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INTRODUCTION

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!!

STEP 1: IS YOUR EVENT THE RIGHT “TYPE” TO HOST A 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:

  • A FUND-RAISER
  • A FRIEND-RAISER
  • A FUND-PRAISER
  • A FUN-RAISER

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.

FUND-raiser

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.

VERDICT: A Fund-raiser is a great candidate for a live auction.


FRIEND-raiser

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.

VERDICT: A Friend-raiser is a poor candidate for a live auction.


FUN-raiser

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.

VERDICT: A Fun-raiser is a poor candidate for a live auction.


Fund-PRAISER

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.

VERDICT: A Fund-Praiser is a great candidate for a live auction.

STEP 2: TWO MUST-HAVES FOR A SUCCESSFUL LIVE AUCTION

Okay, you’re hosting a Fund-raiser or a Fund-Praiser, so the second test of whether a live auction will do well in your event determines the mealtime of the event and whether it’s an event that will attract just one spouse or both spouses together.

DINNER

As a general rule, A dinner event is the best time to host a live auction. Sometimes organizations will add a live auction to a breakfast or lunch event, but those early meals are typically not the best opportunities for a great live auction. Why is that? The answer may surprise you, because it’s counter-intuitive.

The answer: Significant Others.

When you host a dinner, you will probably get a lot of couples to attend. When you host a breakfast or lunch, you’re likely to get just one spouse or the other, but not both. With a breakfast or lunch, your guests are coming before or during work, and they come by themselves. To really raise money, you need couples.


SIGNIFICANT OTHERS

Even in this day and age, there is a sexist meme that is still alive in fundraising circles that suggests that if you gather up a group of wives with their husbands’ credit cards, you’ll raise a lot of money. Or if you get a bunch of husbands away from their wives (e.g. a golf tournament) that they’ll spend a lot more money than they would if their wives were sitting next to them.

Our experience shows that this is not true. The reality is that if I go to an event and spend more than $1,000 without first consulting my wife, I’m going to be in trouble. She’s going to feel disrespected and disregarded. We both work very hard, and we make our big financial decisions together. Neither of us has free reign to just go out and spend a lot of money without consulting the other partner. So anytime I look at an audience and I see a lot of unattached people, I anticipate that our live auction items probably won’t sell for as much as they would if we had spouses sitting next to each other.

In fact, the next time you attend a fundraising gala, watch the bidders closely. When the dollar amount is low, people just raise their paddles quickly with little thought and little conversation. But as the dollar amount gets higher, watch the eye contact, the whispered words and the body language between the couples who are bidding.

There is a whole conversation happening between bids, and when one of them signals “No Mas” with a gentle shake of the head the bidding stops. That’s the reality. If you want to make money with a live auction, you need to host events that will bring both spouses into the decision

STEP 3: RECOGNIZE THAT YOUR GALA IS A “FUNDRAISER” NOTA LIQUIDATION EVENT

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
  • WHOLESALE PRICE DISCOVERY

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.

STEP 4: THE RIGHT ITEMS

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.

STEP 5: HOW MANY LIVE AUCTION ITEMS SHOULD YOU HAVE?

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.

Here is a video explaining this devastating consequence.

 

STEP 6: CHOOSE ITEMS THAT ARE THE PROPER “SIZE”

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.

STEP 7: FIVE ITEMS YOUR GALA LIVE AUCTION MUST HAVE

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.

VACATIONS

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

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:

  • HOTEL ROOM - One or two nights at a trendy hotel
  • DINNER - Gift Certificate for dinner at a nice steakhouse
  • SHOW - Tickets to see a popular play or other performance
  • MASSAGE - Couples massage at a spa either in the hotel or very near the hotel

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.


CATERED DINNER PARTY

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 desireable 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.


A YEAR OF DATE NIGHTS

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.


