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Using the Principle of Scarcity in Your Marketing

Business Development Comments Off

“Because we know that the things that are difficult to possess are typically better than those that are easy to possess, we can often use an item’s availability to help us quickly and correctly decide on its quality…

[Additionally,] as opportunities become less available, we lose freedoms; and we hate to lose the freedoms we already have… So, when increasing scarcity… interferes with our prior access to some item, we will react against the interference by wanting and trying to possess the item more than before.”

(Robert Cialdini extracted from the book Influence: The Psychology of Persuasion).

According to the Principle of Scarcity, people assign more value to opportunities when they are less available. The use of this principle for profit can be seen in such high-pressure sales techniques as a “limited number” now available; and a “deadline” set for an offer.

Such tactics persuade people that number and/or time restrict access to what is offered. The scarcity principle holds true for two reasons:

  1. Things difficult to attain are typically more valuable. And the availability of an item or experience can serve as a shortcut clue or cue to its quality.
  2. When something becomes less accessible, the freedom to have it may be lost.

According to psychological reactance theory, people respond to the loss of freedom by wanting to have it more. This includes the freedom to have certain goods and services. As a motivator, psychological reactance is present throughout the great majority of a person’s life span.

However, it is especially evident at a pair of ages: “the terrible twos” and the teenage years. Both of these periods are characterized by an emerging sense of individuality, which brings to prominence such issues as control, individual rights, and freedoms. People at these ages are especially sensitive to restrictions.

In addition to its effect on the valuation of commodities, the Principle of Scarcity also applies to the way information is evaluated. Research indicates that the act of limiting access to a message may cause individuals to want it more and to become increasingly favourable to it.

The latter of these findings, that limited information is more persuasive, seems the most interesting. In the case of censorship, this effect occurs even when the message has not been received. When a message has been received, it is more effective if it is perceived to consist of some type of exclusive information.

The scarcity principle is more likely to hold true under two optimizing conditions:

  • Scarce items are heightened in value when they are newly scarce. That is, things have higher value when they have become recently restricted more than those than those things that were restricted all along have.
  • People are most attracted to scarce resources when they compete with others for them.

It is difficult to prepare ourselves cognitively against scarcity pressures because they have an emotional quality that makes thinking difficult.

In defence, we might attempt to be alert regarding the sudden rush of emotions in situations involving scarcity. Perhaps this awareness may allow us to remain calm and take steps to assess the merits of an opportunity in terms of why we really want and objectively need.

How to Apply the Rule of Scarcity   

  1. Make your promotions time limited.
  2. Make it known to potential clients that you have a limit to the number of clients that you can work with at any one time. Perhaps during a certain period of time… like each calendar quarter. So you let them know that you only work with 25 clients a quarter and if they are not within those 25 then they’ll need to go on a waiting list. To make the scarcity rule work for you, you need to have successfully applied most of the other key principles we have already mentioned… particularly ‘Authority’ and ‘Social Proof’.
  3. Limit the number of clients within the coaching groups you have and be sure to set up a waiting list. This is also beneficial for existing clients to be aware of. They will not want to leave something that means they could ‘miss out’.
  4. Respect your own time during sessions with clients. Don’t run overtime, place importance on the time you have, and let your clients understand this. ‘Helen we’ll need to finish up our session now, I have another commitment to keep at 12noon, but we can pick this up at our next session, which will be…’
  5. When you are promoting workshops, events or group session to potential or existing clients be sure to create an offer or call to action and place a time limit on the response date. Be one of the first 15 people to register by the 11th and you’ll receive the complete set of ‘Successful Coaching Case Studies’ valued at $119.95 for FREE. 

Release a limited number of ‘exclusive’ spots in a product, service or event. Create a premium “Platinum” or “Gold” level service that’s ‘invitation’ only.

Source: www.coachingclub.com.au/ucbbp

Effective Communication Within a Team

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Coaching teams within an organisation is one of the most on-demand areas of Coaching. And when it comes to teams, the number one aspect that dictates the results attained by that team is effective communication amongst its members.

In this article, we discuss some elements of effective communication within a team environment and provide a range of strategies that coaches can successfully apply when working with teams.

What is effective communication?

Effective communication does more than just convey information. In an effective communication transaction a message is conveyed with shared meaning. It may be helpful to reflect on the following key areas to assist you in developing or enhancing your communication with other team members:

The message you think you are sending may not be the same message being received. Within a team environment, members still bring their own experiences, beliefs and interpretations. When communicating a message, expect to be misinterpreted and make adjustments to your message to account for potential areas of misunderstanding.

