Ethical marketing in private practice. Scarcity, should we use it?

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Full show notes for this episode are available at The Business of Psychology

Welcome to today’s episode of the Business of Psychology. Today is a bit of a different episode because I wanted to dive into an ethical issue which I hear talked about in the online marketing space all the time. It’s become fashionable to talk about ethical marketing and having integrity and authenticity in your marketing, but this is something which has concerned us from the minute we set up our businesses; I don’t know any psychologist, therapist or counsellor that wasn’t worried about the ethics of their marketing before they started in private practice. It’s the thing which tends to hold us back, in fact, from actually making any progress in our businesses, because we’re so, so concerned about it. So it’s been interesting to me to watch the rest of the online business space having a bit of an awakening about some of the tactics which are commonly used in digital marketing in particular, and for a lot of my friends who work in other industries to be coming to me and saying, you know, ‘Is this okay?’ ‘What’s the psychology behind this, and should I be using it?’ I’ve been having those conversations a lot over the past year with colleagues in other industries, and I decided that I wanted to hear other people’s opinions, so I took some of these concepts had a look at the behavioural science behind them, the psychology of why they work, and took that to the Psychology Business School membership. Every eight weeks or so we have what I call an ethical marketing clinic, where we talk about one of these concepts in a bit of depth and think about possible use cases, when it could be a good thing, when it could go a bit wrong if psychologists and therapists started using it, and then finally, we examine it against some of our professional bodies standards. I typically use the British Psychological Society ethical framework, because that’s the one that I know the best, but we will, in the future, be looking at some other professional bodies guidance as well.

The first topic that I brought to one of those clinics was scarcity marketing, and that’s because this is something that I see really, really frequently in the digital marketing space and that I know, if you’ve done any business or marketing course outside of Psychology Business School, you’re very likely to be quite strongly encouraged to use. I know, particularly when I did some training in business (this is going back a little while now) but I was actually made to feel quite stupid when I said I’m not sure that I feel comfortable doing this, and was basically told that I didn’t have the instinct for business, that I wasn’t ever going to be successful if I didn’t get my head around using some of these tactics. I stuck to my guns and after one experiment with it which I’m not too proud of, and I think I’ve shared on the podcast before that I did put out an email sequence when I first started promoting my first online course five or six years ago, which used some of these tactics in it, and I’m actually kind of grateful that there weren’t many people on my mailing list and even less of those people opened those emails, because looking back, they do not sit very well with me ethically at all, and that’s probably why they weren’t effective.

I think something that some of the Guru’s out there miss is that if you don’t feel comfortable with something that you’re doing, it’s not going to sound like you, and people buy from you. Particularly if it’s digital marketing they’re buying from their inbox, they’re buying from the human being that normally sends them emails that they like, and if they like your emails, that’s probably because you’re your warm, compassionate self in them, and it’s not very compassionate to use some of these tactics in a cynical sales driven way. So if you did try and use them, it’s very likely they wouldn’t work for you anyway, because the things that are effective for us in our marketing are usually the things that reflect our personalities most closely. So for example, if you love speaking to people in your voice, your podcast is probably going to do quite well, if you hate it, your podcast is going to suck. Similarly, if you like getting on video, then your videos are going to be really compelling, and we’ve had two people on this podcast that make amazing videos. We’ve had Dr. Clare, who you can listen to, who’s got an amazing YouTube channel, and we’ve also had Alison Puryear, who makes really engaging videos for her audience in the States. They’re both people who do really well on video, and it comes across that that is something they’re really comfortable with and that’s why that does well for them. If you bend yourself out of shape and start doing something which feels bad, then your audience can tell, and it starts to feel bad for them as well. So just to reassure you, I have tested this, and if you do something that doesn’t feel ethical to you, it won’t even work. So those gurus that tell you that you’re holding on to your ethics too closely, or you’re being too protective, or not cutthroat enough in your business, they are wrong, because if you try to be that person, it’s going to seem fake and false and disingenuous, and people hate that. So don’t stress yourself out about it. It’s all about finding a way of using some of these principles that does feel okay for you, and more importantly, perhaps, is a good fit for where your ideal clients are at.

