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Dennis Collins: Hi, it’s Dennis again. This is Connect & Convert. Insider strategies for small business sales success. We have a topic today that I think all of us will find interesting. I hope so. It’s called scarcity. What’s scarcity? Before we dive into that, I have a wonderful announcement. Joining me today in this podcast and hopefully on subsequent podcasts, if she likes it and can stand me is Leah Bumphrey, an esteemed colleague, a fellow Wizard of Ads partner, a brilliant sales mind, an inspiring writer, now my partner on the podcast. I think Leah is going to provide a little different perspective. We share a lot of the same thoughts on sales, but her perspective is interesting and different.

Leah, please introduce yourself to our audience.

Leah Bumphrey: I’m pleased to Dennis. I love working with you. And yes, we come at times on different topics from a different angle, but we both love radio. We both love having clients where we can make a difference and training is something that’s important to us because we see that is a huge need and something that we can do by joining you guys from here in Canada.

And we’re not that different. So this is going to be fun.

Dennis Collins: You’re just a little colder and snowier than we are here in Florida. That’s all that’s, that’s not a problem is we can deal with that.

Leah Bumphrey: Yeah, we’ll, we’ll be okay.

Dennis Collins: Okay. Let’s jump in FOMO. You’ve heard of FOMO, the fear of missing out. That is one of the powerful driving forces that we know of in sales and marketing, the fear of missing out.

So today, Leah and I are going to do a deep dive into one of Cialdini’s — Dr. Robert Cialdini, the godfather of influence — one of his key principles. And that is the principle of scarcity. I will preface this by saying what you think about scarcity and what you possibly know about scarcity may not be 100 percent on target. I’ve got some new little things that I want to share with you about scarcity.

I’m a founding member of the Cialdini Institute which was just recently formed. I am a certified Cialdini Influence coach and practitioner, so I’ve done a very deep dive into influence. I’m now able to use all of Dr. Cialdini’s information research, and I’m going to share a lot of that with you today.

These principles are ethical. And they’re right there in the moment. They don’t need to be manufactured, but they’re often overlooked. Hopefully, after today, that won’t be the case.

Let me introduce the topic by telling you a bit of a story, and see if you can relate to the story. Let’s say we could wind the clock back in the Dennis Wayback Machine, or the Leah Wayback Machine, we could wind back to the 70s and 80s and tell someone that in 40 years, people were sleeping all night, camping out in front of a store to buy a cell phone. What would you think of that, Leah?

Leah Bumphrey: I would have laughed. I would not have thought that was possible. I’m thinking back in the late 80s I had one of those nice big cell phones. I was pretty trendy. Just clear and a bit of a brick and I can’t believe I ever recycled that. I wish I still had to it show my kids because they don’t believe me.

Dennis Collins: They don’t believe it. I know I had many of those bricks. B the iPhone, of course, transformed everything for the mobile phone business. So here’s an amazing story. This is real. Two women were in the iPhone line. I don’t remember which model was new, but it was just announced and it was announced as available. One of them was in position number 23. The other one was in position 21. So fairly close. They started a conversation. 21 gave 23 a compliment on her handbag. “You have a beautiful bag.” It was an original. Louis Vuitton is worth thousands of dollars, probably like the one you carry, we don’t want to all depend on that. I understand. Well, anyway, number 23 replied, “Hey, you can have my bag. If I can have your position in line”, she was moved up two positions from 23 to 21 and given a multi-thousand dollar bag. She was asked later, what the heck were you thinking? And she said, hey, well, “I heard the store only had a limited number of new iPhones and I did not want to lose my chance to get that iPhone on the very first day.”

Leah Bumphrey: That’s what you call first-world scarcity. My goodness.

Dennis Collins: Yes. First-world problems.

Leah Bumphrey: And I’m assuming that they both ended up getting their phone.