TOTALLY UNIQUE EXPERIENCES

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:

  • DINNER WITH A LOCAL CELEBRITY
  • RESERVED PARKING IN FRONT OF THE SCHOOL
  • SIDELINE PASSES FOR A FOOTBALL GAME
  • BASEBALL LESSONS FOR YOUR KID FROM A LOCAL PRO PLAYER ETC.

STEP 8: PUT YOUR LIVE AUCTION ITEMS IN THE PROPER ORDER

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.

BLOG: Why the order of your live auction items matters

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STEP 9: RETAIL VALUES SHOULD NOT BE REVEALED

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:

  • 4 TICKETS IN A SUITE AT A DENVER BRONCOS FOOTBALL GAME
  • VALET PARKING
  • PRE-GAME FIELD PASSES TO GET AN UP-CLOSE VIEW OF THE PLAYERS
  • POST-GAME DINNER WITH RANDY GRADISHAR, A MEMBER OF THE BRONCOS RING OF FAME.

What’s the retail value of this package? vYou 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.

  • Those suites are sold out, and all the tickets are owned by corporations, who use them as rewards for their employees or to wine and dine their clients. They’re impossible to purchase, so even though they have a price printed on them, that price is not indicative of their actual value. They’re literally priceless, because they’re unobtainable unless you have a connection to that corporation.
  • The pregame field passes are not for sale. There is no market in which you can purchase them. You can only get them if the Broncos donate them to a charity and you purchase them during a fundraising auction.
  • Now we get to the dinner, which obviously has a knowable price tag for the food and drinks, but how would your winning bidders get access to Randy Gradishar to sit and chat with him about their favorite Broncos memories?

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.

VIDEO: Retail Values - Do they help or hurt your live auction

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STEP 10: THE RETAIL EXCEPTION

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.

VIDEO: When you SHOULD publish the retail values of your live auction items

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STEP 11: THE PROPER SPOT IN THE TIMELINE

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:

  • The silent auction (which is a passive ask) isn’t getting as much action as we thought, so let’s extend the cocktail hour by an extra 15 minutes to give people more time to bid.
  • We need to have our Executive Director speak, followed by a Board Member, followed by a Service Provider, followed by a Recipient of our Services, followed by a Video about our mission, followed by our keynote speaker, and THEN we’ll do the live auction.
  • We’re going to have a 50-minute break in the program for dinner to make sure everyone gets served, and all the plates get cleared, and everyone has a chance to socialize at their tables before we intrude on them with the live auction.

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:

  • People’s bladders are full, so they need to head out to the restrooms
  • Smokers need to go outside and smoke.
  • The slight buzz from the cocktail hour is starting to fade and some people in the audience are feeling a little yucky
  • Parents start thinking about getting home to release their babysitters.
  • It’s been a long day, and general fatigue is starting to settle in.

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.

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STEP 12: CARVE OUT THE PROPER AMOUNT OF TIME FOR YOUR LIVE AUCTION

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.

STEP 13: WHAT SHOULD COME FIRST – THE LIVE AUCTION ORTHE PADDLE RAISER?

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:

TRADITION

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.


IT WARMS UP THE AUDIENCE

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


IT RESOLVES SPENDING QUESTIONS

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.

  • For example, let’s say you have a couple who attends your event, and they were planning to spend $10,000 between the live auction and the paddle raiser. There’s a trip to Mexico they’d like to win, and they’re willing to pay up to $5,000 for it, and then they’ll donate $5,000 in the paddle raiser.
  • If the auction is first, and it only cost them $4,000 to win the Mexico trip, they may increase their paddle raiser contribution to $6,000. So overall, your organization received $10,000 from them.
  • But what if the paddle raiser is first? What if they want to contribute $5,000 during the paddle raiser, but they’re worried that they might need $6,000 to win the Mexico trip. So they only donate $4,000 in the paddle raiser, then during the live auction they end up winning the Mexico trip for $4,000. All of a sudden, your organization has lost out on $2,000 because the paddle raiser happened before the other spending questions were resolved.

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.


IT BUCKS TRADITION

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.


IT CAPTURES ALL OF THE AUDIENCE

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.


