Most of the factors that lead the super-profitable live auctions are completely executable. With a little bit of planning and a different strategy, your live auction can raise the money your charity needs you to raise. This document lays out 26 steps to totally CRUSHING your next live auction!
Have you ever experienced the heart-wrenching disappointment of a live auction going awry during a fundraising gala? If you have, you know it’s an awful feeling. You planned for months. You chose a venue, your caterer, your AV team, your auctioneer and your theme. You invited hundreds of people. You showed up early to set up and decorate. You wrote a script, recruiting live auction items and then at the appointed time in the program, the live auction started, and the whole thing just fell flat on its face.
This was your one big chance in the year to get all those people in the room, tell them about the great work you’re doing and offer them some items that would entice them to bid high and bid often. But the live auction didn’t raise anywhere close to the amount you were expecting, and the whole thing was a professional embarrassment and a crushing disappointment. Your mission desperately needed those dollars.
The good news? It doesn’t have to be this way. Most of the factors that lead to live auction failure are completely preventable! And most of the factors that lead the super-profitable live auctions are completely executable. Yes, with a little bit of planning and a different strategy, your live auction can raise the money your charity needs you to raise. This document lays out 26 steps to totally CRUSHING your next live auction!
You have to decide if a live auction is the right type of fundraising vehicle for your event. While the excitement and energy of a live auction might appeal to some, it’s not a proper fit for every fundraising event.
To determine if a live auction is appropriate for your gala, you should first determine the primary focus of your event. Is your gala supposed to be primarily:
Each of these ambitions is an important ingredient in every fundraising event, but leaning too heavily on any one of the “Four F’s of Fundraising” tends to have a negative impact on the other three. So it’s important to have a clear understanding of the “type” of event you’re hosting so that you know exactly which of the Four F’s you want to emphasize and then make your decision about whether a live auction would be appropriate.
Your event is a fundraiser when the primary purpose of the event is to raise as much money as possible. A live auction is generally a good fit for this type of event. With a pure fundraiser like this, you’re leaning on your board members and your sponsors to fill the room with people who have resources. Your live auction will offer them unique packages that they can’t easily obtain elsewhere so they’re happy to bid on them at your event, which will help your organization raise money.
Your event is a Friend-raiser when the primary purpose is to introduce the organization to the audience in hopes of recruiting more volunteers to your mission. With this audience, the commitment of their time is more important than their financial contributions. As a general rule, teachers are not a great source for fundraising, because they don’t have any money! They have plenty of passion and goodwill, but they lack the cash to financially support you, so an audience full of teachers won’t produce much fundraising revenue.
UNLESS --- you’re an organization like Susan G Komen’s annual Race for the Cure. When the Komen organization throws a Friend-raiser and recruits 20 teachers to run or walk in their annual race, those teachers become passionate advocates who often have a deeply personal connection to the mission. When they ask their friends and family to pledge money, everyone responds with great love and generosity and these teachers raise $2,500 each, and Komen makes $50,000 as a result of its Friend-raiser. Another example of the effective use of a Friend-Raiser: Court Appointed Special Advocates (CASAs) is an organization that serves one of the most vulnerable populations in our country – children who have been abused or neglected and are now in the court/foster care system.
CASA organizations need to raise money, but they also need to recruit volunteers who can get trained and become CASAs, because there are far more kids who need a CASA than there are CASAs available. So a Friend-raiser that shares the need, the mission, the strategy and process of getting involved, might persuade 20 or 30 new people to seek out additional information, and that would be a tremendous success for the CASA organization.
A Fun-raiser is an event in which the primary purpose is to throw a great party and ensure that everyone has “Fun”. Examples of these types of events would be fundraising concerts, fashion shows, 5k walks/runs, or any other event where the fundraising is primarily achieved through ticket sales, sponsorships and pledges. Your attendees are helping you raise money just by being there, so you wouldn’t ask them to also participate in a live auction.
