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The Persuasion Law of Scarcity Drives People Crazy


Shortage of Christmas trees-Buy early and now: Media is encouraging folks to buy their trees early. They declare there is a shortage because of droughts and wild fire, as well as farmers giving up on growing trees. Is this real or is the media creating this feeling of scarcity?


Chicken tenders and wings-Running low: If one orders groceries online, one sees replete through the site the phrase “running low,” so of course these are the first things bought. Is this a marketing ploy?


Bacon and meat costs sky rocket: Customers begin stockpiling and storing in freezer.


Scarcity of digital assistance: These programmers, photographers, animators used to be paid $30K per year while they worked in their cubicles. Now the transition is digital. These folks can now demand $150K per year and work from their homes. (Kevin O’Leary, Shark Tank)


Scarcity on supermarket shelves, scarcity with plants waiting for parts: Los Angeles and Long Beach accept 40 percent of all goods coming into the United States. There are 111 container ships waiting to be unloaded. The record was 108 at these ports. People are worried and stockpiling.


Scarcity, whether real or imagined, drives people crazy and persuades them psychologically.


The Law of Scarcity is one of the 12 Persuasion Laws per Author Kurt Mortenson’s book: Maximum Influence, The Twelves Law of Persuasion.


Scarcity is the restricted availability of a product, service, time and/or information. Setting limitations on items will peak the interest of your audience. The less there is of an item (real or perceived) the more it increases in value, which leads to the urge to have it. We don’t want to miss out on something that we could have had. In fact, we work very hard to get around restrictions and limitations that are placed on us.


Example: One Maryland business often offers trainings such as negotiation. The training director sends a message to all saying there are only 20 spots available. Later, the director sends another message: Only 5 seats left. The trainings are always sold out.


Example: At a law school a compressed negotiation course is offered with only 20 spots. Yes, they are grabbed immediately. There is a waiting list of scores. This class is so popular that the Associate Dean now uses a lottery system.


Today, in the shadows of COVID there are a variety of scarcities. This presents persuasive opportunities for workers.


- Amazon, Costco, Walmart: They are raising minimum wage and even offering $37 per hour in ads.


- Fast Food Establishments: Recently, fast food wages have increased by 10 percent: the largest increase in history. People are flocking to get out and eat and workers are scarce. Workers may be getting out of poverty level wages. McDonald’s and Chipotle are raising minimum wage to $20.


- Truck Drivers: Using scarcity, pay may go up by 8 percent and they are demanding more “home time.” The truck driver jobs have a 90 percent turnover since the quality of the jobs is so bad. Real Time Host Bill Maher calls these jobs horrible with a horrible life. Now, because of scarcity they have a bit of leverage.


- Looking for Employees Generally: Labor scarcity is leading business to offer signing bonuses, iPhones, and other perks.


- Coins: The scarcity of coins has caused some businesses to give a discount if one pays in cash. One coffee shop is giving a 15% discount.


- Restaurant supplies: The scarcity of supplies such as plastic cups has persuaded many customers to recycle or bring in their own reusable bottles.


- Art Museum Unionization: Museum staff from Chicago to Los Angeles to New York City are beginning to turn to unionization due to the scarcity of resources. This scarcity includes minimal wage increases, the lack of transparency, layoffs, and furloughs. 13 percent of museum staff is now unionized-the highest recorded in US history. The Art Institute of Chicago has even formed a new union associated with the American Federation of State, County, and Municipal Employees (AFSCME).


- Coronavirus Home Tests in Demand: With schools back in session and more people going back to work, there is a demand for home tests, especially the rapid antigen tests, that is not being met. President Biden’s administration has pledged $1 billion worth of at-home tests. The scarcer the tests are, the more the demand.


(This was reminiscent of the rush to sign on to Obamacare-Affordable Care Act, which also crashed the websites.)


- Initial Vaccines: What a madhouse it was when vaccinations first became available and there were limited appointments. The call in lines were swamped. Websites crashed.


Other non-COVID related examples:


- Lead Free Drinking Water in Benton Harbor, Michigan: This Lake Michigan port used to be known for its “healing waters.” It was known for its fruit farms and even mineral baths. For the past 3 years, the lead in the water has exceeded EPA standards. Community groups are now distributing cases of water. The scarcity is scaring residents who are stocking up on water, creating even more scarcity.


