This article is about providing 2 tips in business. Simple tips that make sense and work well.
They are related to selling your stuff for more (or just selling more) and negotiating a little better (you’ll love this tip – you don’t actually have to do anything!).
Law of scarcity
I first saw this in action back in about 1994 when I was working in a friend’s stall at a thing called the Taste of Tasmania. The “Taste” was a little promotion by plenty of the food and wine people in my home city of Hobart, Tasmania.
The idea was you could go into this massive warehouse on the docks and it was set up so that for just a few dollars you could sample small portions of the most magnificent, mouth watering food and wine Tasmania has to offer (Tasmanian seafood, wine and beer are truly sensational).
The docks in Hobart is a special place in summer, combine that with the hustle and bustle of the yachts in the Sydney to Hobart and Melbourne to Hobart finishing and docking just a couple of feet in front of where you might be having a lazy lunch, and you have an amazing experience.
Chocolates and wine – get your chocolates and wine here!
Anyway… (got carried away reminiscing about my home town!), my friend was selling chocolate and wine. The wine was selling wonderfully well, but the chocolate not so great. The chocolate was superb – my friend handmade the chocolates herself and used the finest ingredients.
A handmade sign made all the difference
“Exclusive, handmade chocolates available ONLY at the Taste. Limit 1 per customer please.”
Sales soared immediately.
With those simple words we had implied that the chocolates were:
- in limited supply,
- and they were exclusive to the Taste.
If you can present your product or service as being in short supply, then demand will go up. And remember that it is the perception of the short supply (or the huge demand) that is important.
I’ll illustrate that point with another example – this one is from a client’s speech.
1988 EXPO in Brisbane, Australia
In 1988, Brisbane (Australia) held an EXPO. This is where major corporations or countries show off their wares to impress the public. It was a massive event at the time and generated extraordinary excitement.
So much so that from massive crowds grew massive queues outside most of the exhibition halls. All day, everyday.
Except for one very efficient corporation.
Their exhibition was just as good as anyone else’s. Maybe even better. And their organisation and logistical efforts were second to none.
No-one had to queue up, no one had to wait – everything ran like clockwork.
But numbers were down
Except for one issue. They weren’t getting half as many people to look at their exhibition as the others.
After careful deliberation, the person in charge of the exhibition figured out the reason and made a decision.
“Slow everyone down. Hold people up. I want queues forming outside this hall bigger than anywhere else. Just stall everyone.”
So that’s what they did. And the queues got bigger and bigger. And bigger. Until they had the biggest queues at the EXPO.
And then what happened was this.
People walking past noticed these massive queues (they had to walk around them after all) and wondered what was so great about that exhibition. Being curious, and not wanting to miss out on what was obviously one of the best exhibitions, they joined that queue. And made it bigger still.
That corporation had the one of the most successful exhibitions at the 1988 Brisbane EXPO because someone understood the law of scarcity!
The rarer people think it is, the more people want it
Now, not everyone believes me when I talk about the law of scarcity. But it’s true. Here’s my last example on this subject.
My lovely wife (Mel) and I were wandering through a restaurant district one night in our home town (place called Elizabeth St, North Hobart) trying to find a spot to eat. We walked past a place that looked a likely prospect and enquired after a table – we would have at least a 30 minute wait if we wanted a table, the kind waiter informed us.
We walked on.
We then walked past a restaurant that had just a solitary couple in it.
We decided (when I say “we”, I mean Mel) to return to the full one and wait that 30 minutes, because , in my wife’s mind, that first restaurant was “better” because it was harder to get in to eat.
That’s the law of scarcity right there