In a Fund-Praiser, the goal is to honor a titan of industry who has made a large impact on your specific charity or the societal problem that the charity is trying to solve. Your honoree might be a builder who has made a commitment to affordable housing and who has employed previously homeless people on his job sites. With a Fund-Praiser, your honoree may purchase two or three tables, and his fellow titans, who admire him and want to support him, will also purchase tables. And his major vendors, who want to show their appreciation, also buy tables. During the event, these titans may try to outdo each other in the live auction. In that case, honoring a significant member of the community and encouraging him or her to invite their friends will raise far more money than a typical fundraiser.
It may seem silly to say, “Remember, your event is a fundraiser!” Of course, you’re going to remember that. Raising money is the primary reason that you’re hosting your event. Raising money is the reason that you’re considering holding a live auction during your event. It seems idiot to suggest that you’d need to be reminded that your event is a fundraiser.
But it’s important to keep this at the front of your mind because the “live auction” format of selling is traditionally used in two ways:
Liquidation is one of the auction format’s greatest strengths. Imagine a BMW dealership that accepts all types of vehicle trade-ins when people are purchasing new or used BMWs. That BMW dealership takes in Fords, Chryslers, Hondas, Kias, etc. and it ends up with a big collection of non-BMW vehicles that it has to get rid of.
So what do they do with all those trade-ins?
They ship them off to an auction house to be liquidated.
Liquidation is the process of taking physical inventory that you no longer want or need and turning it into cash. Liquidation does not deliver retail values. Depending on the product, the volume, the time of year, the economy, etc. you may liquidate inventory at 50-cents-on the dollar or even just 5 or 10 cents on the dollar.
So it’s important to recognize that the live auction during your fundraiser is NOT a liquidation event. You’re not trying to sell everything for half price or 10-cents on the dollar. You’re not trying to entice your donors to get the best “deal” at your event.
The second traditional function of a live auction format is “Wholesale Price Discovery”.
Who buys those cars that the BMW dealership sent to auction?
Used car dealers buy them.
Someone who owned a Honda Accord and traded it in for a BMW probably has a professional career. They probably dress nicely and have to look professional at work. So it’s likely that their Honda Accord was a fairly recent model vehicle and it was probably serviced regularly, washed regularly and generally well maintained.
A used car dealer who specializes in Hondas might be very interested in any Honda that was traded in at a BMW dealership. So he goes to auto auctions every week looking for inventory for his used car lot.
But he’s not going to pay full retail for the car. He’s there to buy the car at a wholesale price that might be 50% to 60% of the retail value. He has to maintain enough margin ensure that he makes a profit when he sells the car at full retail. So you want to make sure that the live auction at your fundraiser is NOT a wholesale price discovery event.
Your live auction is a FUND-raiser. The goal of your live auction is to sell things for more than their retail value. You don’t want to do anything that will trigger a discount-seeking mentality in your audience.
As we go through this A to Z Guide, we’re going to explain the various strategies and techniques you can use to ensure that your fundraiser remains a FUNDRAISER and doesn’t turn into a liquidation event or a wholesale price discovery event.
You can maintain the fundraising aspect of your event by selecting the proper items, having the proper number of items, putting them in the right order, describing them in the right way, etc. There are a lot of tools in this guide to help you achieve your fundraising goals.
Make sure you acquire the right types of items for your live auction. You want to auction off “experiences” not “things”. An Apple laptop computer is not a good live auction item at a fundraising gala, because it has a known or easily knowable value. If the Apple laptop is worth $1,000, then the likely sales price is going to be $900 to $950. People will not knowingly pay more than the known value of an item.
However, if you’re auctioning off an “experience” like a couples’ staycation that includes dinner at a fancy steakhouse, tickets for a famous play, overnight stay at a nice hotel and couples massage in the morning, it might sell for $3,000, even though the actual value of the underlying gift certificates is only $1,000.
In a fundraising auction, bidders will happily pay way above the value if you’re selling an “experience”. If you’re selling a “thing”, it puts them in discount-seeking mode, and they start thinking about getting a good deal on the item rather than focusing on how much they’re going to enjoy the experience of the item.