IT PUTS THE FOCUS ON YOUR MISSION

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.

STEP 14: STARTING BIDS

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:

  • 1. Somebody start us off at $2,500 … we’ve got $2,500
  • 2. Now $3,000
  • 3. Now $3,500
  • 4. Now $4,000 … $4,000 … $4,000 … how about $3,750? got it!
  • 5. Now $4,000
  • 6. Now $4,250 … $4,250 … $4,250 … We’ve got $4,000 going once, going twice...all in all done? Sold for $4,000.

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:

  • 1. Somebody start us off at $1,000 … we’ve got $1,000
  • 2. Now $1,500
  • 3. Now $2,000
  • 4. Now $2,500
  • 5. Now $3,000
  • 6. Now $3,500 … $3,500 … $3,500 … how about $3,250? got it!
  • 7. Now $3,500
  • 8. Now $3,750
  • 9. Now $4,000
  • 10. Now $4,250 ….
  • 11. Now $4,500 … $4,500 …. $4,500 … We’ve got $4,250 going once, going twice … all in all done? Sold for $4,250.

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:

  • We included more of the audience in the auction.

  • We may get 10 or 12 paddles in the air at the initial $1,000 level, which is a lot of interest and a lot of positive momentum.

  • The auctioneer will quickly go from $1,000 to $1,500 to $2,000 to $2,500 … so you’ll get to the reserve price typically in the first 5 to 8 seconds of bidding.

  • The speed and pace of the bidding creates energy that helps propel your item along. The higher level bidders think faster, raise their paddles faster and the item sells faster.

  • Finally, your winning bidders get the satisfaction of capturing something that everyone else wanted. Your top bidders are often competitive people in life. They’re successful in a wide array of industries, and they enjoy competing and winning. So when there’s a lot of bidding on an item, and they emerge as the winner, that’s a very satisfying feeling for them.

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.

STEP 15: SHOULD YOU INVITE THE DONOR OF A LIVE AUCTION ITEM ON STAGE TO DESCRIBE IT?

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

  • LACK OF PREPARATION: The donor is not a professional speaker. He generally will underestimate the need to prepare. He owns the house he's donating, knows how much fun it is to vacation there, knows about all the local eateries and activities, so, he plans to just get up and tell people about it. Such lack of preparation nearly always means that the donor goes on longer than is necessary and includes too many details.

    As Mark Twain famously stated, "If I'd had more time, I would have written a shorter letter." Brevity is the result of preparation.

  • ALCOHOL: Your gala is a social event. Your donor is a social person. Plus your donor knows that he has to give a speech in front of a big audience, so he has a couple of drinks just to settle his nerves.

    QUESTION: Does alcohol make people less talkative? QUESTION: Does alcohol cause people to eliminate extraneous details from their stories?

    It’s risky to put the microphone into the hands of someone who came to your event to have a good time and is having a good time.

  • EMOTIONAL ATTACHMENT: The donor of the item is often too emotionally tied to the item. After he introduces the item, he stays on the stage, and if the bidding isn’t as high as he’s expecting, he grabs the mic again and offers more incentives or persuasion to get people to bid. The whole auction slows down and turns it into a beg-a-thon. If this happens, your whole auction may die.

Of course, as we mentioned, there are exceptions. Sometimes the donor does a great job. But on a scale of 1 to 10:

  • We’ve occasionally seen someone who was a 9 or 10. They lit up the room and the item went great because of them. That’s maybe 10% of the time
  • Most of the time (say 60%), the donor is a 5, 6 or 7. Not much impact, but not any harm.
  • Sometimes (say 30%), the donor is a 4 or lower, and the impact can range from an audience that’s slightly annoyed to an audience that’s downright hostile.

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.

STEP 16: SELLING IT TWICE … INSTANTLY DOUBLING YOUR MONEY!

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.

