407. Unpacking the Psychology Behind Scarcity w/ Mindy Weinstein

Welcome to episode 407 of the Brainy Business Understanding the Psychology of why People Buy. In today's episode, I'm excited to have Mindy Weinstein back on the show to discuss the power of Scarcity. Ready? Let's get started.

You are listening to the Brainy Business Podcast where we dig into the psychology of why people buy and help you incorporate behavioral economics into your business, making it more brain free friendly. Now here's your host, Melina Palmer.

Hello.

Hello everyone. My name is Melina Palmer and I want to welcome you to the Brainy Business Podcast. In today's conversation, I'm joined by Mindy Weinstein, author of the Power of Scarcity. Before we jump into the conversation and a little bit of background on today's discussion, there is an anniversary to celebrate today. This episode will be coming out one day before the six year anniversary of the Brainy Business Podcast, which officially launched with its first three episodes on July 6, 2018. That is 2191 days of the Brainy Business Podcast. And as you heard, this is also the 407th episode of the show. Thank you to everyone who's listening. Now, whether this is your first episode with us or you've been around for all 2,191 days of the podcast, I appreciate you and am so thankful you're here. We wouldn't be us without you. So thank you. And while we don't have many repeat guests here on the show, I'm so delighted that Mindy Weinstein agreed to join me for a second time here on the Brainy Business. Especially because she flew all the way to Austin and joined me for a live podcast interview at Green Books iiex North America Conference back in April of this year. And that's what we're refreshing and listening in on here today. I love speaking at and attending this conference and all the conferences from Green Book the IEX events. I have episodes coming up with some more people I met at this event doing fascinating work very soon. So keep an eye and ear out for for those and as mentioned, today's conversation is the main reason why I was at this event. This live podcast interview with Mindy discussing scarcity and how it can apply into business, specifically market insights and consumer research since that's the focus of the conference. But there are all sorts of tips and insights that apply to everyone else as well. So even if you aren't in one of those roles specifically, I still recommend sticking around for the conversation. And really quickly before we get into it, I want to be sure you Know that there are links in the show, notes for all sorts of great stuff, including my top recommended past episodes and books, a timestamped summary of the episode, ways to connect with myself and Mindy and more. It's all within the app you're listening to and@the brainybusiness.com 407. Now let's jump right in and go back to my conversation with Mindy at IIX North America.

Hello. Hello, everyone from the Purple stage here at iiex North America. For those who are hanging out on the awesome lounge space. Can you hear me? Get a yay. Hi. So excited that we're here today. My name is Melina Palmer and I am the host of the Brainy Business podcast. My company is also called the Brainy Business. It's all about understanding the psychology of why customers buy and employees buy in, and leveraging the power of behavioral economics. I am so excited to be joined here live today with Mindy Weinstein. Weinstein. Now, we got in the whole thing. We were talking about the names. I've known Mindy, she's been on the show, but this is our first time meeting in person. And then now I got all in my head about saying your name, which is like my new jam, I guess. So, Mindy, how about you say your name properly and introduce yourself?

Absolutely. So my name is Mindy Weinstein, and I am the founder and CEO of Market MindShift and also the author of the Power of Scarcity.

Awesome. And so, Mindy, how did you get involved in and interested in scarcity? Can you share that with everyone?

Yes. No. And I love starting with that question, because normally when I'm talking about scarcity, I get the. Why was that out of all the things that you could have studied, you chose scarcity?

Whereas I'm like, ooh, that's why I.

Love talking to you. You get just excited as I am.

Yes.

But when it comes to what influences us, really, there are certain influential things that trigger certain actions. Right. And certain things in our brain. And when I was going through my PhD program, I have a marketing background, all of those things, I was really curious, what drives our human behavior? What are those big triggers? And I kept coming up over and over again, scarcity. So every study that I would read, it was always scarcity. And it's because it's primal. It's how our brains are wired. So when we think about how do we influence others or how are we influenced? Most often it's because of scarcity.

