Hook Experts on Scarcity

Why is it that because of the global financial crisis, consumers have become willing to spend more time and money to acquire scarce items?
     Enough months have elapsed since the start of the crisis for high quality research to be conducted about the effects. That connection between fear of financial deprivation and the appeal of scarcity is a finding of research at New York University. In one of the studies, participants who felt financially deprived not only consumed more M&M candies than did those who felt financially well-off, but also were much more likely to choose the scarce colors above the common colors.
     I think the answer to the “why” goes back decades and is found in work conducted on the opposite coast from NYU, at University of Southern California, and was about career paths, not consumer psychology.
     The researchers had noted how there were successful sales representatives at IBM who chose to become sales managers for the additional compensation and ended up failing in the management positions. And at IBM, there were chemists, physicists, and engineers who, in order to earn more, chose to become managers of chemists, physicists, or engineers, only to find that they yearned to go back to their specialties.
     These researchers then distinguished between “Linears,” who want power and authority, so are motivated to move up in the organizational hierarchy, and “Experts,” who prefer to get better and better at a technical skill.
     The Experts want job security. The USC researchers said that the mindset left from the Great Depression of the 1930s produced more Experts. The Experts said, “If I have technical skills nobody else in the organization possesses to the degree I do, bosses will think about it a real long time before even considering letting me go.”
     What the Experts were aiming for concerned scarcity. Acquiring skills which were scarce. Similarly, the more recent Great Recession aroused in consumers a desire to be experts and to place a premium on scarce items. “I’ll corner the market, and when others need these items, I can make them pay lots.”
     The NYU researchers found the scarcity appeal disappeared when study participants were told their scarce items were not highly marketable.
     If you, as a retailer, see a shopper flaunting expertise, trot out your scarcer items. When a product or service desired by consumers is in short supply, you can command a higher price.

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