Seek feedback. As misinterpretations are common in communication, it is often advisable that you continually seek feedback to ensure that your messages have been received accurately.

Make it your priority to express rather than impress. The aim of communication is to express an opinion, idea or to transfer knowledge.  It is important to remember that your primary aim is to get your message across, try not to obstruct it by being focused on sounding impressive or knowledgeable.

Choose the right medium. Effective communication means choosing the appropriate medium for your message. Some information is best conveyed in a team meeting, whilst other information may be received more appropriately in an email or memo, other information should be communicated face to face. Select the medium to suit the message and the person you are communicating with.

Be conscious of your non-verbal communication. Be conscious of what you are conveying non-verbally. Avoid diluting the impact of your message with mismatched or incongruent body language. Where possible, adjust your body language to align with your message.

Why is communication important for a team to be effective?

Team communication processes that function effectively can increase team motivation, foster trust and respect between members, greatly improve decision making processes and contribute substantially to the overall productivity and performance of the team.

Yet, communication processes that are ineffective can decrease member motivation, lessen team commitment, increase team gossip and lower productivity. Effective communication processes, therefore are vital to team performance.

What makes a communication process effective?

Effective communication processes are:

Regular. Regular communication within, and between teams helps members to maintain focus, allows all members to keep up to date with team progress and ensures that difficulties or setbacks can be dealt with promptly and collaboratively.

Transparent. Transparent communication processes provide all team members with the same information where possible and keep all members adequately informed.

Transparent processes maximise the likelihood that team members will be aligned in their concept of where they are going and how they are going to get there. Failing to adequately inform all team members, equally, may greatly compromise their ability to contribute equally to team processes and decision making.

Focused and related to team goals. Communication processes that are focused and related to team goals encourage team members to similarly remain goal focused and outcome directed.

Modes of communication

Within the work environment, communication can occur through a variety of modes depending on personal preference. Some of the more popular modes for team communication are:

  1. Team meetings
  2. Newsletters
  3. Email updates

When using these modes it is important to remain mindful of the 3 characteristics that make communication processes effective (i.e. should be regular, transparent and goal focused).

1. Team meetings
One of the primary forums for team communication is the team meeting. When conducted with structure and purpose, regular team meetings can be an effective and productive means of team communication.

However, team meetings can evolve into a drawn-out procedure that fritters away valuable time and results in decreasing motivation, frustration and productivity. To conduct an effective team meeting the following principles should be considered:

What is the purpose of the meeting? Prior to the commencement of the meeting, all team members should be aware of the meeting’s purpose. Set an agenda and stick to it. The meeting should remain focused on team goals and objectives. It may be necessary to note down some of the areas of discussion that arise as side issues or tangents to the purpose at hand. These issues may need to be addressed in a later forum.

Are members aware of what they may be asked to contribute to the meeting? It is helpful for team members to have a clear idea of the kind of information they may be asked to contribute. Contributing facts, knowledge or recommendations may require different preparation than contributing opinions or brainstorming.

Team members, who are provided with an idea of what they may be asked to contribute, are thus provided with an opportunity to prepare accordingly. If you put team members on the spot – it can decrease their commitment.

Has a meeting agenda been distributed to all members prior to the meeting? In addition to understanding the purpose of the meeting and their likely contribution, team members should all be furnished with an agenda prior to commencement of the meeting. A meeting agenda will state the purpose and focus of the meeting as well as outline the proposed topics and areas for discussion.

Has a time-frame been established prior to the commencement of the meeting? Team meetings should commence and finish on time. When members are aware of a finishing time from the outset they are better equipped to budget time accordingly.

Finish the meeting on a note of accomplishment. The completion of a meeting should be a reflection of what has been accomplished within the meeting’s time-frame. The original goal or objective should be revisited and comment should be made on its achievement (whether the achievement was partial or full).

2. Newsletters
Newsletters can be a creative and effective method of regularly conveying information to fellow team members. Newsletters may also serve as a useful mode for distributing information from your team to other teams.

Constructing an effective newsletter
In the process of constructing an effective team newsletter, consider the following points. Decide on the basics early on:

  • What is the purpose of the newsletter?
  • Who are its intended audience?
  • How frequently will it be circulated?
  • How will it be circulated?

Clear concise information. Effective newsletters are concise and easily understood. They should provide relevant information that is both up to date and useful.

Informal and humorous. Newsletters do not necessarily need to be formal documents. A light, humorous tone may encourage regular readers and consequently increase the newsletter’s effectiveness.

It may be helpful to remember that newsletters are an ideal tool for highlighting team achievements and recognising individual accomplishments.

