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

The Business of Psychology

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

Links for this episode:

Instagram: @rosiegilderthorp

The Business of Psychology: Episode 59: Using Youtube to reach more people with Dr Clare Roberts

The Business of Psychology: Episode 45: How to make social media videos that people want to watch with Allison Puryear

The Business of Psychology: Episode 68: How to launch an online course as a psychologist with Dr Marianne Trent

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