Do You REALLY Make Money from the Highest Bidder?
March 07, 2016
(NOTE: On occasion, we love reaching out to our friends and partners in the non-profit fundraising world to find out what they’re thinking about when it comes to helping charities raise the most money possible. This week, auctioneer and SocialSmarts founder Corinne Gregory tells us how activity, not deep pockets, drives auction fundraising. Enjoy!)
If you’ve ever been to an auction – and I’m assuming since you are reading this, you are already a veteran of at least one event -- you are aware that the “high bidder” is the one the auctioneer sells the item to when the bidding has concluded. So, it’s natural to believe that the “high bidder” is the one who is making the money for the charity during a Live or Silent Auction.
Well, folks, let me be the one to break it to you: It isn’t true! Yet so many charities covet the “high bidders” because they truly believe that these individuals are going to make “more” for the cause. Even most auctioneers will work particularly hard on getting to the “high bidder” because they feel this is where their energies should be focused. And that may be costing you money and not making you more as you would expect.
First of all, there is a common misconception that, in order to make more money at your event, you need to invite more people with high net-worth. While it would seem to make sense that people with more money will be prime targets to spend more and be your “high bidders,” frequently the opposite is true. When people have ample discretionary income, they tend to buy things that they want as it comes along. They aren’t going to wait around and save up just to “buy” at your auction. That’s not to say that these individuals aren’t generous or won’t contribute to your auction’s bottom line, but they aren’t going to be the ones generating the most bid activity.
So then, if the people at the top of your buying pyramid aren’t going to be the ones generating the most bids, who is going to help you make more money? The answer is simple, really: “everyone else.” Activity is where the money is.
Why is activity so important? Well, although we do collect money from the “high bidder,” each time someone puts their bid number down on a Silent Auction form or raises their Bid Card during the Live Auction they are raising more money for the charity. The second, third and fourth high bidders are helping raise the price of that item. Ultimately, the high bidder is the one who is determined to hang in there and out-bid the competition. So, as I like to say to my auction audience, “It’s the job of the second, third and fourth high bidders to make sure that the winner pays appropriately!”
So, if we are “making money” from any and all bidders that participate, it’s crucial to have audience engagement. We want them all to bid -- more bid cards in the air means the revenue to the charity increases. That means, as an auctioneer, I need to be courting the second and third high bidders, giving them permission to stay in the game, and not just focusing on one or two potential high bidders. In fact, I coach my audience, letting them know they can “play along” all they want -- be my second and third high bidders all night long. But, if they don’t actually want the item, they should pull their cards down before I say “Sold!”
So, remember, while we do ultimately collect the money from the high bidder, we make money from every guest that places a higher bid on a Silent Auction form or raises their bid card during the Live Auction. It’s important to keep your entire audience engaged and interacting because, even if they don’t win, their participation ensures that the charity does.
(Big thanks to Corinne Gregory for sharing her insights with us this week! For more information about her, go to auctionhelp.com