Lesson Sixteen: Scarcity

I had an interesting observation recently . There are two people we are offering similar services. One person charges for the service and the other offers for free. With some variation both offer good service. Very interestingly people are so keen going with person who charges fee. While the reasons can be any thing, subconsciously we under value anything that is “Free”.

We humans place much higher value on the things that are scarce and lower value on the abundant things. Basically any thing that is become available to us easily and abundantly we don’t value much and take it for granted. When suddenly same thing become scarce then we start valuing.

This scarcity psychology concept is fully leveraged in business – in marketing, advertising, sales and negotiations.  Examples of this are – “Out of stock”, “Only 1 item left” and “50% off until this mid night only”

Scarcity psychology acts in all areas of our life. When we are healthy we don’t pay attention to health. One emergency visit to hospital makes health as # 1 priority of life. Then once health stabilizes we push it to back burner. Same thing goes with relationships, career and money. This also the reason why we have less gratitude towards what we already have. We crave for what we do not have – scarcity.

Watch out the areas which you are not currently giving importance…they may become very important soon. Catch them early.