Introduction
You are likely exhausted from competing in crowded marketplaces where clients beat down your prices and demand constant discounting. Modern businesses face an oversupplied world where customers have endless choices and your marketing efforts often fall flat. Daniel Priestley explains in Oversubscribed that you can break this exhausting cycle by shifting from chasing clients to creating an environment where people wait in line to work with you.
A business only achieves a profit when demand outstrips supply, requiring entrepreneurs to create proprietary markets and build campaign-driven enterprises.
The book outlines a systematic approach to turning your business around through several core shifts. You will learn how to identify your ideal audience, design compelling campaigns, and establish total control over your pricing and capacity.
Consider these questions as you read:
- How do you stop competing on price in open markets?
- What mechanisms create a massive surplus of demand for your services?
- How do you build campaigns that run your business on your terms?
1. Only Oversubscribed Businesses Make a Profit
A business only achieves a profit when demand outstrips supply, meaning that some willing buyers must miss out.
Market forces dictate that when supply exceeds demand, prices and margins fall into losses, whereas a shortage of supply relative to demand allows a business to command high prices and tolerate profit. You face these underlying economic realities regardless of your team dedication or product quality.
Gary Vaynerchuk auctioned a one-hour consultation for charity and reached £3,900 between two competitive bidders, eventually raising £8,000 total by splitting it into two consultations.
Business financial rewards fall into three states based strictly on the relationship between supply and demand:
- Oversubscribed: Demand outstrips supply, resulting in profit being tolerated on top of normal wages.
- Balanced: Demand and supply are relatively even resulting in normal wages being tolerated but not profit.
- Undersubscribed: Excess supply is available above demand, resulting in losses.
Uber floated at an $80 billion stock market valuation despite never making a profit. In the days following its float, the stock price dropped 10 percent due to more sellers than buyers.
Facebook purchased WhatsApp in 2014 for $19.3 billion when it had a team of under 100 people.
2. The Only People That Matter Are Your People
Successful brands build proprietary markets by focusing on a tiny group of perfect clients and cultivating deep trust through the 7-11-4 principle.
Instead of accepting average pricing dictated by an oversupplied industry, you can build a distinct fan base. You do not need to fight in an open market. In the United States, over 160,000 people hold Screen Actors Guild memberships while barely 3,000 make above minimum wage from acting. Only 1,000 US actors make over $150,000 a year. Yet stars like George Clooney and Brad Pitt command millions because they have created their own market. Kylie Jenner amassed 120 million Instagram followers through the same focus.
A highly lucrative business does not need a massive audience. You can thrive by serving a very small, highly exclusive group of perfect clients. Focusing on a handful of high-value clients eliminates the massive operational overhead and low pricing associated with serving thousands of average customers.
According to PayScale.com, the average earnings of a life coach sit at $32.50 per hour. Coaches with 5 to 10 years of experience expect earnings of $50,000 per year. By contrast, life coach Rich Litvin works with only eight key clients at a time who pay upwards of $80,000 per year. This tiny client base generates $640,000 a year in annual coaching revenue. He later launched a group program called 4PC capped at 60 members that generated over $1 million in sales.
Human brains form trust and a sense of tribal connection based on specific thresholds. You build familiarity when prospects accumulate sufficient exposure through digital media and content. Google refers to this early research phase as the Zero Moments of Truth, or ZMOT.
You can guide this research phase by applying the 7-11-4 principle:
- 7 hours: the amount of time spent with someone to move from an acquaintance to a friend.
- 11 interactions: the frequency of communication exchanges required to significantly increase purchase likelihood.
- 4 locations: the number of different settings or contexts required to build strong trust.
To build an engaged market of loyal followers, you must provide enough freely available digital content for a prospect to research deeply. When potential buyers research your business online, they look for credible insights, stories, examples, and demonstrations rather than pure sales collateral. Your brand needs to be content-binge-ready across digital assets so prospects can easily accumulate those essential hours of exposure.
3. First Make Your Market Then Make Your Sales
Oversubscribed businesses warm up specific audiences and signal demand before allowing purchases across four distinct market positions.
Taking a product to the broader market without preparation leads to poor results. You should educate and entertain people, ask for small commitments called signals, and hold off on selling until there is proven interest.
- Educate or entertain people with content.
- Ask people to signal their interest.
- Hold off trying to sell until there is sufficient interest.
Samsung rushed to launch the Gear S smartwatch before Apple to beat them to the market and shipped 800,000 watches worldwide with high returns and discounts. Apple took a year to build a market, used soft signals and luxury positioning, and went on to sell 4 million Apple watches sold in 2015 and 40 million Apple watch units sold within five years.
