In this episode Chris and Corey are joined by the brilliant Dr. Mindy Weinstein, marketing expert and author of the bestselling book, "The Power of Scarcity." If you want to boost your sales game, this episode is a must-listen. Dr. Weinstein breaks down the secrets behind scarcity and its four types: time-related, demand-related, supply-related, and limited edition scarcity. Learn how to tap into the psychology of scarcity and motivate your customers to take action. Together, they explore the dynamics of scarcity in business and the impact it has on sales and marketing strategies. They also emphasize the importance of trust and credibility. Don't be that professional who abuses scarcity—build genuine relationships first! Join the Market Dominance Guys for a an insightful exploration of the power of scarcity in sales, in "Cracking the Code: Scarcity Strategies for Sales Success."
About Dr. Mindy Weinstein
Marketing is her passion. Over the last several years, she has trained 15,000+ people how to effectively approach marketing and sales in today's climate. Through webinars, workshops and conferences, her goal is to educate the business world one person at a time. As part of this goal, she has been researching, teaching and consulting about marketing psychology, with a special focus on the power of scarcity. In fact, that’s the name of her bestselling book, The Power of Scarcity: Leveraging Urgency and Demand to Influence Customer Decisions (McGraw Hill 2022).
Links from this episode:
Dr. Mindy Weinstein on LinkedIn Corey Frank on LinkedIn Chris Beall on LinkedIn
Full episode transcript below:
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(00:24):
In this episode, Chris and Corey are joined by the brilliant Dr. Mindy Weinstein, marketing expert and author of the bestselling book, The Power of Scarcity. If you want to boost your sales game, this episode is a must listen. Dr. Weinstein breaks down the secrets behind scarcity in its four types, time-related, demand-related, supply-related, and limited edition scarcity. Learn how to tap into the psychology of scarcity and motivate your customers to take action. Together, they explore the dynamics of scarcity in business and the impact it has on sales and marketing strategies.
(00:57):
And they also emphasize the importance of trust and credibility. Don't be that professional that abuses scarcity. Build genuine relationships first. Join the Market Dominance Guys for an insightful exploration of power of scarcity in sales in Cracking the Code, Scarcity Strategies for Sales Success.
Corey Frank (01:22):
Welcome to another episode of the Market Dominance Guys with Corey Frank and as always, Chris Beall, the sage of sales, the profit of profit, and the hawking of hawking. But Chris, even though you have those three vaunted titles that we've used as your nom de guerre, I guess you could say, for the last several years, we have somebody who rivals that little triumvirate of a title. And that is Dr. Mindy Weinstein. You were named as one of the top women in marketing globally. Put that in your hat, Chris, sage of sales, profit of profit.
(01:58):
We have Dr. Mindy Weinstein, MBA from ASU, Professor of Marketing here at Grand Canyon University, and the bestselling author from McGraw Hill of The Power of Scarcity. Chris, that's why we wanted to coerce, cajole, albeit probably subtly threaten Dr. Mindy Weinstein to finally jump on an episode of the Market Dominance Guys so we could talk about scarcity since we've talked about this as a backbone of sales at the crossroads for many, many of our nearly 200 episodes. Welcome, Dr. Weinstein, to the Market Dominance Guys. Chris?
Chris Beall (02:36):
Hey, what can I say, we share something, Mindy or Dr. Weinstein. My dad got an MBA from ASU also.
Dr. Mindy Weinstein (02:44):
Oh really?
Chris Beall (02:45):
I spent my childhood almost literally crawling the stacks in that big library there. That's how I grew up was in the ASU library when I was 12, 13, 14 years old.
Dr. Mindy Weinstein (02:59):
It's not a bad way to grow up, that's for sure. It's a good school. Well, I'm so excited to be here today.
Corey Frank (03:02):
Well, it's good to have you. You've been promoted and recommended, and you are also a student of the great Dr. Robert Cialdini. Chris, we were talking several times certainly about pre-suasion and persuasion and the power of influence and how that affects many of our theories and our principles here at Market Dominance Guys.