 

STEP 17: CONCIERGE SERVICE FOR YOUR WINNERS

Most of the charities we work with use a professional company to do their check-in, check-out, silent auction and bidder recording for the live auction and paddle raiser. The top organizations in Denver (where we’re headquartered) are GiveSmart, Auction Event Services (AES) and Bolder Events. One of the things these groups do that is super effective -- they give concierge service to the winning bidders.

When a live auction item is sold, they send one of their team members with an iPad to the winner’s table. They get the winner’s name and address, swipe a credit card and handle the checkout on that item on the spot. This is great service for your winners, because it saves them from having to stand in line to pay at the end of the night. Plus, it allows you to lock in that sale. Sometimes, if you don’t collect the money immediately, the winner may start to have second thoughts and may decide that he or she doesn’t actually want the item.

They might walk out of the event at the end of the night without paying. Then you’re put in the position of hounding them after the event to try to collect. That’s a miserable situation. So avoid that by using a concierge model to collect the money immediately when that item is sold.

STEP 18: DON’T MAKE IMPROMPTU ADDITIONS TO YOUR LIVE AUCTION

You should strongly resist the urge to add impromptu items to your live auction during your event.

Here’s the typical scenario:  The live auction is going gangbusters.  All the items are selling for great prices. The audience is really into the rhythm and flow. Then the development director come up to the stage to whisper to the auctioneer that there are a few silent auction items that didn’t get bids so we should try to sell them in the live auction.

That’s a terrible idea!!

The audience has already told you through their actions in the silent auction that they were not interested in those items. Don’t make it worse by putting these unpopular into the live auction, and begging for someone to take them.

When you add silent auction items to your live auction, you typically go from selling items for $2,000 each to selling items for $200 each. It’s a downer on the overall mood of the event, and it drains the patience of your audience.

Or maybe you have a donor who offered up a package at the last minute and wants to include it in the live auction. You should carefully evaluate that package.

  • Will it sell for an amount that is worthy of your live auction?
  • Is it an easy package to understand, and will the audience know what it is?
  • Do you already have too many items in your live auction? With this addition tax the audience’s attention span and cause you to raise less money in your paddle raiser?

 It’s tempting to always say “yes” to these last-minute donations, because you think “well we CAN make more money by doing this.” But you have to think carefully to ensure that you’re not accidentally sabotaging your live auction or turning off your audience.

We recommend that you develop a plan for your live auction and then stick with that plan. Don’t add things at the last minute, unless they are really special and a perfect fit for your event and your audience.

STEP 19: ALL LIVE AUCTION ITEMS ARE NOT CREATED EQUAL

We believe it was Thomas Jefferson who (sort of) said, “We hold these truths to be self-evident: that all Live Auction Items are NOT created equal; that they are NOT endowed by their Creator with universal appeal to the audience; that among the qualities that diminish their appeal are they’re too personal, too subjective and/or too unusual.

Works of Art and jewelry tend to be pretty binary -- they either go like gangbusters or they perform terribly. There is very little middle ground on these items. You might have a year in which a piece of art or jewelry was the absolute best thing in your live auction. You had two people who were in love with the item, and they both were wealthy enough to go deep, so it was the highest selling item in your live auction.

The next year, you come back with another piece of art or jewelry, thinking that it’s going to go great again, and you’re mortified when it struggles to get an opening bid and then gets just one or two bids before selling for a fraction of its value. And worse still is that the artist or the donor of the jewelry is in the audience watching this disaster unfold. What just happened? This is the reality of Art and Jewelry.

They are such high-risk items, that you should never put them into your live auction unless you are absolutely positive that you’ve got a least two people in the audience who are in love with that item and you are absolutely positive that they will bid on that item.

Obviously, this rule doesn’t apply if you’re hosting an art auction or a jewelry auction. But here’s an interesting truth that will apply at most events -- unique, subjective items like art and jewelry will do just as well in the silent auction as they will in the live auction. These items rely on two people being passionate, and if you have those two people, they’ll duke it out in the silent auction. That way you raise the money without having to endure the risk of the item bonking in the live auction.