I hope I’ve given you a bit of background into why I’m talking about some of these marketing principles on the podcast, and today, our focus is on scarcity. So do let me know if this is something that interests you. If it is, then I’ll do more. If it’s not, then we won’t. As ever, this is your podcast, so give me your feedback. And I will respond to it and create more of what you like, and less of what you don’t like.

Scarcity Marketing

First, we’re going to talk about what it is and the possible uses that we could have for it within our businesses, and then we’re going to think a bit more about whether we should use it and the possible pitfalls that could be associated with using it.

What is scarcity marketing?

Some of you will probably have heard of scarcity marketing before. Like I said, there’s a bit of a fashion for talking about these things, and that doesn’t mean that people are always considering them in the depth that we need to consider them. So, in essence, scarcity marketing is about making people believe that the thing they want is scarce, or that it’s in limited supply. So this happens naturally for some things. So think about it, the value of oil is dependent on how much oil there is available; we’re all seeing that at the moment, aren’t we? Diamonds are only expensive because they’re difficult to come by, because there’s not that many of them. If we could find diamonds on our driveways, they probably wouldn’t be worth very much money. Or a limited edition watch; some watches are only valuable because there aren’t very many of them. That sort of blows my mind, it’s not an industry that I understand, but we all know it’s true, right? So the same item is seen as worth more if it’s scarce or in limited supply, and it’s an instinct that we all have that makes us want to stock up now, get it before it’s gone, and that’s known as a scarcity mindset. You might hear people talking about that, because it shows up problematically in lots of areas of life, but essentially, it is just this belief that we have that there isn’t enough of the stuff that we need and so we need to stock up quickly before it all runs out. Scarcity can actually create community around it: you might see a lot of people getting really excited about a group coaching programme, for example, that you look at the price ticket and you think, oh my God, who can afford that? It might be a £50,000 coaching programme, but they have a Facebook group of tens of thousands of people all going on about how amazing this Guru is, having never met them or worked with them before, but they’re just massive, massive superfans, and that’s because time with that coach is seen as really scarce. So there’s this sense that it must be really valuable because lots of people are interested in it, but not very many people can actually work with them. It’s the same when you think about celebrities; access to a celebrity is really scarce, not many people get to sit down and do an interview with Lady Gaga, for example, so people will get really, really excited at the idea that they might get a chance to be one of the few. So scarcity can really have a very strong kind of snowball effect and pull lots of people in.

One example of this working in real life is the limited edition. If you think about are a Harry Potter first edition, the only difference between a first edition Harry Potter and a Harry Potter which you could pick up in WH Smith, is that the first edition is scarce, there’s only a few of them out there in the world, whereas the one sitting on the shelf and WH Smith is available to anybody. But the difference in price is astronomical, so that’s a good example of scarcity working in practice. Another example of scarcity working in practice is the exclusive. We love to feel special, knowing that somebody or service has limited capacity makes us believe that they must be very, very valuable. So again, think about the value of a coach; a coach who charges £10,000 for three months of coaching, and they only take on two people at a time, kind of makes you think that they must be worth that money, and it’s the same for us in our practices. If we’re honest with our clients, and explain that we only take on, you know, six people at a time, they’re more likely to want to be one of those six people. And it happens to me all the time, like I’m sure I love my hairdresser more because he’s always booked up six months in advance, and I rave about him and I tell all my friends about how good he is, and I’m sure scarcity plays a big part in that.

Another common use for scarcity is the last chance. So when I say something like last chance to buy, you probably think of that rack at the back of a clothes shop, and the intention of that rack is to make you think, oh, it’s going to be gone soon so I better buy it now. In my experience, it doesn’t always work. Sometimes it fails because they make the product look unappealing on that rack and there’s other psychological principles at play there. But the last chance concept is applied really successfully in digital marketing. How many times have you received an email, for example, telling you that it’s your last chance to sign up to an online programme? That works because your brain starts to think, oh I better get in there now, I better stock up before this resource goes away forever. So it’s a very powerful tactic, and it works very well in digital marketing.

So those are some common uses that you might have seen for scarcity marketing in different industries.