Dennis Collins: The story that I have didn’t go that far, but I would assume they did, I know 21, the one who was 23 and swapped the 21. She got one for sure. Okay. I think 23 got one too. So it’s powerful. How do we use this in sales? Leah, have you ever had any experience with using the principle of scarcity? The fact that there are only a few of these available.

Leah Bumphrey: Absolutely. And you always have to be cautious when doing it, because if, there isn’t scarcity then you look like a salesperson who just cares about the sale. But if you have an actual situation where there is a limited number of products or a concern about limiting inventory, then it’s real and you can make a difference.

I think you and I both come from a radio background. And when I started in radio, and that’s almost three decades ago, the idea that there was a limited inventory, we couldn’t just add paper. Remember back to the newspapers, a lot of ads, you could add more, you could find filler content, but you can’t do that in radio. You can’t take away the announcers, you can’t take away the music or the talk, so there’s only so many ads, and once those ads are gone, you’re finished.

Dennis Collins: Well, you’re right. Scarcity is a big deal in the radio business, and we’ve talked about this in other episodes. But you mentioned something about those who say it is scarce when it isn’t.

One of the things that Dr. Cialdini, when he brought us into the Cialdini Institute, said, and repeats and repeats and repeats, is that you must use influence ethically.

There are unethical ways to use it and ethical ways. He said, everything that I will teach you can be used either for the good or for the bad. He said, your obligation as a certified Cialdini professional is to use it for the good. And I take that quite seriously.

Leah Bumphrey: There’s so much humor on this — everything from conversations and stories that we share with friends where a salesperson has tried to stop us on price and has tried to say, “You know what? I only have so many of these available. I’ve got a little old lady. That’s been looking at this house for a while.” You know, we are much more educated buyers than ever before and all of us, from whatever perspective, realize that that’s total BS.

Dennis Collins: And unethical. And today we want to talk about the ethical use of scarcity. Are there ways that you can scarcity that are ethical and effective? And I’ll start with what makes you have you ever done an inventory of your company or of yourself?

What rare talents? What skills? What abilities do you or your company possess?

Let’s give an example of athletes. This is one of the favorite topics of my wife. She doesn’t understand how professional athletes can make all that money. She said it’s not right. It’s not fair. That should be for the teachers. And she’s not totally wrong, but why? Okay. Leah, why do professional athletes make so much money?

Leah Bumphrey: It’s a business, it’s an absolute business. They’re making money because the business then is able to make money because there are not that many athletes at that level.

Dennis Collins: There it is. It’s a business and it’s a capitalist business that the market will bear. But what they do is scarce. I’m a big fan of NFL football. I know you guys in Canada, y don’t care about that.

Leah Bumphrey: Are you kidding? That is a hot ticket. If you come to my house on a Sunday, my husband is all over it all the time.

Dennis Collins: I’m a Miami Dolphins fan, through and through. Spent all of the last many decades in Florida and in Miami and Tyreek Hill is my example. This dude is one of the greatest athletes I think that I’ve ever observed. He runs track meets, he runs circles around them. And he’s the fastest player in the NFL. And he’s thankfully a Miami Dolphin and he and Tua Tagovailoa have teamed up for a one-two combination. And they both are paid multi-millions of dollars because of what they do, almost nobody else can do, and it’s a business. So they are unique. And their talents are scarce. So, I invite you to inventory your personal story. I’ll bet when you go back and look at yourself, you have some experiences or your company has had some experiences that are unique. There’s something that no one else has. Find out what’s your creative superpower.

Quality creative output is scarce. For instance, in our business, Leah, there’s writing. Creating great commercials, spots, can you talk a little bit about that. How scarce is it that someone can actually write and produce a really good radio spot?

Leah Bumphrey: You know, that’s the backbone of any campaign, to be able to tell the message of the business in a way that is not just advertising the industry. We live in a world where conformity at some point became so overwhelmingly important to people, especially to kids, and we can see this happening.