Make sure you have the right number of live auction items. We believe that 5 to 7 items is never wrong. That doesn’t mean that 3 items or 12 items is absolutely wrong. It just means that 5 to 7 tends to be a suitable range for nearly every event.
Here’s the deal with your live auction: Most of your audience is not interested and doesn’t care about the live auction. They’re just waiting for it to be over.
Let’s say you have 500 people in the room, and you have 10 live auction items. That means that 2% of your audience members will win a live auction item, and another 2% will be the top losing bidder. So 4% of your audience is really interested engaged, while 96% of your audience is waiting patiently for it to be over.
You might say, “Well the cure for that is to add MORE live auction items so additional people in the audience have a chance to win, and more people will pay attention.”
The problem with that reasoning is that adding items doesn’t solve the basic problem -- the majority of the audience still won’t win anything. If you had 20 live auction items, that means 4% of the audience would win, 4% would be the first losers, and 92% are still disengaged. We can’t solve this basic math problem by adding items.
We have to remember the potential harm you’re inflicting on the vast majority of your audience who is not interested in the live auction. This big body of people is a group that you absolutely want to have in the room, engaged and motivated for your paddle raiser, which will typically come after your live auction, so you don’t want to squander their attention or good will.
In a gala setting, where people are drinking, socializing and not paying close attention, you should allocate 2.5 minutes per item to your live auction. That means our recommendation is that you commit no more than 17.5 minutes to your live auction. We think that’s about the maximum tax you can put on the attention of your overall audience if you want them to still be engaged and enthusiastic during your paddle raiser.
The other big reason for not having too many items, is that you don’t want your live auction to fall off a cliff. When you have 12 high profile items in your live auction, but only 8 people in the audience who actually have the means and desire to buy things, your live auction bidding will screech to a halt, and you will watch helplessly as your whole event falls into a pit of terrible, awkward pleading and begging. It’s not pretty. When your live auction falls off a cliff, the entire energy of the event is destroyed. You don’t want this to happen to you.
Your next challenge is to select live auction items that are the right “size” for your event. You want to make sure that the ultimate selling price of your live auction items matches the economic means and discretionary spending power of your audience members. But how can you know if you should be selling a $10,000 African Photo Safari or a $1,000 Staycation package?
Fortunately, there is a simple tool to help you calculate which “size” items you should sell. It’s called -- Your Individual Ticket Price. How much are you charging for a single ticket to enter your gala? I know …. you’re thinking, “Reggie, our individual ticket price doesn’t matter, because all of our seats are sold to sponsors as tables.” Yes, I understand that, but you still have an individual ticket price, and we’ve learned that regardless of sponsorships and table sales, there is a rough correlation between the individual ticket price and the ultimate selling price of your live auction item.
Here is a chart that shows the correlation:
INDIVIDUAL TICKET PRICE | AUCTION ITEMS SHOULD SELL FOR
Less than $100 $500 to $1,000
Between $100 and $175 $1,000 to $3,000
Greater than $175 $3,500 and higher
This is a simple technique to determine whether an item is a right size for your event. Of course, you also want to study the live auctions that you’ve conducted in the past few years, and see what types of items you sold and how much they brought in.
If you look at the past three years worth of results and see that most of your live auction items have sold in the $1,500 to $3,000 range, then you should select items that you think will sell in that range. You probably don’t want to include something that’s expected to sell for $7,000, and if you had items in previous years that sold for less than $1,000, you should probably move those out of your live auction and put them into your silent auction.
The simple secret to creating a memorable and profitable live auction is to not overcomplicate things. There are five super popular, super profitable items that you can include in your live auction that never go out of style.
Vacation packages can help your organization raise a lot of money because nearly everyone in your audience goes on vacation. So they know how much it costs, and it’s already something they budget for, so you’re not asking them to come up with additional money. You’re just asking them to allocate their vacation money to purchase the vacation you’re offering.