How scarcity could help us in our businesses

Now let’s have a think about how scarcity can possibly help us in our businesses and could be useful for us. So thinking about a therapy practice, and that side of the work we’re doing, understanding scarcity can actually help us increase our perceived value with our existing clients. If they perceive us as scarce and therefore valuable, they’re more likely to get the best results from working with us, as they’re more likely to commit to our work with them. So doing things like holding your boundaries, so not creating extra time for a client if you don’t have it in your normal working hours, and being honest about your capacity. So letting them know, actually, I only take on six people at a time and this slot is really valuable, I’ve got a waiting list (if that’s true) that can really increase our perceived value to our clients and it makes them more likely to want to show up to their sessions and to feel like they’re doing something valuable by coming to see us. And I really experienced that phenomenon firsthand, because when I started holding my boundaries more firmly, and just being more honest about where my capacity was at and not making exceptions and you know, fitting people in, in what would have been my lunch break, for example, I found my DNA rates pretty much dropped to zero. People will only cancel their appointments with me if something really severe has come up for them. It’s very, very unusual now that I get a flaky client who just kind of doesn’t show up and then expects me to fit them in when it suits them a bit better the following week, that doesn’t happen very often at all. I also found that people were much more likely to start completing their between session work, or if they don’t do it then having a really interesting discussion with me about why not, rather than it just being, oh I didn’t make time for it this week. So those are two really noticeable differences in my relationship with my existing clients that I noticed. I also found that when I started to be a bit more honest about my capacity, a bit more transparent about that, and much more kind of boundaried around my fees. So I wouldn’t reduce fees for anybody anymore, and like I said, exactly the same as for my existing clients, I wouldn’t fit people in for free consultations, I wouldn’t fit people in for their first appointments if I didn’t have space in my normal clinic slots either, I held on to those boundaries really rigidly. I noticed that suddenly, I was really fully booked and in a lot more demand. So it was a really unexpected effect for me, but it works from a marketing perspective and it also worked really well for helping my clients to get the best experience out of my practice. So those are some ways that I accidentally used scarcity. At that time, I hadn’t really researched into the behavioural science aspect of it, it really wasn’t something that I was doing consciously, it was much more that I was about to burn out and crumble, and I knew that setting firmer boundaries and upping my fees and holding them would actually help me in my business in other ways, but what I found was a very, very powerful marketing effect that basically my revenue went up quite significantly. So I then tried to look at why did that happen and how can I make sense of that as a psychologist? There are a few effects involved, and we might talk about some of those on later episodes, but the scarcity effect is probably the most powerful one there. Suddenly, people were seeing me as a limited resource, and therefore a more valuable one. So if you’re ever worried about holding boundaries with a client, I encourage you to think about that, and think about the fact that if you are not perceived as valuable, then that client is not going to get the most out of out of working with you, whereas if they think that every minute of your time is really valuable, they also recognise that every minute of their time that they’re spending with you is valuable, and I think that’s really important and in the interests of both parties.

Other ways we can consider using scarcity

But there are other ways that we can use scarcity, or that we could consider using scarcity in our work. For example, if you have an online course, you could consider only making that course available a few times a year. So it would be common to do that if you’re teaching it live. I’ve also seen it done with pre-recorded courses and we’ll talk more about that in a minute. Another way of using scarcity if you’re doing groups, for example, is limiting the numbers on a group programme; that creates scarcity. Or limiting the numbers on an online course, or peer supervision session, or supervision work if that’s what you’re doing. Another way that you could use scarcity in your work is offering time limited discounts for people, we’ll talk a bit more about how that might work and what could be good or bad about that in a minute, because all of these things raise the question of okay, so this is how it could work, I get that, I get the behavioural science aspect of it. You know, we’re all psychologically minded here. But should we? When should we? When shouldn’t we? And the discussions that we had in Psychology Business School, when we did our ethical marketing clinic on this, were really, really interesting, and I can’t really replicate the richness of that here, because we went through a few examples together and really pulled apart what will be good and bad about using scarcity in each of these examples. So if you’re really interested in that, I really encourage you to come into Psychology Business School, because all of the ethical marketing clinics are recorded and you can go back and have a look at all of that, and we will have more coming up in the future as well. So if this sort of thing fascinates you do come and join us for those because I can’t replicate everything here. But thinking about some of the discussions that we had, and the principles that came out of it, I thought would be really useful for this podcast.

