MedTech + Mindset Newsletter #006

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This week we talk about XYZ, Scarcity and You Can't Be Both.

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1. XYZ it

Insight from Matt Tucker

I've been experimenting with and recommending XYZ statements a lot lately.

One was to one of our new M+M community members interested in how to describe the value they can bring.

One was to Kevin Kermes about describing another community.

Another was to a regulatory consultant frustrated with poor messaging from some Pharma marketers.

XYZs are great to validate you are crystal clear in describing your product, your audience, and the outcome you deliver.

Try it out...It works like this...

What product does, who it does it for, and then what value/outcome it delivers.

A couple examples...

***I identify and unlock growth opportunities [what I do] for early medtech companies [audience] so they can help patients and generate consistent sales [outcome].

***Medtech+Mindset delivers educational and inspirational content and potential partner opportunities [what M+M does] so that Medtech commercial professionals [audience] can grow their careers and their business revenues and achieve their goals [outcome].

2. The Secret Sauce of Scarcity

Insight from Natanya Wachtel-Jones

Do we unconsciously want something more just because it is in short supply?

 In a word – YES!

 In 1975, social psychologist Steven Warshel conducted an experiment. He asked participants to taste and rate a chocolate chip cookie that was given to them from a jar.

 One jar contained ten cookies, and a second jar had just two. The cookies in both jars were exactly the same.

 Results:  the cookies from the jar with fewer cookies received the highest ratings.  The highest taste ratings went to those from the jar with fewer cookies.

 What did this reveal about human nature? It showed that we unconsciously base part of our judgment on availability. Items that are rarer are perceived as more valuable compared to easily accessed ones. This psychological phenomenon is called the scarcity principle.

 The principle is not only limited to items. We also use it when assessing opportunities, content and more. When it comes to less available items, there are specific factors that lead to the perception of worth.

 The most important reason: usually items that are less available are of better quality.

 We use this rule when evaluating an item. 

 Additionally, for the item to be desirable, the loss of availability must be a result of high social demand for the item. Items that are ‘rare’ only because a few are produced won't invoke the scarcity principle.

 When we see that there is a limited quantity of an item because of its popularity we view it as a limited resource. We are scared that someone might get it before we do, and this activates our competitive instincts.

 Have you ever second-guessed a purchase for a long time but pulled the trigger when you felt like it might get sold out?

 When someone is indecisive about an item or service, instinct usually motivates and forces action to complete the purchase.  When an item becomes less available, we feel like we lose our freedom to buy it whenever we want.

 Since the market decides if we will have the opportunity to get it, we experience a loss of control, which our instinct tells us to get rid of.

 We want to protect our freedom of accessing the item. Simultaneously, it makes us desire the item (that we risk losing more than before). The scarcity principle can be quite powerful for generating sales. There are multiple ways to leverage it. The most popular one is by showing customers how many items are still available for purchase or limiting the availability artificially. This method makes the item appear scarce and more desired by others.

 To reinforce this effect, you could also state that there is only one opportunity available or that there are limits to it’s availability based on other demands (from competitors). Apart from this, you can display the competitive set, to create a sense of urgency to your customers.

 But you can also do this another way. You can instill a sense of scarcity by setting deadlines. Consider setting a time of the availability of your item or service.

 How do you do this?

 You could, for example, offer a special price or accelerated deliverable on some item or service for a limited time window. The most powerful method is a combination between the two. More customers will be inclined to convert to purchase when the quantity is limited or specialized, and the time they must buy it is shrinking. You could also increase the desirability by making it exclusive--allowing only some customers to access it.

 Don’t think this works in healthcare?  Sure it does.  During contract negotiations with hospitals or distributors who stock your product, offer a one time, time sensitive discount.  During a launch, keep clinicians abreast of adoption in other territories and remind them that your current launch build may be less than the adoption trends.

 TL;DR 

• According to the scarcity principle, we tend to consider things that are harder to obtain as more worthy.
• To determine the value of an item, we base our judgment on whether there is a demand for it.
• We get competitive when our resources become limited and at the same time, we dislike losing the freedom to get the item.
• All these factors make the item more desirable. Show your customers that the amount of access to your service is declining by limiting the time of availability and by creating exclusive items and services. 

3. You Can't Be Both

Insight from Kevin Kermes

 click here (or on the image above) to watch

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 — Your Friends at the M+M Team.

 
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