Your vacation package is appealing because you’ve eliminated the need to think about “where” they want to go, and “what” resort they’ll stay at, and “what” they’ll do while they’re there. They like the fact that you’ve made all the plans and everything is wrapped up with a nice bow for them at a price that fits their budget (or only exceeds it by a little). Vacation packages have broad appeal, and lots of people in your audience can bid on them.
Staycations are very popular items in fundraising auctions, because they’re easy, local getaways that most people in your audience are unlikely to purchase for themselves anywhere except for a charity event. We consider Staycations to be any overnight package in the city in which your donors live or within easy driving distance of that city.
A typical staycation will include:
Staycations are a great opportunity for the parents to get away and enjoy a romantic evening, but the best part is not what happens at night. The best part is in the morning you don’t have the kids rushing in to jump on the bed and jolt you awake!
This is the type of package that couples typically won’t go out and purchase anywhere else. Of course, they’ll make reservations at a restaurant, or buy tickets to a show, but rarely will a couple make all of these plans on the same weekend to create their own staycation. By offering this package, you’re giving them something that they value, but wouldn’t normally purchase for themselves.
Another fantastic live auction item is a unique dinner party experience. You can ask a local catering company to donate their catering services -- maybe the caterer who is providing the food for your gala will donate this service.
The winning bidder will receive a catered dinner party for 10 at their home. This item also fits in the category of being something that is desirable by many members of your audience, but not something they would normally purchase themselves.
The appeal of a catered dinner party is that you get a great meal, prepared and served in your home, but you don’t have to do the shopping, or the cooking or the serving or the cleaning afterward. You get to be pampered right along with your guests rather than spending your time shuttling to and from the kitchen.
Here is a simple truth: Spouses love each other and they want to do special things for each other, but with the demands of work and family, it’s often difficult to plan romantic outings together. So anniversaries get overlooked, birthdays come and go with a simple “Happy Birthday” but not much else, and the couple shrugs it off. They know they love each other, and they know the reason they don’t make a big deal about things is because they’re busy. But what if you could take care of the planning for them?
What if you had a table for four already reserved at a cool trendy restaurant that’s always full on Valentine’s day?
That reservation will get transferred to the name of your winning bidder, and they can invite another couple to join them for a Valentine’s double date.
What if you had tickets to see a cool new show that’s coming to town?
What if you had tickets for a sporting event?
What if you had three sets of overnight stays at local hotels that you could pair with the Valentine’s dinner, the show and the sporting event to create mini-staycations?
These are the basic building blocks of a great date night package. Each date night could include a stay in a local hotel + a gift card at a local restaurant + and a fun experience like couples massages, a guided bike tour of the city, a bird watching experience, tickets for a parade of homes.
Unique experiences are things that are super appealing to your audience, but it’s not possible for them to go out and purchase the experiences at the mall or order them on Amazon or book them through a travel agency.
This includes experiences such as:
You’ve done a great job of acquiring live auction items. You’ve made sure they were experiences, not “things”. You’ve curated your items down to just the best 5 to 7 to offer to the audience. Now your next challenge is to put them in the proper order.
You want to start with your lowest valued item, ramp up to your highest valued item, and then ramp down slightly.
Here’s why this order works.
Even though your audience is anticipating the start of the live auction, they’re not ready to spend big dollars right out of the gate. The audience needs to “warm-up” for the live auction the same way that track and field athletes need to warm up before running their races. You don’t step off the bus and sprint full speed. You jog first, and gradually pick up the pace as your body warms up.
You want to do the same thing with your live auction. Imagine if you led off with your most valuable item, but two of your biggest potential bidders were out of the room -- one was at the bar getting a drink and the other was in the restroom! They aren’t even aware that the auction has started, and by the time they get back in the room, your best item will have sold to someone else for half the value either of them would have paid.
We also know that it’s human nature for people to pause and take more time considering their options when they have a lot of possibilities in front of them. If you want people to bid high on your best items, you need to take away other options first. If you come in with it too early, they hesitate as the price increases and they start thinking, “maybe I’ll pass on this one and get something else in the live auction.” You don’t want them to do that. You want to incrementally eliminate lower-priced options and when you get to the most valuable items, there’s a feeling of scarcity in the room. Anyone who wants these items really needs to act.