Everyone thinks that they’re being unique and being different while being the same. That’s not what we’re talking about. So if we’re talking about, let’s take a commodity like insurance. So insurance is insurance is insurance. But if you are selling insurance, Dennis, it’s going to be a lot different than how I would sell insurance. And those differences are important because for everybody selling it, there are also different types of people that require it, and that are going to feel comfortable with it. So, when you hear these ads, it’s about “We’ve been in this certain business for 25 years, we have free parking and we’re conveniently located.” A whole bunch of businesses can say that.

Dennis Collins: Yeah, that’s not really scarce, is it? And that’s what you hear on radio ads these days. TV ads. “We’re the biggest. We’re the largest. We’re the best. We have more selection.” Who can’t say that? What is it that you say about your business that no one else can say? What’s that superpower? That’s the thing we need to look for to exercise the principle of scarcity, something that no one else has. So also, it can be a unique perspective. Maybe you or your business, have a perk that’s different than other people in your industry. You know, two people can view the same event and describe it totally differently. What is your perspective?

And here’s another one. What relationships do you have? Who do you know? We’ve talked about this before. Do you have relationships with people that are valuable, and scarce? Hey, that kind of scarce relationship and contacts, those are leverage. Those can put you in a different ballgame. And yet they’re always there in the situation. We rarely think of them.

Leah Bumphrey: As a business owner, it is critically important that you are excited about the things that make you different. Otherwise, why are you in business? Think about a franchise. Why would you go to that McDonald’s versus the other McDonald’s?

Location, that’s about it, right? But they’re different than a Taco Bell. So that becomes their unique selling proposition. But when you’re talking about the lifeblood of business and family businesses, that little bit of difference that we bring to it individually, that is everything.

Dennis Collins: That could be your scarcity. Claim it. If it just sits there under the bushel, as they say, and nobody ever opens it, it doesn’t help you. You’ve got to claim it. So let’s jump to another topic real quick about scarcity.

I get this a lot. People ask me this question, what motivates more — the joy of the game or the pain of the loss? Well let’s be science-based again. All of Cialdini’s work is science-based and therefore all of what I tell you is science-based.

Loss aversion. Studies are very clear. The pain of losing something is twice as powerful as the joy of gaining something of equal value. Great story. They were doing a home bill study in California. They were going door to door to assess energy use. They had three messages.

Message one. By installing more insulation and solar panels on your house, you can reduce your energy bill.

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

Message three. If you don’t take advantage of this offer, you will continue to lose X amount per month.

Leah, what do you think was the most effective message in getting someone to comply with the request?

Leah Bumphrey: Oh, definitely the loss frame. That makes all the difference in the world.

Dennis Collins: The science is very clear that loss framing in that particular research had 150 increase in yeses. It’s the same money but it’s a different frame.

Losses get our attention. They’re visible.

The downside of something not happening is more salient to our brain than the benefits of a potential gain. In sales, maybe you found yourself doing this, I know I have. I’m always being the optimist. I want to tell you about what you could gain, and what you could win. But wouldn’t it be better, maybe more successful in sales if we emphasize what the client stands to lose if they don’t act? How do you see that, Leah? Have you had experience with that?

Leah Bumphrey: Well, you know what? It’s interesting because it’s like having a premium attached to a purchase. So let’s take it out of the business venue and you’re going to buy something. And if you buy this bottle of whiskey, here’s your price. But if they have a limited amount of the whiskeys with glasses associated with them for that same price? Well, you got to buy it now because they’re going to be gone where you don’t want to lose out on that opportunity. I don’t need any glasses, and I don’t think many of us do, but if you have that opportunity to get a little something extra, you’re going to move in that direction.

It also makes me think of kids. When you have little kids that are eating supper, they don’t want to eat it. And then you can get dessert. Now I’m not advocating that. But doesn’t it work? That broccoli’s going down if you know the cookie doesn’t come until after because there’s that fear of loss. You really want the cookie? I’ll choke back the broccoli.