Yeah. Yeah. And so, of course, let's get into some examples. But starting off with, you know, we think about scarcity and we as, you know, consumers just think like, well, scarcity, scarcity, it's just a thing as, as it is one thing. But there are actually multiple types of scarcity. Can you share a little bit about those for everyone? And knowing, you know, with an audience here of people in market insights, consumer research, you know, of course scarcity is so relevant and you know, how might we start to think about some of these different types of scarcity?

Yeah, yeah, absolutely. So there are four types but I even want to define how I describe scarcity. So when I'm talking about scarcity, I'm not talking about economics in terms of just pure supply and demand. I'm talking about scarcity in terms of the psychological impact it has. So scarcity is any type of restriction. And with that in mind, there are four types of scarcity. So there is supply related scarcity, there is demand related scarcity, there's time related and there's limited edition. And limited edition, which is just a twist on the original, is actually under the umbrella of supply or limited supply. And if you don't mind, let me define each of those. Just you got the four, even though I did the eight fingers, you got four. So with the four different ones. So going back to supply related, that is a restriction of supply. It could be that you're a consultant and you only have so many hours. It could be that there's only so many products made. It could be there's only so many seats. So it truly is supply related. Then there's demand related. And that's a bit more on popularity where you have scarcity because of high demand for something and then with time related, that's where you are really up against the clock. It's a time restriction of any kind. And so that's a lot of times where we see sales and different things like that, countdown timers and then as I mentioned already, the limited edition side.

Yes, definitely. Well, I know we're going to go I guess a little bit out of order with a question that I'm going to ask on this. But when we think about that aspect of the limited or sorry, supply, the demand related.

Right.

So as we're getting into the excitement that goes around stuff and we want to be buying in, I just looking back and knowing we're a herding species by nature and so social proof is such a driver for us on our behavior. So we see like, well, they're doing it, want to do it, you don't Want to be the last one. We get a little bit of that loss aversion, FOMO tying in. What I love about scarcity is it's not just. It feels like on the surface, we've heard of it, we know it, and then as you start to dig in, like you said, and we could of course nerd out on this until the end of days, but as you start to unpack it and you see all these other aspects of behavior, and I really love that idea of social proof and knowing how, whether it's because we want to be a part of the herd or, you know, you start to see that other people are buying that, you get excited, you don't want to miss out on the thing. Can you expand on that a little bit and maybe share. Share a case study or two?

Yeah, absolutely. So with that mentality, going back with how our brains are wired, we are a herding species. And so for survival, even for our early ancestors, we would watch what other people are doing and we would stay within those parameters. And we still do that today, even as consumers or employees, where we're looking at what is, what is everyone else doing, and we want to make sure that we are part of that because again, it goes back towards survival. Might not feel like that when you're waiting to get into a restaurant and you're like waiting 45 minutes, but you're still doing that, it's still that same psychological aspect of it. So in terms of, of just how does this work out there? I had the opportunity to interview the founder of Melinda Maria Jewelry and that company. When we talked now it's been a couple of years, they were earning about $20 million a year in revenue and they are a direct to consumer product. And so when I was talking to Melinda, the founder, she was saying that when she first started her company, she was always really concerned about running out of product. So again, jewelry, that's what they were selling mainly online. Just keep that in mind. And she was always concerned about that. And so really, by a fluke, one day they sent out an email letting customers know that they restocked something. They just put it in the subject line and immediately they sold out again. And she had said it was during a hyper period of growth. So they did keep selling out of products. But going back to what you were saying with social proof is not only did they have that email that said restocked in the subject line, when you clicked on it, it showed the reviews of that product. And what would happen in someone's mind is it Sold out. It's probably going to sell out again. I see social proof that people like this product. So I'm in. And she talked about now they constantly have wait lists for products. They'll show which product tends to have a wait list. So people know. They let people pre order. But it has to do with that knowledge of this is something that's popular, other people want it and I better take action now. And so just such a fascinating example of how it works. But it was by testing and like I said, accidental testing really in this situation.

Right. Well, I love any concept where we're able to take a slight reframe. We're able to do a test that doesn't have to be a whole test. Right, Right. So whether it's testing the ad, testing the subject line, testing the call to action in the email, testing the website, we can be changing out imagery, we can be doing things with color, just reframing how we're talking about something. And what I think is really interesting in the case of scarcity piece or anything, social proof, you know, as we go into these people feel like I shouldn't have to to say it. Like people should just know or they should care. If they like it, they like it. If they want it, they'll want it. And that's just not really how it works. And saying things like most popular or like buy it before it sells out again. Right. That like restocked that simple word. Always finding the truthful form of scarcity that we're able to put into play. We don't want to use artificial scarcity world ever. Don't do it.

