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Speaker 3: I have a two part question. But the first part
Speaker 3: is can you really describe that? Because everybody knows the
Speaker 3: scarcy model. You just you put less product out right,
Speaker 3: drive up to demand. But I think there's some more,
Speaker 3: there's other elements that actually make that. It's not like
Speaker 3: you can just make ten water bottles and say I
Speaker 3: only have ten water bottle, I'm a charge one hundred
Speaker 3: dollars for them, right, Like, from your understanding and working
Speaker 3: inside of it, what made the scarcity model work when
Speaker 3: you guys were doing.
Speaker 4: It, Yeah, it was specifically when Nintendo, or just in general.
Speaker 3: Just in general, but Inintendo, let's talk about that since
Speaker 3: you were in it.
Speaker 4: Yeah, so we were in experiential marketing. We travel from
Speaker 4: city to city putting up like these literally bringing the
Speaker 4: video game to life, like that was my job, right,
Speaker 4: and we were doing that, but the supply in the store,
Speaker 4: the product wasn't available. So like the hype gets built
Speaker 4: up of like where can I find this thing? The
Speaker 4: value gets built up of, like where I will pay
Speaker 4: above what it's asking for to get this thing because
Speaker 4: I've experienced it.
Speaker 1: And so so you.
Speaker 3: Were promoting a product with no product available. Correct, The
Speaker 3: promotion was done with no even release date.
Speaker 4: No, the product was out, you just couldn't find it.
Speaker 4: But we like our teams, and this was one of
Speaker 4: many teams all across the United States. We were out
Speaker 4: every single day literally creating the portions of the video
Speaker 4: game that you could walk into. That is very commonly
Speaker 4: known now, ten fifteen years ago, it was unheard of.
Speaker 4: This is also like social media was just becoming like
Speaker 4: a business utility, but it was like, how do I
Speaker 4: create my product and turn it into an experience? If
Speaker 4: people have an immersive experience as opposed to just being
Speaker 4: in the isle of best buy and trying the product.
Speaker 4: It's a completely different compelling moment that also makes you
Speaker 4: have a buying decision more expensive than you would usually have.
Speaker 4: Right games were like maybe forty to fifty dollars. At
Speaker 4: the time that we fit board, I believe it was
Speaker 4: about three hundred dollars, So it was a different gap
Speaker 4: in the buying decision. What I'm telling you now is
Speaker 4: I didn't realize what was happening until I read the
Speaker 4: book The Psychology of Influence. And so we were traveling
Speaker 4: all across the country setting up these activations, and no
Speaker 4: one could buy it in this door. And so by
Speaker 4: the time Christmas comes around, it's like, hey, hey, fever, like,
Speaker 4: everyone's trying to find this product no matter where, they'll
Speaker 4: find it, and they'll ever they'll pay triple and double
Speaker 4: for the product. We see the same thing happening in
Speaker 4: the sneaker industry, right like, people will pay way above
Speaker 4: the fifty or one hundred dollars because they cannot find
Speaker 4: it anywhere else. And so what I learned in the
Speaker 4: Psychology of Influence is the first time that they saw
Speaker 4: that happen was with the Elmo doll. Elmo took on
Speaker 4: me Elmo, and they the marketing industry and product industries
Speaker 4: were kind of conspiring to do this because they realized
Speaker 4: they could get parents to buy two products as opposed
Speaker 4: to one. So if I'm a kid and I want
Speaker 4: this we Fit or I want this Elmo doll the
Speaker 4: entire year Christmas comes, as a parent, you have promised
Speaker 4: them that you get to the store, you can't find
Speaker 4: it anywhere, So you know what, you buy them the
Speaker 4: next best thing. And then what those companies were doing
Speaker 4: is is right after Christmas, it's flood. Almos were flooded
Speaker 4: on the shelf. You can find it any and everywhere,
Speaker 4: and so as a parent, you also buy them the
Speaker 4: Elmo doll. And so they literally increase the lifetime value
Speaker 4: of that customer by not having the product that everybody
Speaker 4: wanted the most available when they needed.
Speaker 1: It the most.
Speaker 4: You're gonna buy something to just wrap and put under
Speaker 4: the shelves, and you're gonna buy that thing when it
Speaker 4: becomes available, and you literally doubled the lifetime value of
Speaker 4: that customer. What I learned when I read that book
Speaker 4: is that's exactly what was happening with that product. At
Speaker 4: that time that we were promoting it is parents went
Speaker 4: and bought anything that they could possibly buy from an
Speaker 4: electronic standpoint for Christmas. Right after Christmas and right after
Speaker 4: the holidays, that board was flooded and any and everywhere,
Speaker 4: And I just didn't realize that. I only understood the
Speaker 4: experiential component of bringing people in so that they can
Speaker 4: experience it and so that they would buy the product
Speaker 4: when it was available. So it was a weird time
Speaker 4: that we were in that I had that realization once
Speaker 4: I read that.