So, you might ask, why not place the most valuable item at the very end and work your way up to a big finale? Here’s the reason you don’t want to do that. Let’s say that your highest value item sells for $5,000, and you saved it until the very end. So you’ve got a winner at $5,000, but you know what else you have? You have a person in the audience who bid $4,900 and lost. This person mentally committed to spending $4,900 in your live auction, but now they have nothing left to bid on. The auction is over.
That’s why you don’t want to leave your highest value item to the end. You want it to come in the late middle of your live auction, and then have a couple of slightly lower value items coming behind it. That $4,900 losing bidder might pay $4,000 on the next item, when they might have limited themselves to $3,500 if they hadn’t just bid $4,900 on something else.
So when you put your live auction items in order, you want to gradually work up to your best items. If you have 7 live auction items, then your most valuable item should be parked in slot #5. Your second most valuable item should be in slot #4, and your third most valuable item should be in slot #6.
IMPORTANT NOTE: “Most Valuable” is a subjective term, so you want to position the items based on what you think YOUR audience will pay for them. For example, we did an auction recently where Broncos Hall of Famer Terrell Davis was the guest speaker, and we auctioned a Terrell Davis Commemorative Hall of Fame Football. It sold for $9,500 even though it’s true objective value was only about $300 to $500.
Meanwhile, in that same live auction, a vacation in France sold for $4,500. Clearly, the vacation in France is “more valuable” than an autographed football, but you have to think NOT about the actual value of things. You have to put your live auction items in order based on what you think your audience will pay.
This issue is a real challenge for some organizations because they are in the habit of publishing the retail values of their live auction items in their program guides, in the powerpoint slides used to feature each item, and in any other printed material that they have.
Why do they do this?
Because it’s common practice to do it in the SILENT auction. In the silent auction, you’ve got packages that include gift certificates, so the value of those certificates is important information to share. There’s a big difference between a $50 gift certificate and a $500 gift certificate, so publishing values in the silent auction is fairly common. But when that silent auction tactic is transferred onto live auction items, it spells disaster for your live auction. Here’s what you have to remember: Your live auction is a FUNDRAISING event, and in a fundraising event, people might pay many multiples above the actual value of the item, because the item is rare, or special or hard to obtain or the package you’ve put together is especially convenient (e.g. airfare, ground transportation, and hotel all taken care of). Remember the example I shared earlier about the Terrell Davis Commemorative football that sold for $9,500? Do you think it would have sold for that much if we had published the estimated $300 to $500 retail value of the football? Of course not.
If you tell people the retail value of items, you’re essentially telling them that they should NOT pay more than that value. You will trigger discount seeking behavior. People will be trying to get a good deal on your live auction items rather than win them by paying far more than full retail.
The reason that football sold for $9,500 (actually we sold two of them for $9,500 each … but we’ll get to “selling it twice” a little later), was because Terrell Davis was at the event, and he was going to personalize the football for the winner, take a photo with them, and they would forever have the story of the night they got a football signed by Terrell Davis.
The football may have a retail value of $300 to $500, but the experience of interacting with Terrell Davis was priceless. The reality is that if you’re selling things that are rare, difficult to obtain and/or unique experiences, you don’t have to worry about retail values, because items like that don’t have retail values.
For example, suppose you were auctioning off the following package:
What’s the retail value of this package? You might be tempted to include the face value of the suite tickets, and valet parking and the cost of the dinner, but that’s not the real value.
Great live auction items do not have easily discernible retail values, because there are always things in the package that are unique, difficult to obtain or literally don’t have a retail value.
Okay, now that we’ve told you to NOT publish the retail value of your live auction items, we’re going to explain the exception to that rule. Occasionally, it makes sense to publish the retail value, when the value is so high that you know there’s no chance that your audience would ever get to it.
