How can you use scarcity to persuade stakeholders to support your risk management strategies?

2 Why does scarcity work?

Scarcity works because it taps into two powerful psychological biases: loss aversion and social proof. Loss aversion means that people tend to prefer avoiding losses over acquiring gains. They feel more pain from losing something than pleasure from gaining something. Social proof means that people tend to follow the actions and opinions of others, especially when they are uncertain or under pressure. They look for cues from their peers, experts, or authorities to guide their choices.

4 Scenario 1: Time-based scarcity

Time-based scarcity means setting a deadline or a countdown for your stakeholders to make a decision or take an action. For example, you can say that you need their approval by the end of the week, or that you have only 24 hours to secure a vendor contract. You can also use a visual timer or a calendar to emphasize the urgency. Time-based scarcity works because it creates a sense of pressure and fear of missing out. It also reduces the chances of procrastination or indecision.

5 Scenario 2: Resource-based scarcity

Resource-based scarcity means highlighting the limited availability or quantity of a resource that your stakeholders need or want. For example, you can say that you have only a few slots left for a training session, or that you have a limited budget for a contingency fund. You can also use a graph or a chart to show the scarcity of the resource. Resource-based scarcity works because it creates a sense of value and competition. It also increases the perceived worth of the resource.

6 Scenario 3: Opportunity-based scarcity

Opportunity-based scarcity means emphasizing the unique or exclusive nature of an opportunity that your stakeholders can gain or lose. For example, you can say that you have a rare chance to partner with a leading expert, or that you have a window of opportunity to launch a new product. You can also use a testimonial or a case study to show the success of the opportunity. Opportunity-based scarcity works because it creates a sense of curiosity and excitement. It also appeals to the desire for novelty or differentiation.

7 Scenario 4: Social-based scarcity

Social-based scarcity means showing the popularity or endorsement of your risk management plans by other stakeholders, experts, or authorities. For example, you can say that you have the support of the senior management, or that you have positive feedback from the customers. You can also use a rating or a ranking to show the social proof of your plans. Social-based scarcity works because it creates a sense of trust and conformity. It also leverages the influence of others on your stakeholders.