To become oversubscribed, you must achieve an imbalance with more buyers than sellers by dominating one of four specific market positions. Market imbalances occur through innovation, strong relationships, extreme convenience, or a price advantage. You cannot successfully combine competing positions, such as being both highly innovative and extremely cheap, so you must focus on one main driver. Small service businesses compete on price by keeping low overheads, while tech giants or disruptive creators use innovation like the Key Person of Influence programme.
4. People Buy When the Conditions Are Right
Customer behavior is stimulated by transparency of demand and supply tension, celebrating client success, and selling emotional wants rather than logical needs.
You do not buy merely for logical or emotional reasons. Your behavior is stimulated by the buying environment. By showing genuine limits on capacity and high public interest, you create a stampede effect.
Daniel Priestley's team launched a workshop by asking for interest in a Facebook Group, capping attendance at 65 per city, and setting a price of $795. Within 48 hours, 175 people registered, and tickets sold out on the first day, raising $100,000 before flights were even booked.
Paris department store Galeries Lafayette forces a queue for Chanel handbags where customers feel lucky to buy high-priced items, whereas a nearby store shouting about cheap stock is avoided. Desperate sales tactics, deep discounts, and pushy salespeople turn potential buyers away.
You must build demand by applying these practices:
- celebrate your clients;
- make your clients the stars of your show;
- get famous on their success stories;
- spend money on celebrating existing clients rather than chasing non-buyers.
Need is logical and weak in driving sales, whereas want is emotional and reigns supreme. You must package what people need alongside what they want.
Singapore has high vehicle taxes and a 90 km/h speed limit, making a Ferrari impractical, yet it sells more Ferraris per person than almost any other country because people buy what they want. You succeed by tapping into immediate human desires and making actions desirable, interesting, cool, and fun.
Follow these steps to align with customer desires:
- ask people what they want;
- build it for them the way they want it;
- explain it in the context of what they want;
- package up what they need along with what they want.
5. Be Different and Set Your Own Rules
Attempting to please everyone creates a bland commodity that must compete on price. A clear philosophy based on strongly held beliefs, maxims, and a vision for the future acts as a magnet for a dedicated market.
Challenging industry norms through a strong personal philosophy and strict standards builds long-term brand exclusivity and operational space.
Chef Pete Evans polarized the Australian media with his uncompromising philosophy on healthy and processed foods, which successfully attracted a base of loyal fans and book buyers. There were 4 million people watching Pete Evans weekly.
Oversubscribed businesses protect their standards by having the courage to say no to unprofitable clients, discounts, and misaligned applicants. Saying no acts as a filter that preserves brand exclusivity and creates operational space for ideal clients.
Studio 54 famously turned people away at the door for wearing the wrong clothes, and Google puts over one million applicants through rigorous testing before rejecting 99 percent of them. Google deals with 1 million applicants for Google each year.
Making people wait for information, release dates, or physical access builds hunger, desire, and a strong perception of quality. Rushing to squeeze customers in ruins the brand experience.
Granger & Co in Notting Hill has people queue in the rain for a breakfast table, but once inside, customers are never rushed, maintaining an aura of quality and high demand.
Challenging industry norms by adopting a contrarian approach helps businesses stand out from competitors who exaggerate or follow conventional practices. Doing the opposite of what standard competitors do builds deep trust and high market regard.
Trader Jason Graystone defied financial trading gurus by publishing YouTube videos explaining how hard trading is and how modest his returns were, which built a thriving community of elite traders.
Follow these practices to set your own rules:
- identify your strongly held beliefs about what you do;
- define what you stand for and what you stand against;
- determine the change you want to see in the world;
- develop high standards and stick to them;
- politely turn away people who are not a good fit;
- say no to anyone and anything that is not right.
6. Value Is Created in the Ecosystem
You cannot expect to succeed by offering a single product or service in isolation. High-performing businesses create interconnected product ecosystems, give away free information, and use small commitments to drive sales.
Oprah Winfrey makes far more money from a vast ecosystem of books, magazines, business stakes, and media deals than from her TV appearances alone.
Oprah Winfrey purchased shares in Weight Watchers, and the shares doubled in 24 hours when the deal was announced simply due to her ability to feature the brand in her media ecosystem.
The internet flooded the world with free data, collapsing the value of pure information. You must give away your ideas freely and charge exclusively for implementation work.
Lululemon offers terabytes of yoga information and free in-store yoga classes, so when customers want to get active, they buy their apparel and gear from Lululemon.
Move the free-line and design your offers along a clear spectrum of value:
- give away information or ideas as thought leadership;
- sell components as basic building blocks;
- offer supervision as a low form of implementation;
- engage in done with you work collaboratively;
- provide done for you complete solutions requiring no external client input.
People freeze when forced to make a large financial commitment upfront. You can secure soft commitments first to build momentum and convert prospects into clients.