3. Email updates
Email has fast become the one of the most widely used mediums for business communication. Mastering email correspondence is one of the simplest and most effective ways of ensuring that your messages are not only read but followed up accordingly.

Inboxes are often overloaded with numerous messages of varying importance. If you are sending emails as a means of communicating with your fellow team members you will want to ensure that your message gets read and is clearly understood.

Constructing an effective email
To construct an effective email it may be helpful to remember the following key points

Make use of the subject line. The subject line provides an opportunity to inform the receiver of the purpose of the email. A subject line ideally should describe exactly what the email is about. An appropriate subject line will maximise the possibility of your message being read.

Use concise language. Like any written business correspondence it’s important to keep business emails concise and to the point. Often the viewing area for emails is limited, so if possible limit messages to a few short paragraphs. Everyone is busy – don’t waste their time – be clear and concise.

Make any required follow up clear. If your email is a request for action or follow up from a team member make this clear in your message. Remember to include any contact details (such as phone or fax numbers and addresses for snail mail) that the receiver may require.

Respond to emails in a timely manner. Prompt responses to emails not only promotes efficiency but often encourages team members to respond in a similar timely manner.

Strategies to Close Sales

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Whilst the ideal scenario is to set up logical buying criteria that naturally progresses to a sale, it rarely happens this way. And this is where most coaches fail in the sales process. They fear closing the sale.

Of course, this fear is counter-intuitive. The real fear is that of being rejected. Yet, if you don’t close the sale it’s the same result as being rejected. Hence, logically, the only way to overcome the fear of rejection is to attempt to close the sale.

The ‘handling objections’ approach is an effective close. But it can be complicated if your prospect ‘just doesn’t feel it is right for them’. Usually in these scenarios you’ve failed to build enough credibility and rapport. This means you have to return to the part of your sales process where you qualify your prospects.

Handling objections. A good selling process pre-empts objections and overcomes them before they become a barrier. But it’s also important to remember that an objection is also your opportunity to close.

For example, let’s assume you’ve been through all the previous steps and your prospect gives you the objection: “I like the sound of your service, but I can’t afford it right now”.

Firstly, you should always agree with an objection. To the prospect it’s real, so you should validate it. This also assists maintain rapport.

So you could respond: “Well, that’s certainly a good reason not to invest in the service today. [Pause]. But let me ask you this: Is money the only thing stopping you from beginning the service?”

If there are no further objections your prospect will say something like: “No, if I could afford it, I’d buy it”.

This is called isolating the objection. Now that your prospect has identified and isolated their only objection, you simply find a way to move past it. “So if I could find a way for you to afford it you’d start immediately”.

Then you just emphasise your guarantee, design an instalment plan, lock them into a lower investment solution, etc.

Another powerful technique to close is to assume the sale. As this technique suggests, you simply close the sale by assuming your prospect wants your service.

You do this by saying things such as “So what’s the best time and day of the week for you? I have Wednesdays 6pm to 7pm free. Does that suit you?”

Other strategies for closing include:

Risk Reversal. Using risk reversal you reverse your prospects perceived risk on to you. This is most commonly done by way of a guarantee.

Scarcity. Scarcity is a powerful device for closing. People strongly desire what they can’t have or what’s perceived to be scarce. Common scarcity devices include time constraints and number restraint. For instance, rather than saying “I’m pretty well available any time, just let me know when suits you”.

Try…”I only have 1 spot remaining in my calendar and I have another 3 meetings this afternoon. If you don’t lock it in now, chances are you’ll miss out for around 3-months”.

Sell, Then Sell Again

Business Development Comments Off

Did you know if you contact 100% of your clients within 3 to 10 days after they purchase, 15% to 40% will re-purchase again? And in the majority of cases, they’ll even buy services and products above their initial purchase price.

Think about the ramifications this simple strategy can have on your business.

Suppose you acquire just one new client per week on a 3-month coaching contract valued at $3,000. This is where most coaches stop their marketing. They consider their marketing process fulfilled at this time.

But consider you don’t stop here. You know clients that have recently purchased have a greater propensity to re-purchase within a short timeframe. So you offer 100% of your new clients for the month a second upsell service valued at $1,500. 

If just 25% convert, you earn an additional $1,500 or over 10% for very little work. And depending on your cost of the upsell product, it could mean anywhere between 10% to 30% extra on your bottom line net profit. (Remembering that on the upsell product you have little to no acquisition cost).

This is possibly the simplest process for multiplying your profit you’ll find. It’s extremely simple to implement and will have immediate positive affect on your bottom line profit.