For example, suppose you have a board member who donates a week at her palatial estate, with a 12-bedroom, 8,000-square-foot house that sleeps 30 people. The house rents for $10,000 per night, but your board member has offered a week-long stay, at no cost to your organization, even though she knows that it will probably only sell for $10,000 total in the live auction.
This is a case in which you absolutely want to share the retail value, because people in the audience need to know what an amazing opportunity they have to purchase a vacation they would never be able to afford under normal circumstances. This scenario doesn’t arise very often (unfortunately), but when it does, you definitely want to share the actual retail value of the item, because it will help you raise more money.
The next thing you need to do is ensure that your live auction is located in the proper spot in your timeline. A mistake that many nonprofits make is putting the live auction too late in the program.
Why do they do that?
I believe there are many reasons, but the most basic and fundamental is that most charities are terrified of making a direct request for money, so they feel that they have to spend a lot of time “justifying” their value before they ask the audience to support them.
This fear leads to decisions such as:
Our advice is to put the live auction in the high energy portion of your event, which is generally between 7:45 p.m. and 8:30 p.m. for an event that starts with a cocktail hour at about 5:30 p.m.
We believe that 9 p.m. is the witching hour for fundraising.
That’s when your gala starts having to compete with a lot of other challenges, such as:
You want to get your live auction completed before all this starts happening to your audience. It may feel scary to move the live auction up in the program before you’ve done all the “justifying” for support, but you don’t need to be afraid.
When the energy is high, the audience will gladly accept something as lively and entertaining as your live auction, and their bidding will be much more energetic than it will later in the night.
When you combine putting the live auction in the high energy part of your program, having items that are “experiences” not “things, limiting the number of items to no more than 7 and selecting items that are the right “price” for your audience, you unlock the potential of your live auction and you might raise 10%, 20% or even 30% more in your live auction than you did the previous year.
So how long will the live auction take? Sometimes, when you’re looking at fast-talking auctioneers who sell cars, cattle, storage units, etc. their mouths are moving a mile-a-minute, and they’re selling everything super fast.
A really talented auto auctioneer might sell a car every minute, and dispatch with a lot of 60 vehicles in one hour. But remember, as we discussed earlier, an auto auction is a Liquidation Event for the dealerships that accumulated a bunch of trade-in cars, and it’s a Wholesale Price Discovery event for the used car dealers who are purchasing inventory for their lots.
Neither of those describes your auction, so you’re not necessarily looking to sell your items super-fast. You want them to sell at a reasonable speed, but the important thing is to make the most money possible. We believe you should carve out 2.5 minutes per item for your live auction.
That may seem like a long time, but the auctioneer has to read the description of the item, which probably takes 20 to 30 seconds, then conduct the bidding, close-out the item and move on to the next item. Some items will sell very quickly, and some will take a little longer, but on average 2.5 minutes per item is the amount of time you should allow in your program.
Your auctioneer should be moving with a nice quick pace to keep up the energy and the urgency to bid, but he or she shouldn’t be going so quickly that they confuse the audience or leave money on the table.
The live auction and the paddle raiser are typically the most valuable in event fundraising. The live auction is obviously the act of making money by selling a few unique experiences, while the paddle raiser (aka Fund-a-Need, aka Cash Call, aka Special Appeal) is a technique to make money simply by asking for donations. The traditional order is to have the live auction first, followed by the paddle raiser.
That’s still the case in most events, and there are good reasons to support this order:
Traditions are important elements of any event, because people have come to expect them, and it can sometimes be jarring to the audience when some tradition has been removed. So it’s traditional to have the live auction before the paddle raiser, and in this case, the circular reasoning of “It’s there, because it’s always been there” does carry some weight.
Some groups feel that the live auction is a nice ice breaker before their paddle raiser. The audience gets warmed up on lower value items, then medium value items, then higher value items, and it gets the thoughts of big money in the air.
Some of your guests plan to purchase things in your live auction, and they also plan to make a contribution during your paddle raiser. So having the live auction first allows them to know what they’ve won and how much money they’ve committed prior to the paddle raiser.
