Influence: The Psychology of Persuasion

Chapter 7 - SCARCITY

The Rule of the Few

The way to love anything is to realize that it might be lost.

—G. K. Chesterton

THE CITY OF MESA, ARIZONA, IS A SUBURB IN THE PHOENIX AREA where I live. Perhaps the most notable features of Mesa are its sizable Mormon population—next to that of Salt Lake City, the largest in the world—and a huge Mormon temple located on exquisitely kept grounds in the center of the city. Although I had appreciated the landscaping and architecture from a distance, I had never been interested enough in the temple to go inside until the day I read a newspaper article that told of a special inner sector of Mormon temples to which no one has access but faithful members of the Church. Even potential converts must not see it. There is one exception to the rule, however. For a few days immediately after a temple is newly constructed, nonmembers are allowed to tour the entire structure, including the otherwise restricted section.

The newspaper story reported that the Mesa temple had recently been refurbished and that the renovations had been extensive enough to classify it as 'new' by Church standards. Thus, for the next several days only, non- Mormon visitors could see the temple area traditionally banned to them. I remember quite well the effect of the article on me: I immediately resolved to take a tour. But when I phoned a friend to ask if he wanted to come along, I came to understand something that changed my decision just as quickly.

After declining the invitation, my friend wondered why I seemed so intent on a visit. I was forced to admit that, no, I had never been inclined toward the idea of a temple tour before, that I had no questions about the Mormon religion I wanted answered, that I had no general interest in the architecture of houses of worship, and that I expected to find nothing more spectacular or stirring than I might see at a number of other temples, churches, or cathedrals in the area. It became clear as I spoke that the special lure of the temple had a sole cause: If I did not experience the restricted sector shortly, I would never again have the chance. Something that, on its own merits, held little appeal for me had become decidedly more attractive merely because it would soon become unavailable.

Since that encounter with the scarcity principle—that opportunities seem more valuable to us when their availability is limited—I have begun to notice its influence over a whole range of my actions. For instance, I routinely will interrupt an interesting face-to-face conversation to answer the ring of an unknown caller. In such a situation, the caller has a compelling feature that my face-to-face partner does not: potential unavailability. If I don't take the call, I might miss it (and the information it carries) for good. Never mind that the ongoing conversation may be highly engaging or important—much more than I could reasonably expect an average phone call to be. With each unanswered ring, the phone interaction becomes less retrievable. For that reason and for that moment, I want it more than the other.

The idea of potential loss plays a large role in human decision making. In fact, people seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value. For instance, homeowners told how much money they could lose from inadequate insulation are more likely to insulate their homes than those told how much money they could save. Similar results have been obtained by health researchers: Pamphlets urging young women to check for breast cancer through self-examinations are significantly more successful if they state their case in terms of what stands to be lost (e.g., 'You can lose several potential health benefits by failing to spend only five minutes each month doing breast self-examination') rather than gained (e.g., 'You can gain several potential health benefits by spending only five minutes each month doing breast self- examination').

Collectors of everything from baseball cards to antiques are keenly aware of the influence of the scarcity principle in determining the worth of an item. As a rule, if it is rare or becoming rare, it is more valuable. Especially enlightening as to the importance of scarcity in the collectibles market is the phenomenon of the 'precious mistake.' Flawed items—a blurred stamp or a double-struck coin—are sometimes the most valued of all. Thus a stamp carrying a three-eyed likeness of George Washington is anatomically incorrect, aesthetically unappealing, and yet highly sought after. There is instructive irony here: Imperfections that would otherwise make for rubbish make for prized possessions when they bring along an abiding scarcity.

With the scarcity principle operating so powerfully on the worth we assign things, it is natural that compliance professionals will do some related operating of their own. Probably the most straightforward use of the scarcity principle occurs in the 'limited-number' tactic, when the customer is informed that a certain product is in short supply that cannot be guaranteed to last long. During the time I was researching compliance strategies by infiltrating various organizations, I saw the limited-number tactic employed repeatedly in a range of situations: 'There aren't more than five convertibles with this engine left in the state. And when they're gone, that's it, 'cause we're not making 'em anymore.' 'This is one of only two unsold corner lots in the entire development. You wouldn't want the other one; it's got a nasty east-west exposure.' 'You may want to think seriously about buying more than one case today because production is backed way up and there's no telling when we'll get any more in.'

Sometimes the limited-number information was true, sometimes it was wholly false. But in each instance, the intent was to convince customers of an item's scarcity and thereby increase its immediate value in their eyes. I admit to developing a grudging admiration for the practitioners who made this simple device work in a multitude of ways and styles. I was most impressed, however, with a particular version that extended the basic approach to its logical extreme by selling a piece of merchandise at its scarcest point—when it seemingly could no longer be had. The tactic was played to perfection in one appliance store I investigated, where 30 to 50 percent of the stock was regularly listed as on sale. Suppose a couple in the store seemed from a distance to be moderately interested in a certain sale item. There are all sorts of cues that tip off such interest—closer-than-normal examination of the appliance, a casual look at any instruction booklets associated with the appliance, discussions held in front of the appliance, but no attempt to seek out a salesperson for further information. After observing the couple so engaged, a salesperson might approach and say, 'I see you're interested in this model here, and I can understand why; it's a great machine at a great price. But, unfortunately, I sold it to another couple not more than twenty minutes ago. And, if I'm not mistaken, it was the last one we had.'

The customers' disappointment registers unmistakably. Because of its lost availability, the appliance jumps suddenly in attractiveness. Typically, one of the customers asks if there is any chance that an unsold model still exists in the store's back room, warehouse, or other location. 'Well,' the salesperson allows, 'that is possible, and I'd be willing to check. But do I understand that this is the model you want and if I can get it for you at this price, you'll take it?' Therein lies the beauty of the technique. In accord with the scarcity principle, the customers are asked to commit to buying the appliance when it looks least available—and therefore most desirable. Many customers do agree to a purchase at this singularly vulnerable time. Thus, when the salesperson (invariably) returns with the news that an additional supply of the appliance has been found, it is also with a pen and sales contract in hand. The information that the desired model is in good supply may actually make some customers find it less attractive again. But by then, the business transaction has progressed too far for most people to renege. The purchase decision made and committed to publicly at an earlier, crucial point still holds. They buy.

Related to the limited-number technique is the 'deadline' tactic, in which some official time limit is placed on the customer's opportunity to get what the compliance professional is offering. Much like my experience with the Mormon temple's inner sanctum, people frequently find themselves doing what they wouldn't particularly care to do simply because the time to do so is shrinking. The adept merchandiser makes this tendency pay off by arranging and publicizing customer deadlines—witness the collage of such newspaper ads in Figure 7-3—that generate interest where none may have existed before. Concentrated instances of this approach often occur in movie advertising. In fact, I recently noticed that one theater owner, with remarkable singleness of purpose, had managed to invoke the scarcity principle three separate times in just five words that read, 'Exclusive, limited engagement ends soon!'

Swindled

By Peter Kerr

New York Times

NEW YORK—Daniel Gulban doesn't remember how his life savings disappeared.