I gave people some examples of different uses for scarcity outside of the therapy room. So looking at things like online courses and emailing people about digital products. In one of the examples, somebody was running a course live and they felt that they could only deliver the course well to six people because it was to a clinical group, people who were still struggling with anxiety, and they knew from experience that the relationships between members of the group, even though it wasn’t like a group therapy programme but it was an online course where they would be bringing their own examples, are going to be really important, she was going to need to be very involved with managing that. So she didn’t feel she could hold that space for more than six people, so she put a limit on the number of people that could join, and there was also a natural time limit because the course was running live. So there were two kind of instances of natural scarcity, and in her email marketing, she let people know about those deadlines and she used countdown timers to demonstrate those deadlines and make them more obvious to people so that they wouldn’t miss them. Then when people contacted her after missing the deadline and said, can I still get in? She had to hold that boundary and say no. So that’s another example of scarcity coming into play in quite a natural context. And as a group, we kind of thought that would be okay because it’s honest, the deadlines were real, the limited numbers were real, and she stuck to them, she didn’t flex those just because she could see that she could make a bit more money if she did, and that tells you that they were honest. I think sometimes, some people in other industries that I’ve worked with have intended to make an honest boundary, they’d intended to only take six people, say on a coaching programme, but then when eight people wanted to come on, they flexed that boundary because they wanted the extra income. And that tells you that actually, they hadn’t thought it all the way through and it wasn’t an honest boundary. And that links to the second point, the second reason that we thought that those decisions were okay in that example, was because they were in the best interests of both parties. So she wanted six people on that programme because she could only deliver it well for six people, so it protected her from stretching herself too thin, and it protected them, it made sure that they got a good experience. And it’s the same with the time limit. That programme wouldn’t have worked very well if somebody missed the first session, so she didn’t allow that to happen. She held the boundaries firm so that everybody would get every session that they needed in order to get the outcome that they were promised. So again, it’s about those boundaries being honest and there for the right reasons, they’re there for both parties.