So those are the reasons to keep the live auction first and the paddle raiser second, but there are compelling reasons to switch them up as well.
Yes, people love traditions, but people also love pleasant surprises. So many organizations are looking for new things they can do to shake up their events and make them feel fresh and new again. They try out different themes and different venues trying to find that edge. Well switching up the order of your live auction and paddle raiser is a new strategy that we see more and more organizations deploying. It’s exciting, it’s different and it seems to work. Your live auction items will sell just as well after the paddle raiser as before it.
Unlike the live auction, the paddle raiser includes everyone in the room. So doing it first allows you to get the attention of everyone in the room to raise their [paddles to support your organization. THEN you can do the live auction for that handful of people who actually have the resources and interest in winning your live auction items.
Making this switch keeps the focus on your mission rather than on the live auction items. You first ask people to simply make a donation to your organization. After you’ve sweat every dollar out of that room, THEN you offer up your handful of live auction items – almost like a prize for being a great and generous audience.
Starting bids is another confounding question. Just where should you start the bidding on your live auction items? The answer will vary by audience and event, but in general, I would say that your starting point should be lower than you think.
For example, let’s say you have a consignment vacation package with a $2,500 reserve (that means when you sell it, you have to pay the consignment company $2,500 and you get to keep everything above that). In this example, many charities would say, “We need to start the bidding at $2,500, because that’s our cost. We want to make sure we don’t lose any money on this item.” We say, “That depends.
Here’s how you can “back into” a starting bid price. In a healthy gala auction with good items and an audience that can afford them, your items should sell in 6 to 10 bids. So if you take the estimated selling price and work backward through 6 to 10 bids, it will give you some insight about where you should start the bidding. In this example, let’s say that we expect our vacation package to sell for $4,000.
If we start at $2,500 the bidding might look something like this:
That was only five bids, so $2,500 is too high to start. When you start too high, you immediately exclude most of the audience from the bidding, and the bids you do receive tend to come in very slowly.
The bidders can sense that there isn’t much interest in the item, so they think longer, bid slower, and often pay less.
Starting with a lower opening bid helps build the momentum for that item.
So we would start at $1,000 and have the auction go like this:
In this case, we sold the vacation in 10 bids, and we actually ended up selling it for a little bit more than the previous example. I know what you’re thinking: “Of course you sold it for more than the previous example … YOU’RE writing the examples.” :-) That’s a good point. You’ve got a keen eye. :-)
However, we’ll not just being self-serving. This is a real-life phenomenon. The presence of more bids tends to deliver higher overall prices.
By starting the bidding at a lower amount, we accomplished several things:
So you want to aim for 6 to 10 bids per item. Of course, you will occasionally get an item that will go up to 15 or 18 bids, and that’s okay if it’s one or two items in your auction. It probably just means that you underestimated the ultimate selling price, but you won’t mind the extra time it takes, because you’re making extra money.
However, if all of your items are selling in the 15+ bid range, then you’ve started your price way too low, or your auctioneer’s bidding increments are too small. For example, if you have a trip that you expect to sell for $4,000 that starts at $1,000, the auctioneer should NOT be going up in $100 increments.
We’ve conducted hundreds of charity events, and time and time again we have seen a mistake that is incredibly aggravating to watch as it unfolds, nearly impossible to stop once the wheels are in motion, and can kill a live auction faster than yelling "sold" after the first bid. The mistake?
Inviting a donor on stage to talk about the item they donated.
Now this may not seem like a live auction killer. In fact, you may have a board member who is so eloquent and so well-loved, that when he or she takes the stage, everyone cheers, listens intently and then bids like crazy. We’re not saying that doesn’t exist -- we’re just saying that our experience has shown us that a good result is the exception not the rule.
Here are the top three risk factors
Of course, as we mentioned, there are exceptions. Sometimes the donor does a great job. But on a scale of 1 to 10:
We just don’t think it’s worth the risk when the options are that 10% of the time it’s going to be very impactful, but 90% of the time, it’s going to have little or no impact or be demonstrably bad..