No, don't do it.

But. And you don't need to because when we look at these four different types, there's always something that you can be sharing about and it's so great that you can be testing even without having to get an add on to your budget. Right. There's something else that you can be doing. See how it works and then try the next thing. Which speaking of what's another case study? Another thing?

Absolutely. But just even before I get into another one, what you said, that's actually huge, huge. To me, a huge positive of testing with scarcity is that I'm not talking about investing in something major and a whole different strategy than you've ever done and it's going to cost you all this money. I'm talking about the words, just the words. And we can't assume that our customers or employees or whoever they might be are just going to do something because we Think that they want to, you want to push them a little bit. And going with what you said, artificial scarcity, you never need to do it. And I will tell you, I have so many cases on that backfiring, so that's a no go for sure. But let's talk about another, you said case study. So I have one about limited supply or supply related. So I'm talking about the same thing here. I interviewed a former employee at a movie ticketing platform application and he was in the UX division. And so he was telling me about the whole world of movie ticketing apps, which is always fascinating hearing about different industries. And he was saying, you know, really within our business, it's hard to get that customer value, the lifetime value, and just getting people to continue to purchase. And so he said by accident, they ended up using a testing tool that showed them that they could really catapult sales with just the simple words. So what they did, this was back before we could all book our seats, because that's different now. Like we can see we're on whatever app it might be and we can pick our seat. This is before that. Well, how do you know if a movie's sold out? Do you like. It's a hard thing to really show, especially in an app like that. But what they started testing was using the phrase good tickets selling fast. Good tickets selling fast. Now step back and think about this. Okay.

How do you know what's a good ticket?

What's a good ticket? It's so just, yeah, that's a hard one to think about. And again, you're not really picking your seat ahead of time. So it's just a matter of did you show up to the theater early earlier than everybody. But they played around with that verbiage and they had to really do some research on it. So they only used it for certain geographic locations. So there was an easy switching cost. They needed to think about that. Other theaters in the area, they had to think about the time of day and also the movie type. So they did all of this and then they realized that if we really push this on our Saturday morning movies, we'll be able to see if it works. And so historically for movies, Saturday morning is not apparently the time that you just all are like, hey, I want some popcorn, I want to sit and have my soda and watch a movie. But when they implemented this phrasing of good tickets selling fast, they increased their sales of Saturday morning movies by 33%. And this was even more mind blowing. Is that ticket office sales of the box office is what they would look at. Increased by $100,000 in the different areas. That's significant when you times that by all the different box offices out there. But it just showed that using verbiage can make a difference.

Right? Right, definitely. And again, it's also this, that fear of the unknown. Right. Of where, like both on the side of do other people like this? Should I like this? And also like, well, am I gonna want to be going when there. Are there seats left? Is there anything? And so even that little bit of word choice. It's funny how our brains flip things when we look at something like scarcity. Like, logically, I should want to go. If I can go to the same movie at any time, I should wanna go when nobody else is. I don't need to sit with everybody else. But being able to say, oh, other people are doing this, I should jump in, like knowing that happens. It's I think this really important thing for people. When you're setting up the language you're going to test, when you're setting up the ad, the email, whatever it is, and if you're going to be, you know, testing, even if you're trying to recruit people to be a part of your focus group or whatever it is, you can be using scarcity language really in anything in the way that you're going to communicate. But the thing that when you're sitting and using your logical brain and saying, what should motivate people? Like, if I was a person, what.

Would motivate me if I was a person?

But what we think it's going to be, it often isn't. And so understanding what actually drives behavior and knowing some of those rules to try and test and incorporate. And I love that idea of being able to test when you just get to try something. And so often what I know from people I've interviewed on the show and different things from my books too, is like, there's so much that you throw in the weird thing and it often performs way better than you think that it's going to. And so giving yourself permission, I think, to play around with some of that language is really something that you can be doing and it gets you. Some of those use cases always have a control group. Right? This, this audience knows. Right. With a lot of that. But you can't say we had a 33% increase if you don't know what there was exactly.