(03:25):
Doctor, talk to a little bit about the relationship that you have, certainly with the good Dr. Robert, and influence and how that helped mold what you turned from a dissertation into your bestselling book, The Power of Scarcity.
Dr. Mindy Weinstein (03:40):
It actually started out several years ago. It was over a cup of coffee. That's even the first chapter in my book is talking about the cup of coffee with Dr. Cialdini. I had just heard him, gosh, now it's been probably almost 10 years. I was at a conference. I loved his message. Always had a strong desire to understand motivation and influence because I'm in marketing. I mean, that's what we need to do is understand people and what really drives them. When I realized that he was local to me, and as I got into my Ph.D. program, I'm like, I'll just reach out and just to see if I can meet up with them. He was so gracious.
(04:19):
He met me for a cup of coffee in Tempe, Arizona, and we talked about influence and all the different factors. I was telling him some of the things that I was considering pursuing as I was looking at my dissertation topic. We talked about different gaps in research and what do we see out there. Scarcity was one of the things that was mentioned. But even after I left that conversation, I was like, okay, well, that's interesting because I think like a lot of us, we feel like we have scarcity figured out or like, "Oh, I'm doing that, playing a little hard to get, or I have some type of restriction. I get scarcity. I don't need to really dive into that that much."
(04:56):
But after I had that meeting and the more I was doing my research and started doing my testing and experiments, I realized it is so much deeper and more complicated than almost all of us realize. That's why I went down that route with my dissertation, then I turned it to a book. And then Dr. Cialdini was very gracious again and read the whole book too and gave me a very nice glowing recommendation. I put that on my book too. You could see that on the front cover.
Corey Frank (05:26):
Yes, a true gem, I believe, is one of the accolades that he mentioned. Chris, you, of course, been in sales and certainly in the catalog business are no stranger to scarcity. Certainly as a historian, as a practitioner, as well as CEO of ConnectAndSell, what's your relationship with Dr. Robert here and the power of those books, the Pre-Suasion, and then also tying into the topic at hand, which is scarcity in business today?
Chris Beall (05:55):
Well, scarcity, it's quite fascinating because I believe they're in marketing especially, but in sales also, there's a Gresham's law. Gresham's law of money says bad money drives out good, but it's not actually that it's bad money. It's that it's abundant. Counterfeit money is cheap to make, and therefore you get a lot of it, and therefore the good money goes under the mattress and the counterfeit money stays in circulation. And until something happens, and the something usually is violent, lots of people die. Isaac Newton was involved in this. Us physicists are always up to no good, I think, is one of the problems.
(06:34):
In sales, this phenomenon repeats in waves, the Gresham's law phenomenon, which is cheap, easy communications drive out scarce, valuable communications, drive them into the corner, so to speak. It turns out all the business is done in the scarce valuable conversations and the other cheap stuff gets the label spam. It's happening right now with ChatGPT, right? You and I and ChatGPT and Susan wrote a book. Well, that book is crap. It's a wonderful experience to take two days to write a book based on our podcast because it was fun to use ChatGPT, but we know damn well that that book is as close to spam as possible for something that's based on actual human beings speaking with each other.
(07:24):
The reason is because it took me from 6:00 in the morning on a Saturday until 10:00 in the evening on a Sunday, the same weekend, to get this book all the way done and to Amazon and rocking and rolling. It took the scarcity away. And if I compare it to my wife's book or, Mindy, to your book, my wife wrote a book called Love Your Team: A Survival Guide for Sales Managers in a Hybrid World. That book is scarce. It's hard to produce. The scarcity is, are you going to spend 11 months of your life while working another job and planning a wedding and a honeymoon and dealing with some guy who shows up in your life doing something unfamiliar and exhausting?
(08:11):
You know it if you edit the book. I don't know how many edit passes you had. On our honeymoon, I personally did seven edit passes of this entire book. I mean, it's the essence of the nature of value. The flip is interesting, which is in sales folks get so excited when the next cheap thing comes along and they don't think about what the consequence is, which is it drives down the value of them as sellers to use cheap means of communicating. Mass personalization with no effort whatsoever. Spam. We see this now.
