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Episode 1472:
Seth Godin explores the concept of scarcity, showing how it drives value and creates desire. By identifying what is scarce in your life, business, or community, you can better understand how to leverage it for success, build deeper connections, and inspire action.
Read along with the original article(s) here: https://seths.blog/2008/07/scarcity/
Quotes to ponder:
"Scarcity creates value. When something is hard to find, we often value it more."
"If you can identify what's scarce in your life, in your business, or in your community, you have a chance to change it."
"We take action because the opportunity is about to disappear, not because we need it today."
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[00:00:26] This is Optimal Work Daily.
[00:00:29] Scarcity by Seth Godin of Seths.blog
[00:00:33] One day you may be lucky enough to have a scarcity problem. A product or a service or even a job that's in such high demand that people are clamoring for more than you can make.
[00:00:43] We can learn a lot about the abysmal performance of Apple this weekend.
[00:00:47] They took a hot product and totally botched the launch because of a misunderstanding of the benefits and uses of scarcity.
[00:00:54] First, understand that scarcity is a choice.
[00:00:57] If you raise your price, scarcity goes away.
[00:01:00] If your product is going to be scarce, it's either because you benefit from that or because your organization is forbidden to use price as a demand adjustment tool.
[00:01:08] I'm going to assume the former, but I riff a bit on the latter toward the end.
[00:01:13] Why be scarce?
[00:01:14] Scarcity creates fashion.
[00:01:16] People want something that others can't have.
[00:01:19] Lines create demand.
[00:01:21] People want something that others want.
[00:01:23] Scarcity also creates word of mouth because people talk about lines and shortages and hot products.
[00:01:28] And finally, scarcity drives your product to the true believers, the ones most likely to spread the word and ignite the idea virus.
[00:01:37] Because they expended effort to acquire your product or service, they're not only more likely to talk about it, but they've self-selected as the sort of person likely to talk about it.
[00:01:46] The danger is that you can kill long-term loyalty.
[00:01:50] You can annoy your best customers.
[00:01:52] You can spread negative word of mouth.
[00:01:54] You can train people to hate your scarcity strategy.
[00:01:57] And Apple did all four this weekend.
[00:01:59] Take a look at the guy in the photo in this post.
[00:02:03] That's the goal.
[00:02:04] He feels great.
[00:02:05] He's a hero, at least for a moment, all because he stood in line all night.
[00:02:10] He gets to talk about it and others, not everyone but enough, aspire to be him next time.
[00:02:16] You reward the tribe and you build the tribe at the same time.
[00:02:20] The problem is that our knee-jerk way of dealing with scarcity is to treat everyone the same and to have people pay by spending time to indicate their desire.
[00:02:29] Waiting in line is a very old-school way of dealing with scarcity.
[00:02:33] And treating new customers like old customers, treating unknown customers the same as high-value customers, is painful and unnecessary.
[00:02:42] Principle 1. Use the internet to form a queue.
[00:02:45] If you have a scarce product, you almost certainly know it's scarce in advance.
[00:02:50] Instead of taxing customers by wasting their time, reward the early shoppers by taking orders online.
[00:02:55] A month before sale date, for example, tell them it's coming.
[00:02:59] If you sell out before ship date, that's great, because next time people will be even quicker to order when they hear about what you've got.
[00:03:06] And you can do this in the real world, too.
[00:03:08] Post cards with numbers or even playing cards work just fine.
[00:03:12] A hot band that regularly sells out on the road, for example, could put a VIP serial number inside every CD or T-shirt they sell.
[00:03:19] Use that to pre-order your ticks.
[00:03:22] Principle 2. Give the early adopters a reward.
[00:03:25] In the case of Apple, I would have made the first 100,000 phones a different color.
[00:03:29] Then, instead of the buyer being a hero for 10 seconds, he gets to be a hero for a year.
[00:03:35] Principle 3. Treat different customers differently.
[00:03:39] Apple, for example, knows how to contact every single existing customer.
[00:03:43] Why not offer VIP status to big spenders?
[00:03:46] Or to those that make a lot of calls?
[00:03:48] Let them cut the line.
[00:03:49] It's not fair?
[00:03:50] What's fair mean?
[00:03:51] I can't think of anything more fair than treating the people who treat you well better.
[00:03:56] Principle 4. When things happen in real time, you're way more likely to screw up.
[00:04:01] One of the giant advantages of the net is that you can fix things before the whole world notices.
[00:04:07] Try to do your rollout in small sections, so you can fix mistakes before you hurt the very people you're trying to embrace.
[00:04:14] Principle 5. Give your early adopters a forum to celebrate.
[00:04:18] A place to brag or demonstrate or show off or share insights and ideas.
[00:04:23] Amplify the heroes.
[00:04:25] Which is far better than amplifying the pain of standing in line.
[00:04:28] Imagine what the Apple and AT&T stores would have been like this weekend if they were filled with happy customers who had prepaid, pre-registered,
[00:04:35] and were just dropping in for 3 minutes to pick up their very coveted phones.
[00:04:39] Walking up the VIP line, past all the others just waiting for a chance to buy one.
[00:04:44] Hot restaurants in New York violate all 5 of these principles on a regular basis.
[00:04:48] So do sports teams and stores that have lines out front in the middle of winter.
[00:04:53] What a waste!
[00:04:54] Even colleges do it.
[00:04:55] They pretend they've got a meritocracy.
[00:04:58] But in practice, it's a high-pressure lottery with enormous financial and stress overhead involved.
[00:05:03] Yes, there are times when scarcity is mandated.
[00:05:06] The TSA at airports, for example.
[00:05:08] Or food rations at an emergency site.
[00:05:11] I know that there are plenty of ways to deal with this scarcity as well.
[00:05:14] Ways to treat your customers, and yes, they are customers, with more respect.
[00:05:18] To communicate the situation more clearly, and to architect the environment so that people are grateful, not stressed out.
[00:05:26] Smart marketers understand that scarcity, intentional or not, is a tool.
[00:05:30] One that can be used to enhance the story, not detract from it.
[00:05:38] You just listened to the post titled, Scarcity by Seth Godin of Seths.blog.
[00:05:44] This show is sponsored by BetterHelp.
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[00:06:46] And thank you to Seth.
[00:06:47] He is a super popular writer with 19 best-selling books.
[00:06:52] He's also the creator of Alt-MBA, an online leadership and management workshop.
[00:06:57] That's the same one I mentioned in yesterday's episode, you might remember, that Margot Aaron took.
[00:07:01] Alt-MBA uses digital tools to engage with small groups of 120 students in an intense four-week process.
[00:07:09] It's been going on since 2015, and it's transformed the lives of more than 4,500 people in more than 70 countries.
[00:07:16] And a little more about Seth.
[00:07:18] Seth, he's been writing daily on his blog for over a decade, and today's article was actually from 2008, if you can believe it.
[00:07:25] More than 60,000 people have taken his online courses, and he has five TED Talks.
[00:07:30] His site is definitely worth checking out. He has a lot to offer there.
[00:07:33] So come by Seths.blog to check it all out.
[00:07:37] That's going to do it for today. I thank you again for listening, and of course, ask you to subscribe if you got a second.
[00:07:42] I will see you right back here tomorrow for the Saturday Show, where your optimal life awaits.
[00:07:47] .