You have to be able to measure it.

So.

And I think what's also really important with what you're talking about and how to implement scarcity is. It is the wording, but it has to be believable. It 100% needs to be truthful because people know, I mean, we're in a digital age, they'll know really fast whether it was truthful or not. And it has to be something that is an identifiable factor that made the difference. So what I have found some people get really excited when I start talking about scarcity and they're like, I'm going to do them all. No, like, pick one thing. Of course I know I'm speaking to an audience that understands that, but just in case, pick the one thing and that's what you're going to go with and see if it works. But you have to have those other things that the believability, the truthfulness, the social proof like you're talking about, is this something that I can trust? And then also credibility on even who is telling me this? So even if you're using a, let's say, spokesperson in your ads or something like that, well, is that person believable? So it all goes together, right?

Well, and with all of that and we think about the truthfulness in it, we may have the best of intentions with scarcity, right? Where we say, so when we're in that cold state, we're doing the planning and we say we're gonna run a sale and it's gonna end on Friday at midnight and you have to buy by Friday at midnight. And then there won't be any exceptions. And then, you know, a past client or somebody who could be a good fit sends you that email Saturday morning. Or we'll say it's like Monday and say, oh no, we missed and we didn't even see, see it. Can we get in? And you feel so compelled in the moment to make the exception. But then the scarcity is gone. And like you were talking about on that truthfulness, that trust, that loyalty that gets built when we get to the other side the next time if they know they can just make that exception. Or we've all seen the ads where it's like we extended it because it was so popular. And then you go, and maybe I'm sure there's at least one of those that's true. But like, is it also extended because you didn't sell it and like the message that can be giving to people that then the next time you say something has a limited time or a limited amount, they may not believe you and you're losing, you know, the power is not there from the language and the tool of scarcity if you're not upholding it.

Right? No, that's, I mean all of us, you know, as whether you are the person doing the marketing research, you're the one that's putting the promotions out there, you're the business owner, you're who, whatever role you might be in, it is in us to say, okay, we'll make that exception just like you were saying. But what I found as I was doing my research, so understand too when I keep saying research, I studied this from an academic perspective for a very long time. Did my studies, all of that, did case studies of as well. I've also been applying this. And so one of the things that we found with this is that scarcity, as you mentioned, can build loyalty, which is so counterintuitive where you're like how does that possibly create loyalty? What does that even mean? It even creates community as well and trust like we're talking about bit all of those are out the window if you say one thing but do another. And so, so I well urge people, don't do that, don't give in. Say it's truly, the sale is truly done, the event is truly closed. No, we can't take on this other project. And so being really clear about that because it does build the loyalty. And the next time down the road, when you have something that you are offering and it has scarcity attached to it, people are going to listen and they're going to go, oh, I remember what happened before. They're going to file that away and now they're going to take it an action. And so with scarcity, I mean it helps that decision making process. But there does have to be that believability, that trust and you'll get the loyalty and the community from it.

Right? Well and the loyalty piece comes with the anticipation, our dopamine. There's the delightfulness of like, am I gonna get in? Am I gonna like make it? You have the excitement that comes from that and then you are thankful that you got the opportunity or you got picked. I give in my book the Truth about Pricing, which of course references a lot about scarcity from your book Power of Scarcity that I talk about Hermes and the Birkin bag, right? Oh yeah. And I love this example especially because with the Birkin it's that you get on the used to be a wait list. They don't even do that anymore. To be given the opportunity to pay a huge amount of money someday for a bag that you may or may not even like the color or the size of. Because you've been selected. But the idea of being like part of that community, part of the club, because they're so scarce and limited. And now Hermes, you have to buy enough other Hermes products, have a good enough relationship with a sales associate that they will put you up as a candidate to even be able to get a Birkin. And that, like, loyalty, delightfulness and like, if you get chosen for the, you know, pea green small bag is like, I need to buy smaller stuff and change my whole wardrobe to match the.

