It’s a very difficult time for our country and the world with the COVID-19 virus. I would never have thought of going to the store as soon as I could to buy as much toilet paper as possible. Now that we are approaching a month of sheltering in place, I would think that the stock of bare necessities would be back to normal. But that’s not the case. Whether it’s toilet paper, paper towels, water or even tuna, the shelves at Kroger are still bare. Thus, the laws of supply and demand are at work!
You log onto Amazon to buy a specific product your friend told you about. Amazon tells you there are only three remaining. What do you do? You buy it without hesitating. Why? It’s FOMO. The fear of missing out.
Both examples demonstrate the scarcity effect. That’s when a sense of urgency creates more demand than supply. You get the impression that products and services are good, in high demand and you need to have it. Suppliers sometimes create this illusion of high demand and low supply. Today, many of the shortages are real and they are exacerbated by the fear.
In sales, we all want our products and services to be in high demand. It’s also beneficial to avoid negotiating on price.
Think about the Toyota Prius in 2004. When gas was $4 a gallon, the first thing the salesperson at the dealership told you was that the price was not negotiable. And the reason was that the Prius got 50 miles to the gallon. It also took three months to get your new Prius when you ordered.
Scarcity tells the customer that their offering that is in such high demand is successful. Everyone wants it, so it must be good. It’s human nature to want the best, especially when we might miss out because of the growing demand.
When products and services are scarce, how does each personality style behave? I believe we can put them into two categories. Two styles respond, the Blue and the Green, and two react, the Gold and the Orange. Let me explain.
Blues and Greens are the more patient and passive personalities. They are slower to make decisions since they are intuitive in nature. Intuition is a sixth sense, which means they consider other facets in their decision making that are not tangible. Blues are cautious buyers looking for the best choice, making sure they’re getting the best quality. They buy based on trust. Greens want the best capability; they buy on research. The scarcity effect would not have a huge effect on these two personality styles. They respond when they are satisfied, and they’ve covered all their bases.
Golds and Oranges are the more aggressive personalities which shortens their patience. They are sensory, which makes them more decisive. Sensory means they use their five senses to make a decision. So, they are limited in how they analyze. Oranges are impulsive in nature and are driven to get a great deal. Golds buy based on a good investment with a good return. They make decisions in a certain timeframe. The scarcity effect causes Golds and Oranges to react which drives their sense of urgency.
The bottom line is that when you create demand for your products and services, there’s a good chance your Gold and Orange personalities will be the first one’s to show up. Remember it’s not what they buy, but why!