Speaker 3: So the whole idea is like to have it not
Speaker 3: in demand when you need it the most, and then
Speaker 3: overflow of demand after peak season is over.
Speaker 4: Yeah, So to not have it available when you need
Speaker 4: it the most, when you need it the most, you'll
Speaker 4: buy something else.
Speaker 5: I'm going to buy Mario tennis.
Speaker 1: Yeah.
Speaker 4: It's like if you you have a significant other and
Speaker 4: she wants this very specific diamonds, you can't. You've promised
Speaker 4: the diamonds because you know how important it is. It's
Speaker 4: the only thing that she's asked for. So you get
Speaker 4: to the jewelry store. The diamonds are nowhere to be found.
Speaker 4: You've gone to numerous stores, you cannot find it. You're
Speaker 4: not going back home without something that's done by design
Speaker 4: and intention. So you're going to buy that thing. And
Speaker 4: now when that thing becomes available that she really wanted, well,
Speaker 4: that want doesn't go away just because you got you
Speaker 4: buy the thing again.
Speaker 5: The stinker thing is perfect. It's like every Christmas Join
Speaker 5: is going to release eleven, right. If the kid doesn't
Speaker 5: get the eleven, they'll probably buy the kid pair of KDS.
Speaker 5: Nike sees that, Oh, restock and now everybody gets to
Speaker 5: have the shoe, and now you have the customer more
Speaker 5: than more than one purchase.
Speaker 1: Yeah, it's it.
Speaker 4: And I think one of the things about reading that
Speaker 4: book and understanding is that at first it pisses you off, like, man,
Speaker 4: I felt for all these.
Speaker 5: Traps as you was saying it, and I'm like, I
Speaker 5: think I felt it.
Speaker 4: But then I think as an entrepreneur, you can use
Speaker 4: that and turn that around, right. And so the difference
Speaker 4: between the two is, I think on the advertising industry
Speaker 4: it's there's a little bit of manipulation, and from an
Speaker 4: entrepreneurship standpoint, you can use that in your favor of
Speaker 4: thinking like, well, how do I market a product to
Speaker 4: this person? Where they if I don't have it available,
Speaker 4: then there's something else that's equally or close to what
Speaker 4: they want, but they still keep them around long enough
Speaker 4: that they also buy the thing that they want. There's
Speaker 4: one way to look at it, right. The other way
Speaker 4: to look at it is intention. Is your intention to
Speaker 4: manipulate people into buying two things? Or is your intention
Speaker 4: to increase the lifetime value of the customer in a
Speaker 4: meaningful way that increases their affinity to who you are
Speaker 4: and what you're building.
Speaker 1: I think there's another way to look at that, right.
Speaker 4: And then when I think of like black businesses, and
Speaker 4: I see this happen in the food business more than anything.
Speaker 4: You'll go to a restaurant they don't have like nine
Speaker 4: things on the menu.
Speaker 1: You're like, man, I'm never gonna come to this restaurant again.
Speaker 4: And then I've seen other other menus and other companies
Speaker 4: who will say, well, first come first, sir, right like
Speaker 4: if we run out, we run out, And you start
Speaker 4: getting to that early because they've set a different kind
Speaker 4: of expectation around the scarcity and limited availability.
Speaker 1: It's how you communicate it.
Speaker 4: In one instance, I see black businesses being demonized for
Speaker 4: that they never got what they say they gonna have.
Speaker 4: They never open when they say they're supposed to open,
Speaker 4: they close in early. And then I've seen it manage
Speaker 4: the expectation, manage around that. In other south By Southwest,
Speaker 4: the barbecue place there is a prime example. You know
Speaker 4: that if you don't get there at six o'clock in
Speaker 4: the morning, you may not get that barbecue because they
Speaker 4: once they run out, they run out. You're not saying, like, man,
Speaker 4: they don't have anything together. You know what, You wake
Speaker 4: up the next morning at six o'clock because you really
Speaker 4: want that barbecue. Everyone's spoken so highly about it, and
Speaker 4: you know that it's now a very kind of sacred
Speaker 4: experience that you have that you wouldn't have anywhere else
Speaker 4: because you get to try something that other people may
Speaker 4: not try because they've a lot. It's about how we
Speaker 4: manage expectations in business, and then how we communicate the
Speaker 4: value of what we're doing. In one end, you never
Speaker 4: going to go back there because they don't never have
Speaker 4: anything together. Is literally no difference. The supply is gone.
Speaker 4: You get there first, You get there first, one instances coveted,
Speaker 4: and then the other instance is demonized. And that's not fair,
Speaker 4: but it's a business lesson that people have to learn.
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