From the Secret World of Auctions…To You

I spent my youth, dressed as a boy and being dragged to hundreds of industrial auction sites because my parents wanted me to learn the lost art of selling from the master persuader auctioneers. They hoped this dragged-in-drag experience would help me blend with the old-school auctioneer men, greasy machines and colorful language. They hoped it would provide me with rare, insiders’ access into a world that few others ever experience. It did.

Recently I was thinking back on a specific and memorable auction lesson I learned when I was about 9 years old.   

This particular auction was underway in a large industrial compound that required the crowd to physically move from one item to the next as each was being sold. After a successful part of the auction dealing with the lower-priced merchandise, the auctioneer needed to move along to sell some large machinery. The crowd was loitering, not moving on to the location of the pricier machines.

The auctioneer, despite this, began the sale of a tractor. I say this was a tractor because all industrial machines that move are tractors to me. The tractor was worth $20,000-30,000, and its sale was to be followed by even larger tractors. The auctioneer began the sale at $10,000 and immediately received an unenthusiastic bid. He shouted, “Sold!”

What an idiot, right? He clearly lost a minimum of $10,000 in his haste to git-r-done. He also pissed off the people who intended to jump in when the sale got closer to the bidding-to-buy range.

The auction-goers were unaware that this well-played strategy sent a message that good deals were to be had, but only for a limited time and only for a limited few. I was probably unaware of this message, too, but when all of us auctioneer ‘men’ gathered for the post-sale dinner at the steakhouse, it was explained in great detail. The auctioneer’s actions tapped deep into the powerfully persuasive territory of scarcity. 

It’s obvious that ebay built its empire on this very strategy because it’s an online auction company. The truth is that even those of us not in the auction business can tap into this very persuasive principle. Perhaps we can identify exclusive, valuable information that is rare and is best acted on quickly before more people learn about it or before the opportunity to act on the exclusive information no longer exists. 

According to Dr. Robert Caldini, the guru of persuasive science, studies demonstrate that exclusive information is viewed as more persuasive and valuable. Perhaps you’re in real estate and you have exclusive information on a cool, new restaurant going into a previously undeveloped empty lot which might make investing in the nearby neighborhood worthy of consideration. That’s the cool thing about real estate–it’s often traded on insider information, and much of that info cannot be found on your client’s favorite real estate porn site. That powerful, exclusive information is all yours for unearthing. Dig away and share judiciously.

Just this month, another online giant, Amazon, tapped into lessons learned in the auction world. Amazon has joined the scarcity bandwagon by offering The Kindle Countdown program. This exclusive program allows Kindle Select books to be offered at significantly reduced prices for a discrete and limited time. Each day of the promotion the price increases until the price returns to it’s full, pre-promotion price. Sly.

Sure we’re excited that we can ask you to mark your calendars for November 15th because Arousing the Buy Curious: Real Estate Pillow Talk for Patrons and Professionals, will be a part of Kindle Countdown. The price will be crazy low (almost free) and will creep up over the three Countdown days. Sort of like an auction.

What will be even more exciting is to see how this scarcity experiment plays out–to find out what this does for the Amazon Kindle Select program in contrast to the traditional few free days offer. These book programs certainly don’t make the author rich, but they do provide valuable insight into persuasion and buying behavior.

Steal a lesson from those dusty industrial auction sites and share how you incorporate this principle of scarcity in your own business. Please tell us in the comments below and be sure to forward this to anyone who may benefit from testing this powerful persuasive principle.