Why This Works – Rule of Commitment and Consistency

“We all fool ourselves from time to time in order to keep our thoughts and beliefs consistent with what we have already done or decided. … In most circumstances, consistency is valued and adaptive. …The person whose beliefs, words, and deeds don’t match may be seen as indecisive, confused, two-faced, or even mentally ill. On the other side, a high degree of consistency is normally associated with personal and intellectual strength.” Cialdini.

People have a desire to look consistent through their words, beliefs, attitudes and deeds and this tendency is supported or fed from three sources:

  1. Good personal consistency is highly valued by society.
  2. Consistent conduct provides a beneficial approach to daily life.

A consistent orientation affords a valuable shortcut through the complexity of modern existence. That is, by being consistent with earlier decisions we can reduce the need to process all the relevant information in future similar situations. Instead, one merely needs to recall the earlier decision and respond consistently.

The key to using the principles of Commitment and Consistency to influence people is held within the initial commitment. That is, after making a commitment, taking a stand or position, people are more willing to agree to requests that are consistent with their prior commitment.
 
Many compliance professionals try to induce others to take an initial position that is consistent with a behaviour they will later request.

Commitments are most effective when they are active, public, effortful, and viewed as internally motivated and not coerced. Once a stand is taken, there is a natural tendency to behave in ways that are stubbornly consistent with the stand.
 
The drive to be and look consistent constitutes a highly potent tool of social influence, often causing people to act in ways that are clearly contrary to their own best interests.

Commitment decisions, even erroneous ones, have a tendency to be self-perpetuating. They often “grow their own legs”. That is, those involved may add new reasons and justifications to support the wisdom of commitments they have already made.

As a consequence, some commitments remain in effect long after the conditions that initially spurred them have changed. This phenomenon explains the effectiveness of certain deceptive compliance practices.

What This All Means

What this all means is this… when your new client makes a decision to purchase, to reassure to themselves they’ve made the right choice (balancing risk and reward), at a deep subconscious level they vehemently defend their decision. This defence manifests in various ways including:

  • Within close proximity to time of purchase new clients are much more likely to speak positively of your service to others. [Note: Ask for referrals].
  • They will talk highly of your service generally.
  • They’ll defend their purchase to challengers.

And YES…

  • They’ll even re-purchase to defend their initial purchase decision.

Some Additional Benefits of Contacting Clients Shortly After Purchase

Contacting new clients shortly after purchase gives you the ideal opportunity to resell your service and your business – reassuring the client he or she made a shrewd decision.

By doing that for your client:

  • You reinforce their need for assurance.
  • You partner with them in their quest to reinforce their decision; hence increasing your credibility.
  • You allay any niggling fears they may have (usually instilled by another party).
  • You make the client significantly more receptive to future offers.
  • You can request referrals.
  • You can explain how best to use your service; teaching them how to use the service more often and re-order sooner.

Source: www.coachingclub.com.au/ucbbp

Developing a Balanced Lifestyle

Personal Development, Professional Development Comments Off

A client approaches you with the question below. As the coach, how would you assist this client? Below is a script from Zahava Starak, LCI’s Master Coach. 

What tools and resources should I use to help me become more relaxed and enjoy my life more?

The first word that comes into my mind when I read this question is the word “balanced”. By maintaining a balanced life-style; introducing relaxation strategies and avoiding unhealthy coping mechanisms we can be assured of optimising our ability to cope with the demands of our modern life-style and finding the enjoyment we so desperately want.

Clients who ask this question are usually on that ‘notorious’ treadmill and see the life they want passing them by but don’t know how to stop the machine and go for it!

They are no longer controlling their lives (although they may think so) and are so stressed that they do not know how to relax and enjoy anymore.

Case Study: Joe Charles

A case in point is that of Joe Charles. Joe is a 35 year old married man with 2 boys five and seven years of age. He is a highly sought-after electrician.  His success is largely due to the high standards that he sets for himself and he himself states that “he feels that he is driven by the need to make sure everything is perfect” so that “everyone will praise him for his work”.

Joe owns up that he occasionally subjects his wife and two sons to his perfectionist needs. Besides working he in the past has enjoyed making model planes but has found lately that he has not got the patience for this anymore. Besides that he claims that he has no time for fun as he needs to earn a living to support his family.

Joe’s life is comprised of a 50-hour work week, evenings dedicated to paper work and weekends to chauffeuring his children and visiting various family members. Joe admits that with his wife working part time there is not that much pressure on him to work as hard -but he does not know how to stop. He feels stressed!

Joe has sought coaching as he wants to be more relaxed and start enjoying his life. In this case as Joe’s coach I could venture down any number of paths to help Joe in his quest. I could start by asking Joe what he has done in the past to help him relax and enjoy himself and determine what is stopping him from doing this.