Where we thought it wouldn’t be okay were with examples which we’ve probably all had in our inboxes (I certainly get a lot of this in my inbox) where there are deadlines but I’m not really sure why. So sometimes I get, ‘You’ve got to sign up to this online course on Friday, the doors are closing on Friday’ and if it’s on a topic that I’ve been thinking about doing some work in and it looks like a good price, I might do that. And then I get in there and it’s all pre recorded and there’s no reason that the doors had to close when they did, or I can’t work out the reason if there was one. And it seems like actually in that case, you’re just using scarcity to try and force me to make a decision when I might not be ready to yet. And actually, that’s the dark side of it for me, it’s the fact that if you’re not using it for a natural reason, if you’re injecting it to try and force people to buy, what you’re actually doing there is trying to force a cognitive error by manipulating the biases that you know that we have. And while I can understand that that will work for some audiences, and it could be really effective, I think if you’re asking people to part with money, you really want to know that they have made a balanced decision based on an informed choice, that you’re the best provider for them. I don’t think you really want it to be because you panicked them, you activated their fight or flight system and they suddenly couldn’t see any options other than do it now or never do it. So personally, I don’t think there are many client groups where that would be okay. Having said that, I think there’s a sliding scale of not okay. I think I said this when I did the ethical marketing clinic with Psychology Business School, I’m on a lot of lists of kind of marketing training for people who work in marketing, and they use an awful lot of behavioural science tactics including a lot of scarcity, and I don’t really think it’s okay. I don’t really think it’s okay to panic anybody into buying anything, but I don’t get really outraged about it because everybody receiving those emails is a marketer, and so probably has some understanding of the tactics that are being used and can probably make an informed decision to exit that list if they don’t like it, which I do on a regular basis. Whereas I don’t think anybody would do this, I’ve not seen this in practice, but thinking of a worst case scenario, if you took one of the clinical groups we might work with, like for example, Marianne Trent‘s audience. She came on the podcast and talked about an online course that she has offering stabilisation techniques for people who have been through trauma. Now, I’ve got no doubt that Marianne would never introduce stuff like countdown timers and false scarcity to try and force people into making a decision about buying that course, because those people, they’re already potentially triggered and in that kind of fight, flight or freeze state, where they’re already going to be struggling to make decisions. So to push them could be really detrimental not only to their decision making process, they might buy something that they regret, but also to their overall mental health. So while I’m sure examples as extreme as that are not that common, I’m sure they’re happening somewhere that I’m not seeing (thankfully not seeing) but I haven’t heard of lots of examples as extreme as that. It’s a good demonstration of how carefully we need to think about what we’re positioning and who our ideal clients are, and where they are along the spectrum of overwhelm already, because it might be that even natural scarcity, which I would say in itself is perfectly ethical if it’s natural and it’s honest and it’s in everybody’s best interests, I’d say generally that’s quite ethical, but we actually might need to protect some people from it if they’re at the really overwhelmed end of the spectrum. For example, something that used to really wind me up when I worked in the NHS, in one particular service that I was in, is I would sometimes hear the person doing triage offloading about how overcapacity the service was to somebody who basically was being told they were on a four year waiting list. Now that is natural scarcity; it’s true, it’s honest, but I don’t think it’s in the interests of the person on the other end to be made aware of that, I think that can kind of just overwhelm them further, and when you’re in that period where you’re already feeling really overwhelmed and psychologically vulnerable, sometimes when somebody’s offloading their stress onto you, you can feel like you’re almost sponging it up, and I felt like there was a big risk of that being transferred to the client in those situations, and I think we could fall into that in private practice if we’re not careful. So what I would say is, when people are in that overwhelmed state or we think that they might be likely to be, even if it’s natural scarcity, we need to think about how we could dampen that effect perhaps by suggesting alternative routes, maybe sending follow up emails, people that do go past that deadline and say, look, this course isn’t available now because I teach it live and/or to a small number of people, but don’t worry, there’s still ways that you can access help, you can still do this, you can still do that. Just so that people don’t get trapped into this kind of panic ‘Oh, my God, I’ve missed it, or I’m going to miss it, or I can’t access that so I can’t access anything’ because people might be in that mindset in some of the clinical groups that we work with. So it’s worth considering that, and that’s something that came up in our discussion in Psychology Business School that I thought was worth relaying here.

So those are my thoughts around scarcity. Generally, I think it’s something that can be really useful to us with our existing clients, and with the way that we hold our boundaries. Generally, I think it’s ethical in most contexts if it’s honest and it’s in the interests of both parties. Where I think it becomes problematic is if you’re using it as a tactic to try and get people to panic buy, and I think you will see a lot of marketers, they won’t use that language, they’ll say things like ‘pushing people in the right direction’, ‘nudging people to make a buying decision’, but essentially they’re pushing people in to panic and I don’t think that is all right for anyone. But we definitely need to be mindful of how scarcity is showing up in our marketing and in our dealings with potential clients, if they might be in a more vulnerable headspace.

I hope that’s been useful food for thought for you. I bet you’re going to notice scarcity a lot more now in your inbox and in your social media feeds when you’re going about your daily business. Please do let me know what you thought about this episode and what your views are on scarcity. If you’ve got a different take on it, or if you agree with what I’ve been saying here, I really want to know what you think, so do reach out and talk to me. I’m @RosieGilderthorp on Instagram and I’d love to hear your thoughts after listening to this episode. Also, please let me know if you want to hear more of this stuff. If ethical marketing and these kinds of marketing practices are something that are on your mind and you want to dive a bit more into, I’d love to know, because I could talk about this stuff all day; it really fascinates me. But I don’t know if that’s the same for everybody, so please let me know so I can decide whether to put more of this stuff into the podcast, or whether you’d prefer to hear more about something else. As ever, this is a conversation and I’d love to hear from you. Thank you very much for listening, and I’ll catch you next week on the Business of Psychology.

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