“There’s a lot more that scarcity does for businesses in a positive way, which helps drive revenue and it helps build that customer loyalty and it builds those deep relationships with customers.” – Mindy Weinstein in today’s Tip 1506
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Scott Ingram: You’re listening to the Daily Sales Tips podcast and I’m your host, Scott Ingram. Today’s tip comes from Mindy Weinstein. Mindy is the author of The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions. Mindy has trained thousands of marketing and sales professionals from organizations of all sizes, including Facebook, The Weather Channel, and World Fuel Services. She also has a Ph.D. in general psychology. Here she is:
Mindy Weinstein: If you have ever waited in line at a popular restaurant or purchased something because there were only five left, or here’s one more, purchased toilet paper during the pandemic and purchased it in bulk because you’re worried about it running out. Well, then you experience scarcity. And most of us, when we think about scarcity, we think about it in a negative way. But really, if a business uses it in a creative and ethical manner, can actually do some positive things for customers. And I’ll give you an example of a couple of them. But do know all of this is based on psychological research. Plus, businesses are doing this right now.
So number one, scarcity can actually build communities. When there’s scarcity messages that are showing that something’s in limited supply or exclusive and a customer is able to purchase that software or that product or that service for their business, well, they’re going to automatically feel special. They’re going to feel a sense of belonging that they are now part of the group. They are part of this group of customers who are able to experience these great products or services. But at the same time, community can also be built if there’s any exclusivity.
And here’s what I mean by that. A lot of businesses have found success by doing VIP events where they invite their top-tier customers to come and enjoy some type of event or activity. Great way to build that community. And exclusivity is actually scarcity because it’s a restriction of some sort and people feel special. Harry and David does that. They actually have the best of the best communities for their customers. And what they did is they built subcommunities out of their huge database of customers, and they offer these subcommunities top products. And now that is a B2C example, but it happens in the B2B world as well.
And secondly, the other thing that scarcity can do, which is definitely positive, is deepen customer relationships. Customers rely on businesses to inform them if there’s any shortage or if something is only going to be around for a limited time period. So communicating scarcity is so important for businesses. It actually builds that trust with customers and it builds that loyalty.
So here’s an example, letting customers know that this particular item has just been restocked. Well, that’s a scarcity signal and it actually builds that relationship because it’s informing the customer. Notating that something is a best seller or most popular also deepens that relationship because it actually helps the customer take a mental shortcut and recognize that, oh, this particular product or service is in high demand and must be pretty good. So it actually helps customers through that decision-making process and again deepens those customer relationships.
So notifying customers about scarcity, whether it’s the limited time scarcity or it’s demand-related scarcity or supply-related scarcity, all of those things go a long way with customers. And these are just two examples. There’s a lot more that scarcity does for businesses in a positive way, which helps drive revenue and it helps build that customer loyalty and it builds those deep relationships with customers. There is power in scarcity.
Scott Ingram: For links to connect with Mindy and to her book, just click over to DailySales.Tips/1506. Once you’ve done that, be sure to come back tomorrow for another great sales tip. Thanks for listening!