Match the bag. That's what we do, is what we do. But it's because I want to feel special, too. I mean, so that's the thing with what you're talking about in that example, especially luxury brands, they understand exclusivity, which is limited supply or limited edition. So it's either one of those things. And people want to feel like they can connect with that brand and get that community right. But it doesn't always have to be luxury. So I had the chance to interview the founder of 1-800-Flowers, but they own Harry and David. And Harry and David has created communities, sub communities within their huge database of 7 million customers of these segments of people who value certain types of products, products or goods or cooking, you know, interests. And so that's a sense of community. And people will buy within that community. But they also even use the whole thing with those communities that there's only 25 people at a time and you see that and they'll let you know how many are open, but you feel special as part of it. So again, if you're selected, you're like, I'm in for whatever, but I'm in.

I made it. I don't know what it is, but I'm so excited. Right?

I'm so excited. I won.

I won. Yes. Yeah. And it is that bit of that tribal competition aspect, too. So we've been talking about scarcity with product quite a bit. And even, you know, seats at the theater. Right. There are only a certain number of them. What about in services? Right. And it may feel like I don't have. I don't have scarcity in the same way, which I of course know that this is true, but we feel this way. So what type of opportunity does someone have when we're talking about a service. Service that we provide when it comes to scarcity?

Absolutely. So scarcity applies to services too. So let's say that you. I'm going to look at two different hypothetical examples. So let's say you're In a consultancy. So you are a company that consults and you only take on so many projects because you're what's actually in supply is your time. So there's only so much time available. Like it'll go away.

It's actually the most scarce is for sure. But yeah, I won't interrupt again.

No, no, you're good. So your consulting hours are truly limited. And so in a service related business, it is perfectly fine to say that our company works with 10 clients a year. We have two openings right now and I feel like a lot of us will shy away from that because we're like, well, we don't really want to give our numbers or we don't quantify it. We might just say like, oh, we're selective. Okay, well what does that mean when you say that? So being able to quantify it now, let's say though you're in a software business because that's one other one I hear quite a bit too. And so a little bit different. But that one, you could do things like a limited edition bundle that you're offering or you could still use the whole idea of exclusivity and have VIP membership or even beta users for something that you're doing. So especially going to testing, if you want people to test something, pick a very exclusive group to do so and let them know that they can go back to, they've been chosen, they're special, so you absolutely can use it outside of products.

Right, right, definitely. I love even just if we go back to that example for people and we think about the framing again. Right. Of saying, well, we're very selective with who we work with. Yeah, okay, right. Like I'm not motivated to go do anything and it almost feels a little bit demotivating. But saying in the way of when you have those numbers, like you said, we have, we only take on 10 clients at a time and we have two spots available right now.

Right.

We have two available right now. Or we have time to start a project in July. Right. Would you be interested in taking. We only start one new client a month and the next opening is in August. Would you like to earmark that time.

For you be on the list to be notified. And so that is another thing I love that you said, said that because that is something that companies will do when they understand the scarcity part of it. And again, our innate thought is, well, I don't want to lose them, I might lose them.

I don't even know what the project will be, but I want that spot.

Right and so you won't necessarily lose that potential customer. I mean, if they want to work with you, they're going to sit on that wait list until you say you're ready. And it also goes back to all the other concepts we've been saying. It shows your value, which is the whole idea of people are wanting to work with you and hire you like there's something great about you. So they're gonna sit back and wait till it's their turn.

Right. And in that consulting space too, where people are more invested in the work at the time where they want to be able to do that with you, they're gonna show up to the sessions like they know they got this valuable space that could have gone to someone else. And if they miss it, they'll have to wait a while before it can come back again. So if we now pivot this a little bit, let's talk about internally at an organization, because I know especially here at IEX we have a lot of people that work inside of a brand. Maybe you're having to deal with getting budgets, getting maybe too many projects put on you at a certain time, or trying to help defend the time of your team. As we're looking at scarcity, we're asking for an FTE and looking at all these different aspects of scarcity with within the organization, how would you look at opportunities for people to be leveraging scarcity within their interpersonal relationships?