STEP 20: GAME PLAN FOR PREDICTABLE PROBLEMS

Even in the best of circumstances, you will sometimes have things that go wrong during the live auction that you didn’t expect. An item will get zero bids, or it will sell for a high price, but the winning bidder will disappear or it will sell, but the winner later says, “I don’t want it.”

What do you do when these things happen?

The good news is that most of these things are predictable risks and you can plan in advance how you will handle them if they happen.

NO OPENING BID

Let’s say that an item does not even get an opening bid?

In the normal auctioneering world where items are up for liquidation or wholesale price discovery [See Step 3], the auctioneer would simply lower the starting bid until someone bit. It might look like this:

  • Someone start us off at $1,000 … $1,000? ... $1,000? … how about $500? … $500? … $500? .. how about $250?

But in your fundraising auction, you may be selling a consignment trip with a reserve of $2,500, and your auctioneer is starting at $1,000 just to get the bidding started, but he or she isn’t going to sell it for less than $2,500.

If the audience won’t even make an opening bid of $1,000 on this trip, it’s better to just pull it and move on.

We recommend saying “Okay, we’re going to pull this item for now, and we may come back to it later in the auction.”

You just want to gracefully exit the item without making a big deal about it.

WINNING BIDDER DISAPPEARS

This is something that happens periodically. People at a benefit auction are not always paying close attention. They’re drinking and socializing and sometimes they bid as a joke or completely by accident. They’re telling a story, gesturing with their hands and because they have their bidder number in their hands, the auctioneer sees it as a bid.

Then the auctioneer says, “Sold for $5,000!” and they win the item. When your recorders go to them for the Concierge Service [See Step 17] to get their payment method, they say that they didn’t bid and they don’t want the item.

If your auctioneer is aware of this before moving on, there are two possible responses:

  • 2ND PLACE BIDDER - The auctioneer should go back to the second place bidder and say, “Sir, your last bid was $4,500, are you still in at that price?” Hopefully, the answer is yes. But since the auctioneer has already said “Sold” to someone else at $5,000, that $4,500 bid is no longer binding.
  • START OVER - If the second place bidder doesn’t want to stick with his or her bid, the auctioneer should just start over. Offer the item up again and start from scratch.

We recently did an event in Denver where a Broncos VIP package sold for $12,500, but the winner refused to raise his paddle to confirm the purchase. When the Concierge Service recorder went to the table the winner said that he hadn’t meant to bid. So the auctioneer went back to the $10,000 bidder, but he didn’t want to stick with his bid.

So we started over. Went back to $5,000 and worked our way back up. The item ended up selling for $13,000, which was $500 better than the original.

WINNING BIDDER RENEGES

What do you do when there is lively bidding on an item, and it sells for $10,000. The concierge service recorder goes to them to gather their information, and they give their contact info, but they say they want to be invoiced for the purchase rather than putting it on a credit card. No problem.

Then later, the person reneges on the purchase and says, “I don’t want the item.”

In the best case scenario, they renege before the live auction is over, and you can alert the auctioneer and resell the item immediately. It stinks to have to do that, but it’s a blessing that you have the opportunity to put it up for auction again.

In the worst case scenario, they renege on the item the next day or the next week, when you have no opportunity to sell the item again. In that case, you probably have to speak with your attorney to understand what your options are.

You should probably try to negotiate some type of donation from the person.

We’re not sure that you would actually want to sue one of your bidders. If this person is a regular supporter, then you don’t want to ruin the relationship, or if this person is a close friend of one of your regular supporters, you may not want to ruin that relationship.

STEP 21: NO BEG-A-THONS

You never want your live auction to turn into a beg-a-thon, where your auctioneer is on the stage begging futilely for people to bid. It is shockingly easy for a live auction to fall into beg-a-thon mode.

Here’s how it happens:

You’ve got an item that you expect to sell for $5,000, but after starting at $1,000, the auction has stalled out at $2,500. So now the auctioneer is on the stage saying: “We’ve got $2,500 … how about $3,000? … $3,000? … anyone want to go to $3,000?”