Matthew Michalewicz raised 3 million dollars after the 2001 dot-com crash by first asking investors for non-binding expression of interest forms rather than asking for direct funding. He gathered 4 million dollars in soft expressions of interest in six weeks.
When you feel restless, do not abandon your core winning formula. Innovate the ecosystem supporting your product rather than copying rivals.
Blackberry tried to compete with Apple by hiring Alicia Keys and designing a sleek consumer phone, ignoring their core winning formula of being safe, secure, and compatible for enterprise IT departments. The Porsche 911 kept its frog-like design introduced in 1963 while continuously innovating its supporting ecosystem.
7. Meet People Where They Are
Data-driven marketing and scorecards allow businesses to speak directly to individual values and long-term consequences.
Marketing evolved from radio broadcasts in the 1930s when Franklin D. Roosevelt used radio Fireside Chats. The medium shifted to television in 1960 for the televised live debate between JFK and Richard Nixon. Barack Obama pioneered social media campaigning in 2008, while Donald Trump won using data analytics in 2016.
Donald Trump utilized Cambridge Analytica in the 2016 election to harvest Facebook data and deliver uniquely tailored ads to voters based on their specific personal views and geographical importance. You can implement similar hyper-targeted marketing to reach precise segments, such as an audience segment earning 80000 pounds in an online ad.
Online scorecards and quizzes serve as primary marketing tools to collect proprietary customer data at low cost while delivering high customized value. By inviting prospective clients to answer diagnostic questions about their business or life, you instantly segment your audience and learn about their frustrations, performance levels, and goals.
Dent runs Facebook ads directing people to the Influence Scorecard, where users answer 40 questions and receive a 20-page custom influence report while Dent automatically captures valuable user data. You can apply this approach directly to your operations:
- conduct surveys, scorecards, and quizzes with your clients to access unique data insights.
To sell a high-value solution, you must clearly map out the long-term consequences of a customer's small decisions, showing a crystal ball of future outcomes. People do not spend big money to solve small, insignificant problems. By tracing how minor oversights accumulate into major disasters or missed dreams, you make the problem large enough to justify a complete and premium solution.
The poem For Want of a Nail illustrates how the loss of a single horseshoe nail ultimately leads to the loss of an entire kingdom.
Effective communication requires linking what you offer directly to the customer's existing unconscious hierarchy of values rather than forcing them to value what you do. Every person possesses an unchangeable set of dominant personal values that dictates what they spend time and money on. Instead of trying to change their priorities, you must put your product inside the trailer of the customer's existing value truck moving at 100 miles an hour.
A fitness program should not be sold by lecturing about health, but by linking fitness directly to having more energy for one's children and sharing better experiences with family. A husband might refuse to buy a program by saying he was worried about personal finances, yet moments later he spends 30 pounds on a cookbook that fits his immediate values.
8. Nothing Beats Being Positively Remarkable
Traditional advertising often markets your competitors because customers research online reviews instead of trusting ads. Shifting your budget into superior products makes word-of-mouth do the marketing for you.
Oversubscribed businesses shift at least half of their traditional advertising budget into a remarkable budget focused on superior products and customer service.
Google succeeded by leaving its homepage clear of ads, resulting in load times between 10 to 30 seconds faster that spread through word of mouth. In the modern digital landscape, your reputation is defined entirely by what Google search results show about you. A stupid mistake made in 2010 can cost your business a decade later in 2020.
Building a trusted personal brand is 20 times more effective than promoting a faceless corporation. Rob Gardner was appointed to a major investment fund board overseeing 100 billion dollars.
- Take at least 50 percent of your traditional marketing budget and transfer it to the being remarkable budget
- Live your life as though everything you do will be documented by Google
- Pay close attention to negative reviews posted online and mop them up as quickly as possible
10 Key Ideas
- A business only achieves a profit when demand outstrips supply, meaning that some willing buyers must miss out.
- Successful brands build proprietary markets by focusing on a tiny group of perfect clients and cultivating deep trust through the 7-11-4 principle.
- Oversubscribed businesses warm up specific audiences and signal demand before allowing purchases across four distinct market positions.
- Customer behavior is stimulated by transparency of demand and supply tension, celebrating client success, and selling emotional wants rather than logical needs.
- Challenging industry norms through a strong personal philosophy and strict standards builds long-term brand exclusivity and operational space.
- High-performing businesses create interconnected product ecosystems, give away free information, and use small commitments to drive sales.
- Data-driven marketing and scorecards allow businesses to speak directly to individual values and long-term consequences.
- Oversubscribed businesses shift at least half of their traditional advertising budget into a remarkable budget focused on superior products and customer service.
- Making people wait for information, release dates, or physical access builds hunger, desire, and a strong perception of quality.
- Building campaign-driven enterprises allows entrepreneurs to run their business entirely on their own terms.