That's a really great question. So within an organization, so especially in terms of, you know, market research, which that's what we're here to talk about, you're going to have a team and your team has so many hours still going, kind of similar to the consulting example, has so many hours that they can work. So the bandwidth, like what is available for projects. And so really taking that time to quantify, like this is how much time we have available. Here are the projects that we have right now. This is the estimated time for these projects and these initiatives that we're giving. That leaves this amount of time, whatever that is available, to do anything else asked of us. So scarcity in terms of it is actually supply related scarcity. And we're talking about that, even though I'm saying time, it's not, it has to do with the quantity of what you can supply to them and showing that and saying, okay, well one of two things, if we're short, we need to hire, we need maybe need a bigger budget, so maybe there's something else that we can do that bring in to automate some of our processes. But this is where we're at. And so when you quantify it like that, it does show scarcity and it really like triggers the brain of like, okay, we got to figure this out. Might be reprioritizing and hiring more staff and getting the software that you've been wanting because you know, it would make things go faster. And so that's a huge thing. Now the other thing I would say, and this really elicits the loss aversion side of our brain is also you can mention that, you know, this is where we're at looking at our competition. We are not going to be able to keep up with them and they're going to surpass us. That right away you're like, I don't want that. It ignites the whole I want to win, but also I don't want to lose out on opportunities because we have the scarcity within our team, our resources or whatever it might be. And so those two things are huge and they're truthful. And it's just going to the psychology again, how our brains are wired. So with all now I'm on my scarcity, I've been on my scarcity soapbox, but I'm gonna get back on it again. So everything that we're saying, none of it is me that it's truly the way it is. It's just are we communicating that in a way that's getting action so getting that other person to make the decision decision that we know that they need to make. And so we're just pushing that sense of urgency is what we're doing. But it's ethical. It's a need that needs to be filled.

And it's honest like you're saying, it's that people, it's easy to say like, well, they know my time is scarce. Everyone knows that. So we shouldn't have to bring it up. But if you don't bring it up, have it called to mind. This is leading into some of that priming, right? So if we say the right thing at the right time, it impacts the choice that someone's going to be making and what's relevant and top of mind for them in that moment. So if you're aware of what's going to be the right lever to pull and how to be talking about it in a way that is more likely to nudge behavior. The interesting thing I think about this is when we're looking at being, you know, so we can get that time pressure right. So being risk averse versus loss averse and how this, this flip sort of happens for us when we have lots of time. It's easy to be saying, oh well, I want to look at all the options, I want to be investing. And you can have people just like spiral on and never make the decision that they actually end up wasting a lot of time and resources, never moving forward. And it's scary to change. Right. Our brains are built on predictability and the status quo and what's worked in the past. And we like to stay where we are safe even if we have this big dream of something we want to accomplish. It's scary if we get that wrong. And so we can waste so much time just researching, thinking about it, deciding we're going to look up one more vendor, have a meeting or do whatever. But then there's the one that says, oh, but we only, we have one spot left and it starts in six weeks, would you like it? And then they make the decision so fast and you say, but no, we've been talking with you for three months or a year or whatever, like, why weren't you ready to go? And that scarcity nudge can be enough that it's helpful for them actually to just push forward. And you actually again, end up saving a lot of budget by moving forward on a lot of those good projects, right?

It does, because it cuts out a lot of that time with the distance decisions. And again, with all of this, you're offering something that's great. So even if right now you're like, I don't know if I could do that if I would feel comfortable with it, you know what, just communicate what already exists and that's going to make a huge difference and that is going to push people. But really our brains are tired, just all of us. And so we want that actually the trigger that's going to help us make the faster decision. I mean, that's really what your brain does want. Even if you're kind of hee hawing on your decision decisions. I mean, it wants to be able to see that proof that this is the right one, this is what other people are doing, this is valuable. And I'm going to choose you.