We recommend that you keep the microphone in the hands of professionals, and have the donor provide talking points prior to the auction.
Let your auctioneer put the spotlight on the donor and praise him for his generosity. Just don't put the microphone in the hands of the donor.
One of the greatest tools at your disposal during the live auction is the ability to sell one or two of your items twice. In the example we shared earlier about the Terrell Davis Football that sold twice for $9,500 each, we started off telling the audience that we had just one football. The bidding went up and up and up, and at the last minute, when it was clear that our second bidder was about to drop out, we said, “Actually, we have a second football! Would you both be willing to do $9,500 and we’ll sell this twice?”
Both bidders nodded and raised their paddles, the crowd roared in applause, and we instantly doubled the revenue on that item from $9,500 to $19,000.
This happens most commonly with consignment trips, but you can “sell it twice” when you’ve got two “identical” prizes.
For clarity, the phrase “sell it twice” applies only to those situations in which the audience does not know that you have an identical second item, and the bidders do not discover that until you’re at the end of the bidding and you reveal it just as the second bidder is about to bow out.
You have to be careful with this technique because if you’re too aggressive with it, it can feel pretty abusive to your bidders. We do not want them to feel abused, disrespected, humiliated or taken advantage of.
All of those emotions are possible, because you’re pulling a trick on them, and while you might feel excited about the extra money that you raised, they might feel pretty lousy to be the victims of this trick.
We believe that one of the things you can do to mitigate the feeling of being “tricked” is to not let the bidding run up too high when there are only two bidders left.
Let’s say Bob and Christine are bidding against each other and everyone else dropped out at the $5,000 level, but the two of them are battling back and forth at $5,500, $6,000, $6,500, $7,000 and so on. If you push them all the way to the limit, and Christine is not at $11,000 and Bob, who last bid $10,500 is bowing out, then you spring on them that you can sell it twice, they might feel abused.
They could have each paid $5,500 but instead, they’re each paying $10,500? They would have been smarter to just stop bidding earlier, and this trick would have been revealed earlier.
What we recommend instead is that as long as there are at least three active bidders, it’s okay to keep the bidding going, but once that third bidder drops out and you have only two left, don’t push them all the way to the maximum.
Continue with four or five more bids and then say something like, “Listen, we so appreciate your desire for this item, and we don’t want abuse your generosity. So we’re going to halt the bidding on the price we’re at now, and let you know that we’ve got two of these. Would you both like to buy it at this price?”
Yes, you’re surrendering some of the money you could have made, but you’re preserving your relationship with your bidders. The people who come to your event are your valued supporters, and we don’t want to do anything that makes them feel that they have been taken advantage of.
Another option when you have two of an item is to play the game Auction Chicken, with is explained in detail in Step 22. Once you get down to three or four people left, you can announce that you actually have two of the items, so the final two people will win. That tends to help keep the third and fourth people in the game longer, which drives up the price, and doesn’t create that feeling of being taken advantage of.
IDENTICAL TWINS VS FRATERNAL TWINS
IMPORTANT NOTE: In order to “Sell It Twice” your items must be Identical Twins. They must have all the same features. If your items are Fraternal Twins, meaning they’re similar but not exactly the same, then you can’t use the “Sell it Twice” technique.
For example, let’s say you have a consignment trip for a one-week stay in Cabo San Lucas Mexico. You can probably sell that trip twice because the second trip would be an Identical Twin of the first one. However, if you pair the trip with a set of United Airlines First Class tickets, and you don’t have a second pair of identical plane tickets, then you cannot sell that trip to Mexico twice, because now the packages are Fraternal Twins.
Both winners must receive exactly the same prize.
So how do you sell Fraternal Twins? You do it by announcing at the very beginning of the item that you have two packages that are similar, but not Identical. Therefore, you’re going to auction them off as a “Winner’s Choice” item. The top bidder gets his or her preferred choice, and the second place bidder gets the other package.
Copyright © 2021 TheGalaTeam - All Rights Reserved.