Joe has already told me a little about what he likes to do and about his attitude so I could continue along this line. Or  I could tackle the problem by determining what Joe’s values are and help him see that part of his inability to relax and enjoy is due to an imbalance in the life he is living and the values he holds. I could have Joe then look at creating a vision for the future in which he can live by his values and sets goals to attain his more enjoyable life.

What I would like to do is have at my ready the above strategies but would also like to introduce Joe to the concepts of stress and the need of a balanced life in order to be able to relax and enjoy. My plan is quite simple: If Joe is to have a balanced life we need to see how unbalanced his present life is. Secondly we need to determine what this balanced life will look like and then we can introduce the tools required to achieve this balance.

Click here for more information on stress, stress prevention techniques and exercises…

In this process Joe will hopefully begin to realise that the greatest resource he has to reach his objective is himself and all that he really needs are a few strategies and tools.

Where do I start? In this case I might employ the “wheel of life exercise” to help Joe get a clear picture of the present state of ‘balance’ in his life.

In this exercise Joe is presented with a huge circle representing the wheel of life. The wheel is divided into eight sections each depicting an aspect of life.

They are:

  • physical environment;
  • career;
  • money;
  • health;
  • friends and family; 
  • significant other/romance;
  • personal growth;
  • fun and recreation. 

Joe is asked to regard the centre of the wheel as zero and the outer end of each spoke as 10. He is then to put a cross on each spoke to represent a mark out of 10 for how satisfied he is with each aspect of his life (0=not satisfied at all and 10= completely satisfied).

Joe is then asked to join the crosses he marked with a curved or straight line. The new perimeter of the circle represents Joe’s Wheel of Life. With the wheel complete, the question is: How bumpy would Joe’s ride be if this were a real wheel?

We can probably answer – very bumpy – but at least Joe now has a visual picture of his life and can take some steps to smooth out the wheel.

It becomes clear to Joe while viewing his wheel that the balance is most missing in the areas of: fun and recreation; health; friends and family, significant others and to a lesser extent in the other aspects.

And it is now possible to take concrete steps to rectify this and determine what for Joe is a balanced life in which stress is controlled and he can relax and enjoy. To begin with we might set specific goals for each section.

We could also introduce another approach. For each aspect of Joe’s life that is out of balance we can determine what specific changes he can make. For Joe a time map is a perfect start as he can look at his daily and weekly routine, he can prioritise his time and set enough time for the activities that support the goals in each segment of his life.
 
This also prevents activities from spilling over into others and ruining Joe’s ability to concentrate and enjoy the moment he is in.

With goals and time map Joe can determine what he needs to change in each aspect of his life to reach the desired balance. For example, Joe has decided to add more hours to fun and recreation and reduce work hours- or more specifically make his work hours more efficient.

To this end he is learning how to delegate jobs – he is allowing his staff to undertake jobs requiring less expertise thereby freeing himself to do the more challenging jobs and the ones that do require a more perfectionist attitude. As well with the hours gained Joe is setting aside one evening a week to attend a modelling class he has always wanted to attend.

He can now do his paper work during the day and has more evening time for himself and his family. Changes in each aspect of Joe’s life will allow more time for relaxation and fun.

In addition, Joe is beginning to realise that in order to take control of his life and reduce stress he needs to work on his attitude and his belief system in which every thing has to be perfect and there is no room for failure. As long as he holds this view Joe will not be able to relax and let go enough to enjoy himself.

As Joe’s coach I can challenge Joe’s cognitive distortions and work with him to change self-defeating thoughts into more constructive ones. Joe can explore his self talk and learn how to move from negative talk to more positive. This change in attitude will not only relieve Joe of the pressures he puts on himself at work it will allow him to relax more with his two boys and enjoy his family time.

To complete this program we introduce stress management techniques that Joe will readily do. There is no point adding stress.  Joe is clear in that meditation and yoga are not for him. He however sees the merit in learning some relaxation strategies particularly ones he can do when he feels he is becoming stressed.

He is therefore taught two stress exercises. Although Joe is physically active he does sit a lot while doing paper work which he finds stressful. Joe is therefore taught two relaxation exercises to use at work and elsewhere – deep breathing and stretching exercises.

The breathing will allow Joe to put aside conscious stress and focus on relaxation- visualisation exercises can be added to this. The stretching coupled with progressive muscle relaxation will help alleviate the physical effects of stress.

Once Joe begins to see the merits of these exercises he will be encouraged to add them onto his time map as a daily activity to prevent stress