Tools

It’s that time of year again. From carol singing and nativity plays to office dos and kissing under mistletoe, people are getting into the Christmas spirit. But when it comes to persuasion, one particular seasonal phenomenon — the ‘must-have’ Christmas toy — can provide us with some really useful business insights.

Whilst the toy itself is different each year there is one thing that they all have in common. There never seem to be enough to go round.

Social scientists have long known about how people’s behaviour changes when products are in short supply. Whether its parents joining queues outside toy stores or music fans paying over the odds for sold-out tickets; when items are in short supply they become more attractive.

Persuasion researchers have found that people are especially influenced by product scarcity if there is competition for the products concerned. In one experiment, researchers offered people chocolate chip cookies and asked them to rate their taste and quality. Those given a jar containing ten cookies rated them as less desirable compared with people given a jar with just two. But it was the people who were first given a jar of ten cookies and then told they had to exchange them for a jar of two because there weren’t enough to go round that gave the highest ratings of all. It didn’t seem to matter to anyone that all the cookies came from the same box!

But perhaps the most elegant and effective use of the principle of scarcity concerns the idea of loss language. Customers are routinely inundated with messages about how much money they can save by switching from one supplier to another or choosing one product over an alternative. But it turns out that this strategy might not be the most effective. In one study researchers offered energy reports to homeowners. These were accompanied by a message about the estimated cost saving. “Carry out these measures and save £100 a year”. Surprisingly few homes took advantage of the savings. That was until the researchers made one small change to their message. “Fail to carry out these measures and you’ll continue to lose £100 a year.” The result? An immediate 150 per cent increase in homeowners who were persuaded to implement the changes.

It seems, then, that anyone in business can make their products and services more persuasive by doing nothing more than pointing out what is unique about them and communicating to potential customers what they could lose if they fail to consider your offering. Small and largely costless changes that could make a big difference to your business.