Right? Right. One of the things that I found that I think works really well in tandem with scarcity is when you can tie in a really good when it makes sense, whether it's a great return policy or that 100% satisfaction guarantee. And not everyone can do that. And I get it, though. I do challenge you say, if we were going to do one, what might that look like? And it Also, it nudges you as the provider to have products and services that are stellar enough that people won't want to take advantage of whatever that return policy is more often than they are nudging to buy. And I love giving the example of Costco. I'm such a fan of all of what they do in the way that they provide goods and services. But Costco has so much scarcity there. And people know if you're a Costco member and you go shopping, you see the thing, especially when it's like clothes, some of these other products, like, I'm just gonna get it and I'm gonna buy one of each size and then I'll have the kids try them on and I'll see if I need to take something back. But if I don't do this right now, then it might not be here. Even when I do the loop around the store, it might not be here when I get back. And Costco truly has the, like, it's gone. Sorry. Right. Yeah. What's, what we have is on the floor and you can see it and, and like that's it. Right. And. But because you can return it if it doesn't fit or you don't like end up liking the pattern or whatever that is, it makes it to where it feels safe to go in and like give in to your brain's love of scarcity and loss aversion as a shopper. And you don't. I don't like, I'm not upset set at Costco for having a limited quantity. I know it ties in with the membership model and keeping prices down and all of this. And because I have the option to return, I'm not mad at them that the items aren't available and aren't there. I would be mad at me for not taking advantage. And like you said, I'm learning for the next time. So I think there are things for brands to be able to learn that like, it may feel scary, it may feel difficult. And in that moment where your brain is going to be saying, oh no, no, they're going to hate it. They're going to be so mad. And we just don't see that in real true life to where I was saying, like, if I were a person, what would I want to do? Like trying to channel into how we buy and act instead of how you think people should behave. That's what behavioral economics and the work I do is all about.

Yeah. No, and Costco, Costco is a great example for scarcity in general, but it's what you said, it's, you know, you know it's not gonna be there. That's how they always have been. That's part of it, you know, when you're going there. But the fact that they can back it up, like you said, that's huge. I didn't even know that I wanted a cactus shaped tiki torch until I was at Costco. But I didn't make the decision right away and now I can't get it. So I keep going online. What am I gonna do with that? But anyway, that's a whole side note, but it happens because our brains focus. And so the other example that I could give you too. So this is company. They, they're an E bike company. And I'll give you the shorter version of the story, but they bootstrapped their business by really collecting the money up front for the bikes and then producing them. What you're thinking, like, how why would someone give you your money if your brand new company know knows about you? But they have done lots of different things with scarcity. So one of the things though, that they did to build credibility is they sent one of the bikes to an inventory influencer and said, if you like it, can you post a video? And the person liked it, posted a video. So this bike became very popular. And so they had a very long wait list. They had the pre orders. I mean, it was taking several weeks for the time that you purchased the bike to get it. So think about that from a consumer perspective. You might be thinking your customers, there's no way they're going to be angry because they spent that money. They're going to want their bike. But what they did really well, which goes with your Costco example, is they decided that they were going to have excellent customer service, that they would be proactive in contacting these customers versus just waiting for the customer to contact them and say, is it ready yet? How much longer? They would constantly, this is unbelievable, get on the phone. Do we do that anymore? But they would get on the phone and they would call their customers and say, this is where we're at with it. Just wanted to let you know. So they're very transparent. Transparent. And because of that, they kept people happy. And they were a really great example too, of community, because their demographic very much are Facebook users. And so what would happen is people would get a bike and they would post it on Facebook, you know, do all the tagging and all that. And then people who are waiting for their bike would see it. Then those people would end up Having a conversation. So they ended up with all of these communities on Facebook of people waiting for their bikes or already had their bikes. But it was that customer service aspect. So they had the credibility, social proof that got people in the door. But to keep them happy was that customer service. And then again people talk and so on Facebook there was a lot of just positive sentiment there.

Well, and I like that proactive. It's like when you have a higher end item that's more expensive, you have less customers, you know who you can be making those calls. But it's like their version of the pizza tracker, right? Yeah. Domino's Pizza cracker. We want to know where things are that not knowing is more painful than just like being in the line or whatever it is. And so understanding that aspect of behavior and helping to build again that anticipation, the excitement say oh your bike has made it to this stage. We're so excited. You should be getting it soon. That that's going to make them really happy and wanting to move forward. So as we go to wrap up our time together, it's amazing that we been. We already know we could talk forever. What would you say is for someone who you know, you said to pick one thing right. So we could do a quick recap and then if you are going to give people like picking their one thing, how can they choose? Is there a best one to start with? You know what's the recommendation there as they're looking to use Scarcity.

