From: alexhormozi
Scarcity and urgency are powerful persuasion tools, with urgency being a function of time (e.g., “promotion ends tomorrow”) [09:02:00] and scarcity being a function of units (e.g., “I only have a hundred of them left”) [09:05:00]. These principles are part of a broader set of persuasive tactics discussed in Robert Cialdini’s “Influence” [00:11:00].
Why Scarcity Works [09:08:00]
People tend to value what is scarce [09:08:00]. For example, gold is considered valuable because there is less of it compared to a common rock [09:10:00]. The diamond conglomerate De Beers maintains the high value of diamonds by owning most of them and storing them in vaults to control scarcity, even though rubies and sapphires are actually rarer [09:14:00]. This artificial scarcity allows them to command a premium price [09:24:00].
Implementing Scarcity and Urgency
To effectively implement these tools in persuasion, you can:
- Use Limits: Employ phrases like “limited time,” “limited supply,” or “one-time offers” to create the perception of scarcity [09:27:00].
- Employ Loss Language: Frame your messaging around what people stand to lose rather than what they can gain [09:34:00]. For instance, instead of asking “don’t you want to get it?”, ask “you don’t want to miss out,” as people are more motivated by loss aversion than by the desire for gain [09:40:00].
- Control Supply: Luxury brands like Chanel, Gucci, and Prada often send only a small number of items (e.g., one to three purses from a new spring line) to stores without specifying the total quantity they will send [09:43:00]. This central control over supply ensures that sales people genuinely perceive and communicate scarcity, reinforcing the desired urgency [09:56:00].
- Create Perceived Demand: During the COVID-19 pandemic, luxury stores maintained lines outside, even when other businesses dropped capacity limits [10:12:00]. This tactic creates the impression of high demand and exclusivity, leveraging both scarcity and social proof [10:20:00].
The Importance of Authenticity [10:29:00]
The key to successful application of scarcity is to be authentic [10:30:00]. If true scarcity is applied, it will genuinely lead to more sales [10:33:00]. If a business can only handle a certain number of clients per week or has a limited product stock, explicitly stating these limits encourages more purchases [10:38:00]. Amazon’s practice of showing “23 left in stock” is a prime example of how communicating limits drives sales [10:42:00]. Being explicit about available quantities effectively utilizes the persuasion principle of scarcity [10:53:00].