A key goal of my weekly articles is to highlight new research on what it takes to communicate in today’s short attention span world. This week’s article outlines how using “the law of scarcity” makes you more effective with existing clients and more attractive to prospective clients. Whether in booking appointments with prospects, getting key clients to come to events or winning over referrals, communicating a sense of limited supply helps you achieve your goals.
In recent articles I have discussed research by Arizona State’s Robert Cialdini on the laws of persuasion. One of those laws is the law of scarcity; believing that something is or will soon be in short supply increases demand for that item.
This is not a ploy to manipulate clients or stampede them into buying. It’s not a broker saying, “I’ve only got 1,000 shares of this hot new issue. If you don’t decide right now, chances are these shares will be sold out by noon” or a timeshare salesman saying, “This special price is only available during this meeting.”
The law of scarcity is about structuring day-to-day conversations with existing and prospective clients to legitimately limit your availability.
Meeting with an elusive prospect
How to win multi-million dollar clients
Tired of ho-hum conference speakers? Dan Richards delivers leading edge keynote talks on what it takes to
attract high end clients today.
To energize your next conference, click for more information on Dan's speaking topics and to hear from past clients.
Dan Richards
ClientInsights-President
6 Adelaide Street E, Suite 400
Toronto ON M5C 1T6
(416) 900-0968
If the perception that supply is in unlimited demand, then perception of scarcity makes that same item more attractive. In Why Landing Clients is Like Dating, I talked about the high school dating scene. A guy who tells a girl that he’s free to go out any day for the next month dramatically reduces his chances of success. In attracting new clients, as in dating, you need to communicate that you’re interested in doing business but not desperate to do so.
Here are some ways advisors accomplish that:
-
In Four Ways to Get Prospects off the Fence, I described an advisor who was referred to the CEO of a public company and had an extremely positive initial conversation. They agreed to a follow-up meeting, but then the advisor ran into a wall with no response to several voice mails, emails and calls to this CEO’s assistant.
At that point he left the CEO one final voice mail with an email that followed, along these lines:
Hi Jim. Sorry we haven’t been able to connect. I have capacity for four new clients in the next quarter. After our last meeting I thought we’d work well together and you might be someone I could help. It sounds like you’re busy right now … I’ll touch base in about three months. Feel free to give me a call if you’d like to talk in the meantime.
That email positioned the advisor as someone whose time was limited and who was interested in working with this CEO, but not desperate to do so. As it happened, he heard back from the prospect to schedule a meeting, but even if he hadn’t, this positioned him to pick up the phone and call back in three months.
-
Telling prospects that you’re not a good fit for every client positions you as a professional who is selective and limits the clients you work with to those that you can help. During client reviews, a veteran advisor named Sandra tells clients that she has the ability to take on four new clients each quarter. She asks to take three minutes to review the three key qualities of the clients that she can help the most in case that client is talking to someone who is looking to make a change.
And when a prospect is referred, Sandra refrains from talking about her approach or what she does. Rather, she tells prospects that the initial meeting is designed to talk about their situation and to answer their questions, but also to ensure that she would be a good fit to help them meet their needs
-
An advisor named Bill tells prospects that he schedules Wednesday afternoon for meeting with potential new clients. When a prospect is interested in meeting, unless the situation is urgent he typically suggests a Wednesday in two or three weeks. He’s not rigid about this and will make exceptions if Wednesdays aren’t good for a prospect, but he has found that conveying that he has only so much time to meet with potential new clients increases his appeal.
-
Some advisors tell prospective clients that they will meet three times with someone who is potentially interested in working together. The first meeting might be half an hour for them to talk casually over coffee and get to know each other. At that first meeting, prospects can get initial questions answered.
If after that first meeting both the advisor and the client decide that they want to proceed, a second meeting is scheduled to go through the details of the client’s financial situation. This includes a review of their tax returns and investment accounts. At that point a third meeting is scheduled at which the advisor presents specific recommendations.
-
An advisor named Elaine schedules a monthly sandwich lunch at her office for clients interested in talking about what’s going on with markets. Since she began saying that there are only eight spots available (the size of her boardroom), she’s found the level of interest has increased. And she has also found that this is a good way to get prospective clients engaged. She tells them that while this lunch is targeted for existing clients, she does have one spot available should he or she be interested in attending.
Elaine also runs larger quarterly evening talks that feature outside speakers to which all clients are invited. While the response to these talks has been generally good, she historically had difficulty getting her larger clients to attend these. That changed when she began inviting targeted clients to a private reception with the speaker at these talks beforehand and made it clear that this reception was limited to her best clients.
As you think about your conversations with prospective clients, consider whether employing the law of scarcity can help you move the discussion forward.
These articles describe additional research on what it takes to communicate effectively today:
What Advisors Can Learn from Bernie Madoff
The Question that Quadrupled Response Rates
The Five Seconds When You Can Lose a Prospect
How to Get Clients to Open Your Emails
A Single Word that Improves Results
The Question that Gets Prospects to Act
Three Ways to Make Your Message Resonate
Nine Words that Saved $600,000
Tapping into 'The Power of Three'
Dan Richards conducts programs to help advisors gain and retain clients and is an award winning faculty member in the MBA program at the University of Toronto. To see more of his written commentaries, go to www.danrichards.com or here for his videos.
Read more articles by Dan Richards
A key goal of my weekly articles is to highlight new research on what it takes to communicate in today’s short attention span world. This week’s article outlines how using “the law of scarcity” makes you more effective with existing clients and more attractive to prospective clients. Whether in booking appointments with prospects, getting key clients to come to events or winning over referrals, communicating a sense of limited supply helps you achieve your goals. 
