The Psychology of Persuasion: How to Improve Your Marketing Efforts (Part 7 of 7 - Scarcity)

Updated: June 10, 2011

Motivated by Loss

The research clearly indicates that human beings are more motivated by the idea of losing something than by the idea of gaining something of equal value.

One research study found that homeowners are more likely to insulate their homes if they are informed that they could lose money if they did not have adequate insulation, compared to being told that they could save money by adding insulation. Another study showed that women are more likely to conduct self-examinations to check for breast cancer if they are told what they stand to lose by not performing the self-examinations.

The Scarcity Principle in Action

Compliance professionals (e.g., advertisers, salespeople, recruiters, fundraisers) often use tactics that rely on people's tendency to feel that something is more valuable if it is scarce or might become scarce. The primary intent behind each of these tactics is to increase the worth of something by claiming that it is scarce.

The "limited-number" tactic involves telling customers that a particular product is in short supply and may not be available in the near future. Often used to sell cars and appliances, this tactic is highly successful in convincing people to buy products that seem more desirable simply because their availability is limited.

The "deadline" tactic entails informing customers that a product or service is available only for a limited time. Using a variant of this technique, certain face-to-face, high-pressure sellers tell customers that they need to buy "right now" if they want to take advantage of the deal being offered; if they don't make an immediate decision to purchase the product or service, the deal is off.

Psychological Reactance

Why do compliance practitioners rely so frequently on the scarcity principle to influence us? And why is this principle so powerful in directing human action?

First, like other principles of influence, the scarcity principle brings into play our weakness for taking shortcuts in our hectic, decision-filled lives. In most situations, the shortcut benefits us because we can use an item's availability to help us efficiently (and often correctly) determine its quality.

Second, there is something even more powerful at work. The evidence suggests that we have a particular response (called "psychological reactance") to situations in which our personal control is diminished.

Whenever opportunities become less available, either limiting or threatening our free choice, our need to maintain our freedoms makes us desire these freedoms significantly more than we previously did. This increased desire also applies to the goods and services associated with these freedoms.

Therefore, if something interferes with our access to certain things in our lives (i.e., a person, an item, or an opportunity becomes or may potentially become "scarce"), we tend to react against this interference by attempting to possess it more than before. In other words, much of our behavior can be explained by our response to restrictions of our freedoms to possess things we desire.

"The Terrible Twos"

Psychological reactance can more easily be understood if we examine when we first begin to fight against restrictions to our freedoms.

Studies repeatedly have shown that our resistance to outside pressure typically starts around the time we turn two years old. Most parents have experienced the contrariness of their children during this period commonly referred to as "the terrible twos."

The classic response of outright defiance to a limitation of freedom is illustrated in a study involving two-year-old boys who were offered equally attractive toys. For the first group of boys, one toy was placed next to a transparent Plexiglas barrier and the other toy was placed behind the barrier. Since the barrier was only one foot high, the boys could easily reach over over the top to get to the toy.

For the second group of boys, the toys were placed similarly, but the Plexiglas barrier was two feet high, restricting access to the toy unless the boys went around the barrier.

The boys in the group having easy access to the toy behind the barrier showed no special preference for that toy; they touched the toy next to the barrier as quickly as the one behind it. The boys in the group challenged by the two-foot-high barrier, however, touched the toy behind the barrier three times faster than the toy next to the barrier.

These findings, along with the results of other studies, plainly demonstrate that psychological reactance emerges around the age of two. But why at that age?

Social scientists have theorized that around this time toddlers begin to recognize themselves as individuals. With this newfound sense of independence and autonomy comes a certain amount of freedom to choose. It is no wonder, then, that most two-year-olds begin to question volition, control, and entitlements within their own little minds.

Psychological reactance doesn't evaporate after we emerge from childhood. We continue to struggle throughout life (especially during our teens) to test the limits of our freedoms as a means to discover when we are likely to be controlled or to be in control. And we never, never grow out of our tendency to react against restrictions to our freedoms.

Distance Makes the Heart Grow Fonder

There is plenty of evidence provided by our own daily experiences that, when something is limited and less available, we tend to desire it more. What is odd about this tendency is that we usually are not aware of psychological reactance at work; all we know is that we want that "something" more than before.

Studies have found that we typically begin to assign positive qualities to things in limited supply to explain why we desire these things so much. It makes sense to believe that the items of our desires have merit if we feel drawn to them.

If something is banned (e.g., government prohibiting use of certain items, parents restricting interaction with certain individuals), we presume that it is more valuable and we automatically want access to it. This tendency to want what we cannot have also applies to restrictions on information.

Scarce Information

Research results indicate that not only do we have a greater desire to receive banned information (like media violence, pornography, or radical political rhetoric), but that we also develop a more favorable attitude regarding the censored information, even if we never receive this information.

For example, one study found that university students became more opposed to the idea of coed dorms after a speech denouncing coed dorms was banned. Students actually became more sympathetic to the arguments against coed dorms without ever hearing the speech.