Yeah. Okay. So there's four. So remember that. So we have limited supply also supply related. So same thing. We have demand related, we have time related and we have limited edition. If you're not sure which one to use, I actually would lean towards the supply related because at the very, very least you can create some type of VIP group early users on something. You could likely quantify what you're doing anyway and share products. So I feel like that is one that no matter what your business is, there's a way to figure it out creatively.

Yeah. Awesome. Well indeed, as we go to again be closing up here, do you have one last tip or thought or thing you wish I would have asked?

So I would say that's a really, that's a really good question. I would just say try it. I mean that's my last tip. Try it. Don't think that you understand scarcity because that's just oh, something's running out. It's so much deeper on a psychological aspect that just give it a try and you're gonna see results from it.

Right. Give it a try, jump out there, do it and have the control group run it as the test. Whether you know where you're coming from, know what you're trying to achieve, test, do something and track. So then you can go brag about the great success you had. Because we know that scarcity is so powerful. So as people are looking to now, everyone's so excited to learn more, to connect with you, to get your book and whatnot. You know what's their best next step to do that.

So make it really easy. If you go to powerofscarcity.com so that's the name of my book, powerofscarcity.com you'll be able to order the book from there. But I also do have a cheat sheet of all the things I just talked about. You can just download for free that talks about the different types of scarcity and who they work for, what type of customer.

Perfect. And maybe connect on LinkedIn. You can find either of us. And for those who are listening here after the fact, I'll have it in the show notes for the Brainy Business podcast. But again, I'm Melina Palmer, this is Mindy Weinstein. It's back. I'll never, I will never be able to not think about it as I go to say the names on that. And yeah, we've been talking about how the brain really works, understanding scarcity and products and services, internal communication, external with customers, thinking about our brands, looking at budgets, all sorts of things we've covered today. So just thank you again so much for being here with me today. Thank you everyone who's been here with us at iiex Behavior. Thank you, Green Book for having us. It's been a lot of fun and yeah, I hope everyone enjoys the rest of the conference.

Thank you.

Thank you again to Mindy Weinstein for joining me on the show today and of course for Green Book for having us at that iiex event. What got your brain buzzing in today's conversation? For me, I really love talking and thinking about scarcity. The main reason is it's one of those concepts that everyone knows but no one really thinks about enough to realize just how complex it really is. I think it's one of those concepts that gets us to understand how much is really going on in our brains. And by seeing all the facets of this seemingly simple concept, it can sort of unlock the barriers we place on ourself in this belief that we already know something. It's like as we said in the conversation today, on the surface, we might say that scarcity is scarcity and leave it at that. But as Mindy shared, there are four main types of scarcity and as we start to overlap the other concepts, social proof, loss aversion, time pressure, it gets so nuanced and there are so many underlying opportunities. A chance for you to take that one little extra step that can help you to stand out from the competition, to be a little different and relate more with your customers. It's really cool and such a fun way to celebrate the six year anniversary of the Brainy Business. Thank you again for being here and listening to the show.

By the way.

And a special thank you to everyone who has provided five star ratings, left, reviews, subscribed and shared the show on social media and otherwise over the years. And if you feel so inclined, now is a great time to do so as well. To help spread that brainy love, please be sure to tag me when you share on social media. You'll find me as the Brainy Biz pretty much everywhere and as Melina Palmer on LinkedIn. Thanks in advance. I appreciate you. As we close out the show, don't forget about those show notes which include links to my top related past episodes and books including the Power of Scarcity, Ways to connect with Mindy and more. It's all waiting for you in the app you're listening to and@the brainybusiness.com 407. And thank you again to Mindy Weinstein for joining me on the show today. It was a delight to chat with and learn from you. Join me Tuesday for another Brainy episode of the Brainy Business Podcast. It's going to be a lot of fun. You don't want to miss it. Until then, thanks again for listening and learning with me. And remember to be thoughtful.

Thank you for listening to the Brainy Business Podcast. Molina offers virtual strategy sessions, workshops and other services to help businesses be more brain friendly. For more free resources, visit thebrainybusiness.com.