-The Last Circus Event: The two last circus events by Ringling Bros. & Barnum and Bailey sold out and was streamed via Facebook Live to 19,000 viewers. This was a real scarcity after 146 years. Social pressure and animal rights were the major reasons for the closing. PETA won a nearly $16M settlement from Ringling.


- Farewell Tours: Maybe it was French singer and entertainer Maurice Chevalier (1888-1972) who made the never-ending farewell tours famous using the Law of Scarcity for sell-out crowds in Latin America and the United States.


Of course, American singers Cher, Diana Ross, and Barbara Streisand followed suit.


The Psychology of Scarcity

Why does scarcity drive people crazy? It is psychological. The rarer it is, the more unique it is, the less common, the more people want it. People are generally more motivated by fear of loss than want of gain.


- There are only 24 hours to the day.

- The supply of coal is finite.

- Clean drinking water.


A great example would be cellphones. One T-Mobile District of Columbia store had requests for more than 1,000 iPhone 13 Max. They were sent 100 initially. The Law of Scarcity at work.


The most powerful aspect of Scarcity is when something has been abundant and then is not.


Scarcity and Economics


Individuals and societies are forced to make choices because most resources are scarce.

Economics is the study of how individuals and societies choose to allocate scarce resources, why they choose to allocate them that way, and the consequences of those decisions.


Scarcity is sometimes considered the basic problem of economics. Resources are scarce because we live in a world in which humans’ wants are infinite but the land, labor, and capital required to satisfy those wants are limited. This conflict between society’s unlimited wants and our limited resources means choices must be made when deciding how to allocate scarce resources.


Any economic system must provide society with a means of making choices that answer three basic questions:


· What will be produced with society’s limited resources?

· How will we produce the things we need and want?

· How will society’s output be distributed?


Using Reverse Psychology

A colleague wondered whether President Joe Biden could have used the Law of Scarcity with the COVID vaccine. If he had said that only Biden voters could get the vaccine, would the Trump voters cry foul and rush to get the vaccine?


The Scarcity Mindset

This mindset is most worrisome. It is a learned behavior believing that one does not deserve abundance and one needs to get one’s share. Binge eaters often describe this condition that there is a feeling of never enough.


The cure is psychological. One needs to be aware, resist, transcend the feeling and affirm that there is abundance.


Conclusion

The scarcity effect is a cognitive bias placing higher value on objects that are scarce and lower value on those that are available or in abundance. Short supply increases the value and preciousness and desirability. Sometimes the scarcity is artificial to create a demand.


Scarcity creates negative emotions that affects decision-making.


Common scarce items are gold, oil, and land.


The most powerful scarcity persuasion technique is when something was abundant and then becomes scarce. Oddly, in present society during the crisis “working at home” was abundant and is gradually being taken away. Many workers realized that they could effectively accomplish their jobs at home rather than in cubicles.


Mortensen notes that:


-Deadlines

-Limited space, numbers or access,

-Potential loss, and

-Restricting freedom


Are all familiar ways of using the Law of Scarcity.


Resources:


See Recommended Books under “Blogs” drop down menu. Clicking on any book will lead one to the discounted Amazon site. Kurt Mortensen’s book, Maximum Influence is included.

Roy J. Lewicki is the author of 'Essentials of Negotiation', published 2015 under ISBN 9780077862466 and ISBN 0077862465. Publisher: McGraw Hill Higher Education.


The Conflict Resolution Training Program, Leader’s Manual, ISBN: 0-7879-6077-2. Prudence Bowman Kestner and Larry Ray


Maximum Influence, The 12 Universal Laws of Power Persuasion, Kurt W. Mortensen.


Say What You Mean. Get What You Want, A Businessperson’s Guide to Direct Communication, Judith C. Tingley, Ph.D.


How to Win Friends and Influence People, Dale Carnegie. “The first-and still the best book of its kind-to lead you to success.”


How to Negotiate Like a Child-Unleash the Little Monster Within to Get Everything You Want, Bill Adler, Jr., ISBN 0-8144-7294-X


Making Your Case-The Art of Persuading Judges, Antonin Scalia and Bryan A. Garner, www.west.thomson.com, ISBN 978-0-314-18471-9




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