(08:51):
In my company, what we're doing is we're taking something that's become so scarce that people don't do it anymore, which is getting live conversations between somebody with a problem and might have a problem and somebody who might have a solution. We make them practical, but still scarce. The way that they become scarce is the price goes up. You can dial the phone for a penny, but you have to pay us a lot more in order to have a conversation with somebody.
Corey Frank (09:17):
Yep, yep, that's right. Mindy, what do you think of that as far as we're talking about? You certainly talked about the four different types of scarcity, which we want to talk about. I think Chris hit about three of those four that he's experienced there.
Dr. Mindy Weinstein (09:30):
Yeah, okay, well, I have a lot of thoughts because you also threw out ChatGPT in there too, because you have a very interesting point, and this actually all ties to why I think scarcity is such a fascinating topic, is that you talked about personalization, and a lot of times we want to just do something mass. I actually just this week, and I sent a screenshot to my husband as a joke, this week I got an email talking about how to handle my taxes per my divorce. I screenshotted it and sent it to him. I go, "Did you not tell me something? Did I miss the papers you sent me?" He laughed.
(10:05):
And then I kid you not, an hour later, I got an email from that mass email that it was sent out to from the accounting firm saying, "We apologize. We thought we segmented our message to a certain audience." But I thought, there you go. It's an example of what you're saying. I even feel like for scarcity, what happens too, the easy way to do scarcity is just to say, "You know what? I'm going to slap a discount on this, or I'm going to put some kind of for this period only terminology and it's just going to reach everyone. Everyone's going to be happy, and I'm going to get all these sales."
(10:39):
Well, not necessarily, and I think it goes to what you're saying, personalization. Well, who am I trying to reach? Am I trying to reach a customer who really wants to feel like they have something that's exclusive and different than everybody else that they want that premier or premium service that I can provide? That's important because it's going to change how you message things versus someone who is just after the deal and it's a commodity and they don't really care. Well, yeah, then let's absolutely use time related scarcity.
(11:07):
I think even going with the personalization, if you really want scarcity to work in your business and in your sales, you have to know how the different types of scarcity interact with different people. If you don't mind, I'll just throw out the four types, which we already mentioned, but I'll just put a label on them so we're on the same page. But you have time-related scarcity. I mean, that's sales, any kind of time restriction. You have demand-related scarcity. That's, of course, a lot what we saw during COVID, huge demand.
(11:34):
All of a sudden everyone wanted toilet paper, but then that led to supply-related scarcity, which is any shortage, but the supply-related companies also can control that a bit too. We see that a lot with luxury. And then limited edition. They just work differently. I think that if you want to be successful, you can't just throw a one size fits all and I'm good. Check the box. I incorporated scarcity into my message.
Corey Frank (11:59):
We do this as sales reps, right? As an amateur sales rep, I still fall into these techniques, Chris and Mindy, because they're seemingly easy, but they hurt my credibility, don't they, in a lot of ways? If I try to introduce scarcity maybe a little too quickly or a little too unelegantly, what happens when I do that? We talk a lot about this, I think. But what happens, Mindy, when we do that as sales folks?
Dr. Mindy Weinstein (12:27):
And that's a really good point, and that's something that I try to call out in my book too. It's that for someone to listen to that scarcity type message, they have to trust you, which means you have to prove your credibility and your expertise. Well, how do you do that? Well, if it makes sense that you are talking about something being scarce and you wouldn't know that, well, they're going to listen to you a bit. But if you all of a sudden just out the gate you're like, "Well, during this call only will you get this deal," well, they don't know and trust you yet. You have to build a little bit of that.
(13:00):
That's a huge thing. We've seen a lot of studies that just even bring that point home even more, which it's not going to be shocking. But there was one study done that showed that when people were presented with different financial messages, so things that had to do with investing their money, if there was an expert quote or recommendation next to one of them, they just blindly followed that because now they're like, "Okay, I can let my guard down. I can trust this person."