Dennis Collins: The FOMO the fear of missing out, right? Yeah, absolutely. Good examples. Let’s jump to our final notion today about scarcity. What things do you control that has limited access or limited availability? So let me start with the first example.

I always get asked this question too. Should I emphasize limited time or limited quantity? Which one of those is more persuasive? Which one executes scarcity or are they the same? You have five minutes to take advantage of this fabulous offer or there are only five items left. Act fast. What do you think, Leah?

Leah Bumphrey: The tangible is the item. We’re all used to being time-starved. So if somebody tells me, I’m just as likely to go. Hey, I don’t need it that much. I don’t want that pressure. I don’t want to be elbowing some woman out of the way. But if you tell me there’s only so many available, what if I need this?

What if one of my kids needs it? What if my husband needs it? My goodness, I better grab one of these because there’s an opportunity to have something when there’s not a lot of them.

Dennis Collins: Well, guess what? You are on the side of science. There is no question. They both can be persuasive when used properly, but limited quantity always tests better than limited time.

So if you’re in a conundrum about what to use in an ad or how to use it in sales, limited quantity beats limited time. How about information? You know, this is a part that most people never even think of information that you control, that you create, that you curate. Information can be scarce.

What information do you possess, or does your company possess that’s unique, proprietary, not readily or equally available? Maybe you have a proprietary database, a certain technique that you have perfected, and own a system that only you offer. What is that thing? What is that scarcity of information that you have?

Yes, another twist on this. I have some people that I talked to about this and they will refuse to offer a sales proposal, a proposal for business, if they don’t have enough information. They make their proposal scarce. They will not submit a price, a program, a presentation until they have the appropriate information.

Another use of scarcity.

Leah Bumphrey: That makes a lot of sense because we’re talking about the ethical use of scarcity. Yes. And the ethical thing I can think of is the ability and the desire and offer to share. Right, if I need some help with something again, Dennis, I could give you a shout. If it’s an area that I know you’re going to share that information with me and I don’t have it. I’m going to ask, but as a business, if you offer that, you’re willing to offer the fact that you have this and this is not readily available. I mean, the information is the Cabbage Patch Kids of the eighties. Remember when that was a big deal?

Dennis Collins: Memories of horror.

Leah Bumphrey: I see a little nervous twitch happening there.

Dennis Collins: I couldn’t get those for my kids and I was a bad daddy, you know? Scarcity, but it’s real. And what you just said is real.

So let’s close out. Let’s give our listeners a bonus today. One last thought on scarcity.

How to increase your chances of winning when negotiating. Now we all get into big negotiations, little negotiations. I’m talking about any negotiation. So you’re in a negotiation. You get hung up on some fairly minor detail. That happens all the time. The big things are falling in line, but there are just a few little things that just you can’t reach an agreement on.

I’m going to suggest that you try turning it around. Most of us would say, well, until you do XYZ, we don’t have a deal. What does Dr. Cialdini teach us based on research science? We have a deal. You just need to do XYZ. Now you’ve set up a loss situation, haven’t you? You’ve set up a loss situation.

We have a deal. You just need to do this.

Leah Bumphrey: You don’t recommend giving them a signing pen?

Dennis Collins: Of course, but Leah, I don’t mean to be rude, but that’s old school. We’ll do a podcast on that. Okay, I love that. Here’s the pen. Just sign here. Oh my gosh.

Leah Bumphrey: Keep the pen.

Dennis Collins: Oh my. Dr. Cialdini personally stands behind the advice I just gave you. This comes directly from the doctor. Okay. We have a deal. You just need to do this. He has clients of his that have 100 percent success with that technique. Nothing works 100 percent of the time, but in this case, it does. Try it. You’ll like it.

So that’s a pretty deep dive into scarcity. Scarcity is your friend. If used ethically, it gives you leverage. Go through the checklist that we recommended today. You’re going to find scarcity in life.

Okay, that does it for Connect & Convert, our deep dive into scarcity. We share insider strategies for small business sales success. Leah and I will be back soon. Tune back in soon.

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