Sometimes nothing is as it seems, both in business and in life.  And sometimes that’s completely by design, especially in the realm of marketing, advertising and the crafty spin of strategic public relations.   Whether we realize it or not, all of us are bombarded daily with overtly manipulative techniques and propaganda every time we see or hear an advertisement, go to a singles bar, attend an art gallery opening or rush to the store because there is a sale going on.   Or worse, when we pull into a gas station for a fill up under the belief that we are in the throes of a gas shortage.  What we believe to be an advertisement (sometimes thinly disguised as an announcement) or a market condition is often nothing short of a Machiavellian ploy to control our thinking and our behavior, much of it cooked up by savvy copywriters who understand something about the human psyche that the rest of us don’t.  Yes, the pitter–patter of feet rushing toward the check stand is music to the ears of the folks who create the phenomenon known as demand, and how they do it is something that is available to anyone with something to sell, be it a product, an idea or simply themselves.

            So how do they do it?  It all boils down to this: less is more, and the less of it there is – whatever it may be – the more people want to possess it.  Because the key to demand is supply – control the latter, and the former becomes your oyster.

Speaking of singing, many popular songs become anthems for our times, but few have the socio-economic depth of truth of the classic tune, “I Want It Now,” by the rock group Queen.  When Freddie Mercury was strutting across the stage in his jockey briefs belting out that catchy little chorus in all its glorious redundancy, he was tapping into an eternal truth about human behavior: when people want something bad enough, logic and civility suddenly subordinates to the perception of need.   The stronger the need, the less attention people will pay to logic in the attainment of what they desire (the mob mentality).  To illustrate, let us remain with Freddie for a moment to consider this: if the guy hadn’t died young, he wouldn’t be nearly as popular as he is today.  You can picture him sitting on a cloud next to Elvis, Marilyn, Buddy Holly and a heavenly choir of other dead singers and actors and artists, raising a toast to immortal success which owes much of its longevity to the simple fact that they are no longer alive.  We can’t have them anymore.  There will be no new Freddie and Elvis music, ever.  Which means that the music we do have is suddenly much more precious to us than that of equally talented artists who continue to tour – Bono, Mick and Bowie come to come to mind – and, because of age and overexposure, don’t compare to the genius and cache’ of their early careers.

The psychological truth underpinning this phenomenon is known as the Scarcity Principle, and the application of it in marketing, job hunting, seduction and everyday personal communications – not to mention the manipulation of prices in various markets – is known as the Supply-Control Technique.  And you don’t have to have a seat at OPEC to put it to work, you only have to wrap your mind around the inherent power of human desire to make yourself orders of magnitude more effective in getting others to want what you’re offering.  And the first step in doing so is to threaten to take it away.

A Preponderance of Scarcity

            Like gravity and gas prices, we are subjected to the Supply-Control Technique each and every day, and in some cases we have been raised on it.  Mothers teach their daughters that playing hard to get is a strategy that makes them more attractive to boys.  Toys and privileges are withdrawn in exchange for proper behavior and penance.  Birthdays are special because they only come once a year… and so on.

            One of the most common and powerful techniques in advertising is the limited time only ploy, or the while supplies last approach.  The perception that you must drop everything and rush to pick up whatever is being advertised may or may not have any relationship to the truth; more likely, a more forthright pitch would say while these prices last, since it’s the sale that’s most likely going away, not the product.

            Sometimes, as is the case with many so-called sales, scarcity is a completely contrived dynamic.  Where natural resources are concerned, we have no control over the planet’s supply of diamonds, though the DeBeers Corporation certainly isn’t above buying up global inventories in order to keep prices elevated.  Nor did the U.S. government apologize for paying farmers to not grow certain crops in order to keep supply in check.  Both are contrived realities of the first order, and they are accepted practices in a world in which supply and demand economics is as pervasive as gravity.  In the 1970s when we experienced the first of what promises to be a decades-long stretch of perceived shortage of gasoline, cars lined up for blocks to fill their tanks at prices double that of just a month earlier (and are less than half of what we’re paying now).  Turns out there really wasn’t a shortage of supply at all, just a brilliantly rendered perception of one, with the result being no different than had it been real.  That perception exists today, with no real relationship to actual supply, other than the implication that if you don’t like it, process your own oil and charge what you want.

            Other contrivances are less sinister and simply accepted as smart marketing.  For example, limited edition prints of paintings and copies of sculptures hold their value because the supply is finite.  The artist could have elected to duplicate 2000 pieces instead of 500, but with their accountant nearby, the decision is made purely and overtly to optimize the economics.  The same holds for private label liquors and so-called signature editions of everything from perfume to cars – there are only so many to be had, and the price reflects this exclusivity.  Thus, demand soars.

            Of course, when the expansion of supply is ridiculously easy (at least in theory), as it is for products such as computer software, DVDs and CDs, a whole new level of sophistication kicks into gear to keep supply in check.  While technology has been developed to hamper the efforts of layman duplicators with a laptop, it’s still easy to copy a disk if you know what you’re doing.  In this case it’s the law that puts a ceiling on demand, with licenses and penalties playing a role in managing.