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Dr. Mindy Weinstein (14:20):
You have to take that time to build a bit of the trust, and it also can't be the unexpected. It has to fit what you're selling. I had a situation where... Both of my stories today I realized are accounting stories. Go figure. But it was an accountant that I had contacted because I wanted to hire a new accounting firm for my business. One had connected me on LinkedIn, and so I reached out. I get on the phone with him and he was going through, "Here's what we provide to marketing agencies."
(14:49):
It was a great conversation. And then he goes, "And this is our retainer." He goes, "But if you agree to the retainer right now on this phone call," I kid you not, he said this, he goes, "Then it's this price." I was a little shocked because it's not something that I would expect in that type of scenario of why is my accountant doing high pressure sales on me? We don't like that. You have to think again about where are you coming from with your business, who is your audience? High pressure is not going to work in that situation.
(15:16):
What would've worked better, this would've got me to hire him, is if he was like, "It's really good timing you called because we're able to take on one new client right now." That would've had me. I tell you, that would've had me. I'd been like, "Okay, cool. I want in you. Let me in," versus here's for your price. And by the way, I said no. And then I kept getting emails of, well, I'll extend that offer to you. It just left a bad taste in my mouth.
Corey Frank (15:39):
Well, Chris certainly is one of the more preeminent voices in trust in sales today, and I think it ties in a lot, Mindy, with what you're saying and certainly what we've talked about at least half of our 200 episodes, I think, Chris, don't you?
Chris Beall (15:54):
Oh yeah, at least half. I mean, it's so interesting to me when you break stuff down like you're breaking this all down, Mindy. It's so interesting, because I mean, we break down this first few seconds of a relationship and try to get an answer to the question, how do we build trust in the amount of time we have to build trust before it's too late? We were doing it for years and not understanding it. And then Chris Voss at dinner one night, I was lucky enough to be seated with him, and I asked him, "How long do we have to get trust in a cold call?"
(16:28):
He said, "Seven seconds. Just like that." Now, that alone, the fact that he gave me this rare piece of information and he is credible made me trust... I already trust him. I read his book three times, but it was the way he delivered it, that certainty, which is very rare when you ask somebody a question like that. Normally, well, it depends, right? This was the opposite. This was the scarce opposite of it depends, which is here's a gift, seven seconds. And then I did something that is not scarce in my world, which is I made a joke and I said, "Well, that's funny because our research says eight seconds."
(17:08):
He said, "Your research is wrong. It's seven seconds." At that point, I mean, I'm convicted. The FBI's got me like this. Then I asked him, "Well, what do we have to do in those seven seconds?" Because to me, until you have trust, you have nothing. You're doomed. Anthony Iannarino's recent book, Elite Sales Strategies, opens with this quote that says, "People buy from people they trust to make a decision they don't trust themselves to make." That's the essence of why they buy, especially in B2B where they're risking their career.
(17:43):
Sadly, the quote was of me, he didn't tell me, so he just put it in the book and then I saw it. He signed the book. I was looking at it that night going, "I think that's me," which itself was, of course, not rare for Anthony Iannarino. But the idea that all commercial success is based on trust, and therefore to me, sales itself is a very civilizing influence on all of us because we're obliged to go through that scarce trust needle, the eye of the trust needle, in order to be able to ultimately transact when transacting is the right thing to do, and then we have to do something else that's as scarce as hen's teeth.
(18:26):
I always loved that phrase. I used to raise chickens. Duck don't have teeth either, but anyway. The question now is, well, okay, so what percentage of the people that we're selling to are actually capable of buying our product right now, even if they're capable of buying the product by category, by what they call ICP, ideal customer profile? The answer is really scarce, it's 8.6%. 11-12th of them are not in market now because they bought something like that to solve that problem too recently.
(19:04):
You have another scarcity thing going on there, which you need to deal with, and you need to deal with it through nurturing and patience and allowing this trust to stay in place long enough to finally get to the point where, yeah, it's time to replace that car. It's time to replace that, whatever it happens to be. I think this interplay between scarcity and trust is the essence of business. I think that's it, right? Things that are abundant or free, things that are free can't be transacted at a profit because your gross margin is zero.
