Saturday, 9 July 2016
How does scarcity create more value?
I had an epiphany today. I was jogging, it was a weird day. Sunny and hot yet, the rain was coming down. It was refreshing. While I jog I listen to audiobooks. It helps to distract me from the actual jog.
Why do I need a distraction from jogging? Because it isn't something I look forward to doing, same with exercise. As good as it is for you, it is hard work and the results are not immediate. So consistency becomes necessary, and because the results are not immediate it is that much harder to get motivated to do.
This isn't what the epiphany was about although, it will tie in at the end of this post. I was listening to Decisive by Chip and Dan Heath and something clicked that I wanted to share with you. I feel when you nail this piece of information you will understand how to produce results.
I have written about understanding people, their behaviours and actions, and that people are emotional rather than logical buyers.
Well the puzzle came together for me after I have written my last post and during my jog listening to Decisive the following day.
Running a business is hard work especially when you are just starting out. You have a product or service you want to sell but no one is buying it. So you start dropping the value of what it is worth so it sells, and you start listening to people who want to see you succeed yet they have no clue what it takes to make your business profitable.
Helpful Advice is only given to you when you ask for it, unless it is unsolicited advice of which almost every time you have no use for. Try A and you will get B or do it this way because it works for me.
This advice seldom works. Understanding that your clients are people is the first thing you need to do.
They are human just like you and I. Next understand that these same people buy on impulse. When you get them excited about something they want to buy it that much more. Their logical self however, will stop them form making the purchase.
So how do you remove them from their logical self? By applying the scarcity principle. Why does the scarcity principle work? Because it doesn't allow people to distance themselves from making the decision based on their emotion.
"You want people to buy with emotion because emotion sells."
How do you apply the scarcity principle? First by getting the person excited about the purchase. Validating what they may be contemplating. Without the first part this second part will not work.
Next let the person know that there is limited time left on the purchase since someone else is interested in buying it and there will not be any left of that same product if they don't buy NOW. In terms of service apply a limited time promotion that must be purchased NOW.
When people hear that there is no time left and they need to make the purchase now you figure out who is serious about making the purchase and secondly when people do buy it creates a social acceptance for the next person.
"This is the last person that bought this, and here is what they said about it." When people hear this it makes them more comfortable that someone else went first. This further increases your chances to make the sale.
You find out if what your selling is something that people want, if that something is of any value to the person buying it. The problem is that most times people buy things that are of no value to them at the time.
Your approach to the sale is the most important. Anyone can sell anything, its how you do it that will increase your chances of making the sale happen.
I have learned this before but clearly it went straight in one ear and out the other. Now that I am teaching you this I feel it will stick with me from now on.
The best way to learn is by teaching.
So there you have it. Understanding that people buy based on their emotions. Another thing I should mention, and I learned this in Dan and Chip's book. What happens throughout the day will affect people's buying mood.
If the person had a shitty day it will be much harder to convince them to buy whatever it is your selling.
The best advice I can offer you is to get to know the person who is shopping for your product or service. Understand their needs and create value for them by doing what you think is best for them. "Always put the customer first."
Right now I am enjoying a quick relaxing getaway in the beautiful wine country of B.C. Even though I am not a drinker it is still a beautiful sight with beautiful people. You to deserve a break, so take a little time to relax but not to long because the hustle will be waiting for you.
Thank you for reading this post. To be continued....
Image copyright by telegraph.co.uk photo by alamy