Then a board member comes onto the stage, takes the mic and starts explaining how great this item is and why someone should bid on it.

Then the auctioneer continues begging for someone to bid $3,000 or even $2,750, but the audience isn’t responding.

Don’t do this. Don’t beg the audience to bid on an item that they’re clearly not interested in. Maybe you thought it would sell for more, but when the audience is telling you that they’re not interested, you have to accept that and move on.

We believe that the auctioneer needs to read the mood of the bidders, and if a bidder is talking to her husband and is clearly considering a decision, then it’s okay to stall on stage and wait for them. However, when the bidders are making it clear that they’re done bidding, sell the item.

When you do this, you’re training the audience that you’re not going to wait for them. If they want to bid, they should bid quickly. They should not expect that you’re going to slow down the whole event to wait for them to make up their minds.

The auctioneer is basically playing the “Marco Polo” game that kids play in swimming pools. Every time the auctioneer asks for a bid, he’s effectively saying, “Marco” and every bid is the audience saying, “Polo”. When the audience stops bidding, the auctioneer should sell the item.

It’s as simple as that.

No beg-a-thons.

In the best-case scenario, they renege before the live auction is over, and you can alert the auctioneer and resell the item immediately. It stinks to have to do that, but it’s a blessing that you have the opportunity to put it up for auction again.

In the worst case scenario, they renege on the item the next day or the next week, when you have no opportunity to sell the item again. In that case, you probably have to speak with your attorney to understand what your options are.

You should probably try to negotiate some type of donation from the person.

We’re not sure that you would actually want to sue one of your bidders. If this person is a regular supporter, then you don’t want to ruin the relationship, or if this person is a close friend of one of your regular supporters, you may not want to ruin that relationship.

STEP 22: AUCTION GAMES TO ENGAGE THE AUDIENCE

There are a few live auction games that you can play with your audience to get everyone involved. As we’ve noted earlier, only a tiny percentage of your audience can actually afford to win a live auction item, so auction games allow far more people to participate.

HEADS OR TAILS

This is a simple game that is easy to explain and easy to play.

Basically, your audience members contribute a price that you’ve determined (usually $25, $50 or $100), and they’re in the game to try to win a prize. It could be something that has broad appeal like a staycation, airline tickets or tickets to a sporting event. Or it could be cash -- $250, $500, $1,000.

Everyone is on their feet at the start of the game, and the auctioneer instructs them to choose “Heads” or “Tails”. They indicate heads by putting a hand on their head. They indicate tails by putting a hand on their tail.

The auctioneer flips the coin. Everyone who chose correctly stays standing, everyone who got it wrong, sits down. The auctioneer continues in this fashion until one person wins the game.

AUCTION CHICKEN

Auction Chicken is a game that has the ability to sell items for much more than they would make during a regular live auction item. In the example we shared earlier of the two Terrell Davis footballs that sold for $9,500 each, they vehicle for selling them was the Auction Chicken game.

A normal live auction item is an opt-in event. Nearly everyone in the audience is “out” of the game, but they can raise their paddle to put themselves into the game. Auction Chicken is powerful, because it’s an “opt-out” game. Everyone in the audience is automatically “in” the game, and they have to take an action to opt out.

There’s something about the psychology of this game that really increases values.

Here is how it’s played:

The auctioneer asks everyone to get on their feet because they’re all in the game. The cost of the prize is just $1. We’re going to slowly raise the price and when you hear a price you “wouldn’t” pay, you sit down. It becomes a game of chicken at the end because the last person standing buys the prize at the last prize.

Then we say, “Okay, the cost of this prize is $1, … now it’s $100 … now $200 … now $300 … etc. until we get a winner.

THE LAST BIDDER GAME

The last bidder game is another good way to raise money, but it’s definitely the most complex of the three games listed here.

Here’s how the game is played:

You select a prize that everyone is bidding on, and you tell them that the cost of that prize is $50. The prize will be sold to the person who bids “last”, but every time bidders raise their paddles they’re going to be charged another $50.

