennis:

information that you control, that you create, uh, that you curate.

Dennis:

Information can be fierce.

Dennis:

What information do you possess or does your company possess

Dennis:

that's unique, proprietary, not readily or equally available?

Dennis:

Maybe you have a proprietary database, a certain technique that you have perfected

Dennis:

and own a system that only you offer.

Dennis:

What is that thing?

Dennis:

What is that thing?

Dennis:

What is that scarcity of information that you?

Dennis:

Yes, another twist on this.

Dennis:

I have some some people that I talked to about this and they will refuse to offer

Dennis:

a sales proposal, a proposal for business.

Dennis:

If they don't have enough, they make their proposal scarce.

Dennis:

They will not submit.

Dennis:

A price, a program, a presentation until they have appropriate information.

Dennis:

Another use of scarcity.

Dennis:

Okay.

Leah:

That makes a lot of sense because we're talking

Leah:

about ethical use of scarcity.

Leah:

Yes.

Leah:

And the ethical thing I can think of is the Ability and

Leah:

the desire and offer to share.

Leah:

Right, if I need some help with something again, Dennis,

Leah:

I could give you a shout and.

Leah:

If it's an area that, you know, I know you're going to

Leah:

share that information with me.

Leah:

I don't have it.

Leah:

I'm going to ask, but as a business, if you offer that, you're willing to

Leah:

offer the fact that you have this, this, and this is not available.

Leah:

I mean, that's the information is the cabbage patch tip of the eighties.

Leah:

Remember when?

Leah:

That was a big deal.

Dennis:

Memories of horror.

Leah:

I see a little nervous twitch happening there.

Dennis:

I couldn't get those for my kids and I was a bad daddy, you know?

Dennis:

Scarcity, but it's real.

Dennis:

And what you just said is real.

Dennis:

So let's close out.

Dennis:

I want to give, let's give our listeners a bonus today.

Dennis:

You think we should give them a bonus?

Dennis:

Let's give them a bonus.

Dennis:

One more, one last thought on scarcity.

Dennis:

How to increase your chances of winning when negotiation.

Dennis:

Now we all get into big negotiations, little negotiations.

Dennis:

I'm talking about any negotiation.

Dennis:

Okay.

Dennis:

So you're in a negotiation.

Dennis:

You get hung up on some fairly minor detail.

Dennis:

Okay.

Dennis:

That happens all the time.

Dennis:

You, the big things are falling in line, but there's just a few little things

Dennis:

that just you can't reach agreement.

Dennis:

I'm going to suggest to you, you try turning it around.

Dennis:

Most of us would say, well, until you do XYZ, we don't have a deal.

Dennis:

What does Dr.

Dennis:

Cialdini teach us based on research science?

Dennis:

We have a deal.

Dennis:

You just need to do XYZ.

Dennis:

Now you've set up a lose situation, haven't you?

Dennis:

You've set up a loss situation.

Dennis:

We have a deal.

Dennis:

You just need to do this.

Leah:

You don't, you don't recommend giving them a signing pen?

Dennis:

Of course that's, but Leah, I don't mean to be

Dennis:

rude, but that's old school.

Dennis:

There are, in my opinion, we'll do a podcast on that.

Dennis:

Okay, I love that.

Dennis:

Here's the pen.

Dennis:

Just sign here.

Dennis:

Oh my gosh.

Leah:

Keep the pen.

Dennis:

Oh my.

Dennis:

Dr.

Dennis:

Cialdini personally stands behind the advice I just gave you.

Dennis:

This comes direct from the doctor.

Dennis:

Okay.

Dennis:

We have a deal.

Dennis:

You just need to do this.

Dennis:

He has clients of his that have 100 percent success with that technique.

Dennis:

And nothing works 100 percent of the time, but in this case, it does.

Dennis:

Try it.

Dennis:

You'll like it.

Dennis:

So that's a pretty deep dive into scarcity.

Dennis:

Scarcity is your friend.

Dennis:

If used ethically, it gives you leverage.

Dennis:

It's in situations.

Dennis:

Go through the checklist that we recommended today.

Dennis:

You're going to find scarcity in life.

Dennis:

Okay, that does it for Connect & Convert, our deep dive into scarcity.

Dennis:

We share insider strategies for small business sales success.

Dennis:

Leah and I will be back soon.

Dennis:

Tune back in soon.

Dennis:

We'll be back.

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About the Podcast

Show artwork for Connect & Convert: The Sales Accelerator Podcast
Connect & Convert: The Sales Accelerator Podcast
Insider Strategies for Small Business Sales Success

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About your hosts

Profile picture for Dennis Collins

Dennis Collins

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Paul Boomer

I help businesses grow up after they've grown their revenue. Think about that for a moment. You'll understand what I mean.