            The Supply-Control Technique applies with equal validity in the realm of interpersonal relationships (hence, the tried and true hard to get strategy).  On American Idol, with grouchy Simon Cowell spewing insults to everyone from the host to the most hopeful of supplicants, compliments and positive feedback are the currency of success.  When Paula Abdul used to say you’re great, hey, that’s no big deal – she told the valet he looks like Brad Pitt and praised the mailman earlier that day for closing the box when he was done.  But when Simon breaks character and sends a little love your way, now that’s precious.  That’s the feedback you seek.

            Even the courtroom is a laboratory for supply-demand dynamics.  In injury liability cases, a fundamental strategy is to allow the jury only a brief glimpse of the injured plaintiff.  Lawyers pull out the stops to find ways to keep their injured client out of the courtroom.  The more visible the injury, the more valid the strategy.  Why?  Because that one brief glimpse of the maimed or disfigured victim by the jury is the most powerful image of all, and practice has proven that the longer the jury gazes at the poor soul in the wheelchair or the horrific scars, the less emotional they become. They simply become anesthetized to the gut-wrenching wallop those images present and stop responding.  And that, any trial lawyer worth her or his retainer knows, is no good, as emotion is precisely the ticket to the award of a hefty settlement.  The Supply-Control technique dictates that, if, after whetting their appetite, the jury can be deprived of what they naturally want to see, they’ll respond with more emotion and vigor to the brief glimpses of suffering they were able to catch.

            And then, of course, no discussion of supply and demand is complete without mentioning the pricing of seats on airplanes.  When you book in advance the fare is lower, simply because there are so many seats available.  But the closer you get to the date of travel the more expensive the seats become – same airplane, same seat –for the obvious reason that there are only so many seats remaining, and they’ll most certainly be gone soon.  The most remarkable thing about this is that the airlines haven’t resorted to auctioning off the last seat on the flight to the highest bidder… but don’t hold your breath, anything is possible in that industry, where logic left the building decades ago.

Applying the Supply-Control Technique 

            Another example – an analogy, really – emerges from the aviation field, and it clarifies the need for entrepreneurs, sales professionals, or anyone else with an agenda, to understand the nature of the law of scarcity and its power over the Supply-Control Technique.  Imagine that you are an airplane designer and manufacturer.  It goes without question that everything that appears on a blueprint or rolls out of your factory has been created in context to the basic laws of aerodynamics.  It would be impossible to create a functional product without first mastering those principles.   And yet, where business is concerned, and where people who are frustrated with their effectiveness as communicators are concerned, too many people seek to gain altitude for ideas and products without the remotest clue (beyond an intuitive awareness born of personal exposure) of the psychological principles that dictate their success.  Less is more.  No matter what the playing field or context, strategies should be developed in light of this truth.

            Sometimes demand manifests relative to the image of a product or person as much as their availability.  People or products that are hard to come by are perceived to be of greater value.  It is paradoxical, perhaps, to note that value is often pegged to price, which means the more expensive a product (think Ferrari) is, the rarer it is, and therefore the more prestigious and valuable.  Hyundai argues that their cars are every bit as technologically amazing as a BMW, but the price says otherwise, and so does the perception, with truth not getting a vote in the matter.  Jude Law appears in more movies than anyone, and many believe he is as fine an actor as, say, Leonardo DiCaprio.  But, despite the absence of any real difference in audience attraction, which actor gets more money per role?  DiCaprio, a Scorsese favorite, picks and chooses his projects carefully and appears on the screen only once every few years, compared to several roles per year for Law or, say, Robert Downey jr.  Exposure is something celebrities must manage as closely as their weight, or it can quickly turn into overexposure and the deterioration of their perceived value, talent not withstanding.  Just ask Madonna, who has virtually disappeared from the media.

            Rather than prescribe a specific strategy for withholding supply and creating the perception of value – something that entire bookstores full of wisdom strives to do – better here to land on the conclusion that one must learn the aerodynamics of supply before seeking to manipulate the flight plan of demand.  Context is key here – one must understand the field of battle (the market), the competition and the levels of supply and demand across the aisle, and adjust accordingly.  But just as it is in the aviation industry – what goes up must come down –an entry-level awareness of basic supply-demand truth can serve even the most modest of campaigns.   

It is simply this: seek to make your product, your idea, or even yourself, more exclusive by managing exposure and availability.  The tools for this include price, proximity and schedule, and the combinations of these and other variables are endless.  Those who enter a market first, or with the most differentiated features and benefits (like the iPod), usually command the greatest value, though always with an eye over their shoulder to respond to duplication by others.  Those who enter a market strategically, however (like the recent flood of new phones that pick up where the iPhone leaves off), are masters of their fate by virtue of controlling how they are perceived though the use of The Supply-Control Technique and enlightened marketing.

            Nothing about human relationships, be it marketing and selling products, applying for a job, swaying an audience or getting a date – or even writing a song – is an exact science.  But at the heart of it all is a very exacting principle of human behavior: we want and value that which is difficult to attain.  Strive for that perception in context to the specifics of you situation and the market in which you operate, and you will find yourself desired in ways you may not have imagined.

© Harrison Monarth 2009