(19:36):
Overabundance leads to zero margins, to true commoditization, and everything that's purchased requires trust to be built before somebody's going to risk as a consumer their money, or as a business professional, something more valuable, which is their career, their kids' college education, their retirement. It's the whole game.
Corey Frank (19:59):
Well, I'm curious, Mindy, what happens in the brain when we're faced with scarcity? Because if we understand what's happening in the brain, the quote that Chris just communicated with Anthony Iannarino is that you have to have that trust. But deeply from a biology perspective, what's happening in the brain why we respond to it and why it's so important not to abuse what you're trying to create, which is scarcity, which is to build trust so they eventually buy?
Dr. Mindy Weinstein (20:29):
Yeah, yeah. No, good question. And that's actually what I was thinking of because we were talking about value, because value is the word that keeps coming to my head, Chris, as you're talking, is that for customers who want to move forward or clients, I mean, there has to be some type of value there. And that's one of the things that scarcity does. This is something that we've seen in neurological studies through MRI scans, so the actual brain's itself hooked up so we can see what's lighting up and what's not.
(21:00):
There's two different studies that I want to bring up. One has to do with the valuation process. Participants were brought in, hooked up to MRI machines, and they were shown different scarce conditions. There was also one done for decision-making. And in both of those scenarios, they were faced with, like I said, a scarce condition, but the scarcity had to do either with a promotion, so a product was on sale and it was going to be this percentage, or an auction simulation. Those were the two things, so think eBay.
(21:30):
In those particular studies, what the researchers found was that when faced with scarcity, the part of the brain that has to do with valuation, so valuing something, lit up right away, showing that when faced with scarcity, we assume, our brains do, just automatically, that is more valuable and the value goes up. Now, for decisions, and this is the one where you really too have to be careful because it's so powerful, is that the part of the brain that has to do with decisions lights up right away, but what we've seen in those scans is that the normal steps that would be taken to get to that decision are just skipped.
(22:09):
But it makes sense when you stop and you think about it, because if something seems scarce, meaning either there's only so many left or the restrictions are there in some form, is that our mind now thinks this is urgent. It's not going to deliberate over all the different choices and the alternatives and wait, let me stop and think. It's all automatic. The thing about everything I'm talking about, this is all subconscious, it's happening. We're not necessarily thinking through this. We can't stop because it is subconscious, meaning you can't stop and be like, okay, whoa, whoa, what am I doing here?
(22:43):
We just don't. The way that our brains are wired is we're constantly looking for mental shortcuts where we can value something right away or make a decision, offload the burden of making a decision to that expert that we trust because they're telling us that this is the situation, we're going to believe them. That's what makes it so powerful. But I do want to add on that, because. Corey, you said something related to this, is that you have to be careful because knowing this I feel like is really powerful.
(23:14):
I remember as I was writing my book, I'm like, am I giving everyone just all the tools they need to manipulate everybody else now? I was really concerned about that. The thing about it is it needs to be authentic. It does. It needs to be authentic and natural. But the way that scarcity works, and I broke it down to the four different types, I guarantee there's some type of scarcity in your business somewhere. Whether it's you, the team can only take on so many more projects or so many more clients, or there's some supply issues going on, or you did a limited edition package or product.
(23:47):
I mean, it can naturally exist. When you do that and you just communicate it because you've already built that trust, that's where you see positive things happening. You can have fun with it. You can make excitement. You can build relationships. Because even if that particular client or customer is not ready right now to make that decision, staying in contact with them and communicating any type of scarcity, that's going to help too. There's one business I was just thinking of that has been doing that.
(24:18):
They'll do events and they can only have so many people in that event. Even if someone hadn't come to their event before, they'll still have them on their list and say, "Hey, this upcoming one, we have five seats left, four seats left," and it's true because you can only put so many people in the actual building. You can have a lot of creativity with it.