I drove by a sign in my neighborhood recently advertising a new dental practice that had just opened.  The sign read “Accepting New Patients”.  It was a temporary sign implying that at some point this practice might not be accepting new clients.  It would be full.

My immediate reaction?  “Wow, I better get in fast!”

This reaction is quite normal according to Robert Cialdini, author of several books including, “Influence: The Psychology of Persuasion “.  The sign communicates one of what Cialdini calls the 6 Laws of Persuasion.  Namely, the law of Scarcity.  We are influenced to take action where this is a limited amount of something, when demand exceeds supply.

Certainly in the country and region I live in, there is a shortage of medical professionals.  Demand is truly greater than the supply, and therefore there is scarcity in the provision of some of these services.

There are other industries where this law comes into play often.  We see it in the education system – we apply to be accepted into Universities and establishments of higher learning (where we are called students, not clients).  Most live entertainment events have a limited number of clients (seats) they can sell.  The same goes for art reproductions or anything labeled “limited edition”, and to a certain extent, media advertising space. There is only one back cover on the Harvard Business Review each month, and only so many 15 second Superbowl commercial slots.

Scarcity and other methods of persuasion

In business, our sales and marketing activities are designed to persuade.  We are looking to persuade prospective buyers to take some type of action – click the “Buy Now” button, sign the contract, pick up the phone and call us, etc.

If we want to improve our marketing and sales effectiveness, we must start by clearly defining the path to purchase.  What are the stages or steps that a potential buyer goes through to move from not knowing anything about our company through getting to know us, identifying a need we can address, and ultimately making a ‘buy’ decision?  This process is different for every firm, and can vary in duration from seconds to many months depending on the complexity of the decision and the level of trust required.

Once we have defined the process steps, we can then look for opportunities to improve the process and possibly embed persuasion elements aligned to Cialdini’s 6 Laws of Persuasion.  Each of these factors increases the level of persuasion and the tendency to act:

  1. Scarcity – the extent to which there is limited availability of a product or service.
  2. Reciprocity – the human response to feel obliged to return favors or give back when we have received something of value from someone.
  3. Social Proof – the awareness that other people like me have purchased the product or service.
  4. Liking – the natural tendency that people have to want to do business with people they like.
  5. Authority – the sense of obligation or duty to people or information from an authoritative source.
  6. Commitment – the tendency for people to act consistently with their past decisions.

Client Applications

The mindset of considering all potential new clients as “applying” to work with us leads to several positive outcomes.   Firstly, if an application is required it immediately implies scarcity and can make our services more desirable to the potential buyer.

Secondly, if we use an application process for new clients, it forces us to more clearly define our target market.  The application can then assess ‘fit’ against the target market criteria.   Does the potential client fit our ideal in terms of size, type of firm/person, ability to pay for our services, etc?  If these criteria are met it will lead to a better client-supplier relationship.   Conversely, it can identify early if there is poor fit, and if it would be better to decline working with a particular client because of misalignment.

Finally, the idea of an application or interview process for new clients changes the whole tone of the conversation.  It shifts from one party holding all the power (the buyer) to both parties working collaboratively to ensure a high-value relationship through the provision of products or services.

So when you think about your new client acquisition process, is it treated as an application?  Are you assessing fit?  Is the conversation one sided or is it a collaborative discussion leading to a mutually beneficial relationship?

Article by Tim O’Connor