Latest / Sales Leadership with Fexingo: Quota Carriers, Sales Managers, and Revenue Teams / How Top Reps Use the Scarcity Principle Without Feeling Sleazy
Transcript
- Lucas: So there's this moment in almost every sales cycle where you feel the deal slipping. The prospect is interested, they've seen the demo, but they're just... sitting on it. And the instinct — especially for newer reps — is to create urgency. 'Price goes up next month.' 'We only have two slots left.' 'This discount expires Friday.' Luna: Right, the classic scarcity play. And honestly, it can work — but it also feels kind of gross when you're on the receiving end. Lucas: Exactly. And that's the tension I want to dig into today. Because scarcity is a real psychological principle — Robert Cialdini put it in the original six back in 1984. But the way most sales organisations apply it? It's often just a dressed-up lie. And buyers are getting smarter about spotting it. Luna: Yeah, we've all gotten those emails. 'Last chance! Act now!' And you know it's automated. It erodes trust instead of building it. Lucas: So let's look at what actually works. There was a study published last year in the Journal of Personal Selling & Sales Management — researchers ran a controlled experiment with B2B buyers. They tested two types of scarcity: time-based — 'this proposal is valid until Friday' — and supply-based — 'there are only three implementation slots left this quarter.' Luna: And what did they find? Lucas: Time-based scarcity, when it was real and tied to the buyer's own deadline — like a price lock before their fiscal year-end — improved close rates by 18 percent compared to no scarcity signal. But when the time constraint was arbitrary — 'our sale ends Friday' — it actually reduced trust scores by 9 percent. Luna: So the key is whether the constraint is genuine and relevant to the buyer. Lucas: Right. And supply-based scarcity was even trickier. The same study showed inventory scarcity reduced trust by 12 percent across the board. Buyers interpreted it as a pressure tactic. But there was one exception — capacity-based scarcity, where the constraint is on the seller's ability to deliver, not on the product itself. That one actually moved the needle positively. Luna: Can you give a concrete example of capacity-based scarcity? Lucas: Sure. There's a SaaS company — I won't name them, but they're a mid-market CRM provider — that a few years ago completely stopped using fake deadlines. Instead, they switched to what they call 'capacity-based pricing.' Their top-tier plan includes dedicated onboarding and a named customer success manager. But they only have a certain number of those teams. So they say something like: 'We have two onboarding teams available for new enterprise customers this quarter. Once they're booked, the next available slot is in the following quarter.' Luna: That's honest. The constraint isn't manufactured — it's a real operational limit. Lucas: Exactly. And their conversion rates actually went up. Because prospects respect the transparency. They'd rather hear 'we can only take three more clients at this level this quarter' than 'prices are going up forever.' Luna: It also creates a different kind of urgency — fear of missing out on the service quality, not fear of losing a discount. Lucas: That's the distinction. And before we go deeper, I want to acknowledge something — these conversations on the show take time to research and produce. If you've found the episodes useful in your own work, one way to keep this going is to support the show at buy me a coffee dot com slash fexingo. It's a small gesture that helps us stay ad-free and focused on practical, evidence-based content. Luna: Yeah, it really does make a difference. And we appreciate everyone who's chipped in. Lucas: Alright — back to the research. The study also segmented buyers by experience level. For procurement professionals with more than ten years of experience, any scarcity signal — even genuine ones — reduced trust. They've seen every trick in the book. Luna: So seasoned buyers are essentially immune to scarcity as a persuasion tool? Lucas: Not immune — but they require a different approach. For that group, the only scarcity signal that didn't backfire was when the rep explicitly disclosed the reason behind the constraint. Something like: 'We're only offering this pricing to the first ten customers because our CEO wants to validate the product-market fit before raising prices.' That level of honesty actually increased trust by 6 percent. Luna: So transparency amplifies scarcity when it's genuine. But it's a double-edged sword. Lucas: Exactly. And that leads to a simple rule I've heard from a few top sales leaders: if you wouldn't feel comfortable telling the buyer the actual reason behind the constraint, don't use it. If you can't say 'we have only three slots because our implementation team is at capacity and we refuse to overhire and compromise quality,' then you're probably manufacturing urgency. And it will hurt you. Luna: That's a good litmus test. I think a lot of reps get told by management to 'create urgency' without being given the tools to do it ethically. Lucas: Big problem. And it's not just individual reps — companies institutionalise fake scarcity. 'Limited-time offer.' 'Only X left in stock.' Even when the stock is infinite. And the irony is, buyers know it. A 2024 survey from TrustRadius found that 64 percent of B2B buyers said they had rejected a vendor specifically because of aggressive scarcity tactics. Luna: Wow. So it's not just ineffective — it's actually costing deals. Lucas: Yes. And the damage is long-term. That buyer may never consider that vendor again. So what should a rep do instead? Let's talk about three specific techniques that use scarcity without manipulation. Luna: Let's hear them. Lucas: Number one: time-bound the proposal to the buyer's calendar, not yours. If the prospect has a budget deadline or an implementation window, anchor the offer to that. Say: 'I know your fiscal year ends September 30. If we sign by September 15, we can guarantee installation before year-end. After that, it would slip to January.' That's real scarcity — the constraint is the buyer's own timeline. Luna: That makes sense — it aligns with their internal urgency rather than imposing yours. Lucas: Exactly. Technique two: capacity-based scarcity, like the example I gave. Frame it as a quality constraint. 'We only take on three new enterprise clients per quarter because we assign a dedicated team. Next slot opens in Q2.' That's honest, and it positions you as high-demand. Luna: It also subtly communicates that you're selective — which can increase perceived value. Lucas: Right. And three: social scarcity — but done right. Instead of 'everyone's buying this,' which is just social proof, you use exclusivity. 'We're building a cohort of early adopters who get input on our product roadmap. We're capping the group at 15 companies.' That's scarcity of access, not scarcity of supply. And it works because it's inherently limited. Luna: I like that — it's scarcity that also gives the buyer something valuable: influence. Lucas: Yes. And the common thread across all three is that the constraint is real and explainable. You can point to the reason. That's the difference between a tactic and a manipulation. Luna: So let me push back a little. In practice, a lot of sales organisations operate on quarterly quotas. If a rep is behind in the last week of the quarter, isn't some manufactured urgency justified to hit number? Lucas: I think that's the exact moment when the temptation is strongest — and the damage is most likely. Because if you push a deal into this quarter with fake urgency, that buyer may churn next quarter when they realise they were pressured. I'd rather see a rep lose a deal honestly than win it dishonestly and lose the relationship. Luna: That's a long-term view. Not every sales leader has the luxury of ignoring this quarter's number. Lucas: Fair point. But the research suggests that even in the short term, fake scarcity doesn't help as much as people think. In that same study, the net effect of arbitrary time scarcity on close rates was actually negative when you factor in the deals that fell apart after the buyer discovered the truth. The net gain was zero. Luna: So it's not even effective in the short run. That's a strong argument for dropping it entirely. Lucas: I think so. And the best reps I've seen don't need scarcity at all. They create value so clearly that the buyer feels internal urgency — 'I need this solution because the cost of inaction is higher than the cost of acting.' That's the ultimate scarcity: the scarcity of time itself. Luna: That's a nice way to frame it. Scarcity of the problem, not scarcity of the solution. Lucas: Exactly. So here's my takeaway for anyone listening: before you use any scarcity signal, ask yourself — can I explain the constraint honestly? If the answer is no, find another way to move the deal forward. Your pipeline will thank you, and your buyers will trust you.