It appears, therefore, that individuals who hold an unpopular position can influence us to concur with that point of view by restricting access to the details of the message itself. Political groups, for example, may most effectively advance their cause by arranging for censorship of their views and then publicizing the censorship.

Scarcity and Exclusivity

Information doesn't have to be censored to make us value it more; it only needs to be inaccessible or scarce. And according to the scarcity principle, it turns out that information is more persuasive if we believe it is exclusive and cannot be found anywhere else.

One study particularly illustrated how scarcity and exclusivity work together to deliver a powerful punch. Three groups of buyers for retail food outlets received three different communications from a wholesaler of imported beef.

One group was given the standard sales presentation. The second group heard the standard sales presentation plus information that the supply of imported beef would probably be limited in the upcoming months. The third group received the same information as the second group but was also told that the news about the possible scarcity of the imported beef was not generally available information but had been provided by an exclusive contact.

The second group of customers that received information about the future scarcity of the beef bought twice as much as customers in the first group. But customers in the third group, which was given the "exclusive" news, bought six times more beef than customers in the first group.

The moral of this story is that information about the scarcity of an item is highly persuasive if the information itself is perceived as being exclusive (i.e., scarce).

Timing Is Everything

Social psychologists have been wondering when scarcity has the biggest effect on us in terms of influencing our behavior. Multiple experiments were devised to answer this question.

In one of the studies, a group of participants were given a cookie from a jar of two cookies and asked to taste and rate its quality. A second group of participants were shown a jar of ten cookies, but before they were given a cookie and asked to rate it, the jar was replaced by another jar containing only two cookies.

The question being posed by the experiment was as follows: Do we place greater value on things that have recently become scarce to us (demonstrated by withdrawing the jar of ten cookies and being asked to take a cookie from a jar of two cookies), or do we see greater value in things that have always been scarce?

The results were clear-cut. Compared to individuals in the first group, participants in the second group (whose jar of ten cookies was replaced by a two-cookie jar) rated the cookies as more desirable, more attractive, and more costly (but not more delicious!). Apparently, going from abundance to scarcity has a significantly greater effect on people's responses.

This finding is useful for explaining why recently experienced scarcity causes so much violence and political turmoil. Historical evidence appears to support the hypothesis that revolutions are more likely to occur when a period of improving social and economic conditions is followed by a sharp reversal in those conditions.

In other words, people are more inclined to revolt if they are given at least a little taste of a better life. When individuals experience improved social and economic conditions in their lives, and they suddenly are deprived of these improvements, they desire them more than ever and take aggressive action to secure them.

Scarcity, when it is unexpectedly thrust upon people accustomed to abundance, puts the wheels of psychological reactance in motion, sometimes creating violent revolutions. It appears, then, that the scarcity principle is activated automatically whenever freedoms are taken away.

Competition and Scarcity Pressures

We have learned from the "cookie experiments" mentioned above that scarce cookies were rated higher than abundant cookies and that that recently scarce cookies were rated higher than cookies that have always been scarce. But the researchers found that one particular type of cookie was given the highest rating.

In one experiment, both groups of participants were given a jar of ten cookies, which was immediately replaced by a two-cookie jar. The first group was told that some of their cookies needed to be given to other participants in order to supply the demand for the cookies. The second group was given the explanation that the researcher made a mistake by initially giving them the ten-cookie jar. The results clearly showed that cookies that became scarce through "social demand" were rated significantly higher than cookies that became scarce by mistake.

This finding supports the conclusion that we desire scarce items most when there is competition for the item. This tendency appears to apply to various situations, including purchasing commodities in high demand, establishing intimate relationships with sought-after individuals, and attending sold-out recreational events.

Featured Research
  • Contact Center Software on a Budget

    Although contact center software is necessary for a modern contact center, it can be outrageously expensive. Many companies find that their budget bloats during the implementation process. more

  • How UC Can Help Your Business Survive the Holidays

    The holiday season is filled with frenzy and excitement for businesses and consumers alike. Consumers prepare gift lists, compare brands and prices, and begin shopping with a vigor that is not present most other times of the year. For many businesses, the holiday season accounts for a large profit bump at the end of each year, and companies strive to exceed their goals and keep customers happy during this rush late in the year. more

  • [Infographic] Switching Phone Systems

    There are a lot of possible reasons you might want to switch to a new phone system. The old one might cost too much or be too troublesome to operate and maintain. It might not be flexible enough. It might not be reliable enough. Or it just might not have the kinds of features and capabilities that you need in today’s competitive business climate. more

  • Business Intelligence Software Cost Guide

    Your choice in a BI (Business Intelligence) provider can lead you to make better, data-driven decisions for your business, resulting in significant ROI. Or it can cost hundreds of thousands of dollars with mixed results. more

  • The New 2016 ERP Comparison Guide

    Selecting an ERP solution is no easy undertaking. You have to select and configure a system that fits your exact business needs. The right system can make operations more streamlined, efficient, and agile. But choosing the right vendor can be difficult. more