Eventually, the last person to place a bid will win the item.

We do this game periodically, but we don’t love it, and don’t recommend it for everyone, because it has some negatives.

  • THE BIDDERS ARE CONFUSED - The Auctioneer must be extremely clear in explaining that “every” time the auctioneer reads off their bidder numbers,, they’ll be charged another $50. One of the challenges people have with this game, is that they don’t understand that if they raise their paddle 10 times during the game, they’re committed to paying $500 at checkout.
    • This can lead to some contentious conversations at the check-out table when a bidder says, “What do you mean I’m being charged $500 for the last bidder game? I wasn’t the last bidder! I didn’t win that item.”
    • The auctioneer must make sure that everyone understands the rules.
  • IT’S DIFFICULT TO END - The Last-Bidder game can be tough to end. From the start, the auctioneer needs to be saying, “Bidder # 346 … going once … going twice … Bidder # 273 … going once … going twice … Bidder # 622 … going once … going twice …” And so on … and so on
    • The auctioneer has to be counting it down pretty much from the start. But as long as people keep raising their paddles, the game can go on.
    • Eventually, the auctioneer needs to count it down faster and faster and not leave so much space for new bidders to get in.
    • The actual end can feel unfair to bidders who have committed hundreds of dollars to the game.

That potential for unfairness is the reason we don’t “love” this game, but we recognize that it can be an effective fundraising vehicle. As long as the auctioneer clearly explains that every bid counts, whether you win or not.

STEP 23: DETAILS TO SHARE ABOUT YOUR LIVE AUCTION ITEMS

One of the important skills to develop for selling live auction items is knowing how to describe the items properly. Some groups go way too far, providing far too many details, and others are a way to light on details and aren’t giving bidders a clear understanding of what they can win, and what the restrictions are.

There’s nothing worse for your nonprofit than auctioning off a vacation to Mexico for $7,500, but when the winner tries to book the trip, they discover they can’t use it at Christmas or New Year’s or Spring Break, or any other time that’s convenient for them. Instead, they learn that the trip is restricted to the off-season months.

That’s disappointing for them and puts your nonprofit in a bad position. They will feel that you tricked them, and if they paid for an item during your live auction then they are among the higher net worth people in your audience, which means they’re probably one of your important supporters, or they’re closely connected to one of your important supporters.

You want to lead off with one sentence of flowery description and then get into the basics of the package.

  • How many nights is the vacation?
  • Where is it? (what country, what city, what resort)
  • What type of unit is it? (# of bedrooms, bathroom and how many people it sleeps.
  • A one-sentence description (at most, two sentences) of things to do in the area
  • Is airfare included?
  • What are the restrictions? (e.g. not available during x weeks, pets are not allowed, travel is not included).

You want to cover the basics, but don’t go overboard. You don’t need to list every appliance in the kitchen or every activity available on the resort or in the town.

STEP 24: BE CAREFUL ABOUT BOOZE

If we had a nickel for every time someone suggested that the key to a great live auction is encouraging people to drink a lot, we’d have about $12.35. :-)

We’ve seen enough auctions to recognize that booze is not the answer. Yes, it’s good for people to have a drink in them. Both physiologically and psychologically, when people are trying to relax and have fun, a drink in their hand helps them relax, even before they take the first sip. So a drink or two is okay.

But there are two major things to consider:  The first is the ethics of your organization. You work in the nonprofit world, where you’re diligently solving problems to make people’s lives better every day. It would be inconsistent with your identity as an organization to take advantage of someone who was inebriated.

The second consideration is the reality that drunk people can wreak havoc on your live auction. We believe that any donor who is obviously intoxicated should not be bidding without the approval of a sober person in their party.

For example, we did a major fundraising gala a few years ago in which a woman in one of the front tables was clearly drunk. Even from the stage, the auctioneer could tell that she was like a caricature of a drunk person -- glassy eyes, laughing too loudly, talking too loudly, unsteady in her chair, etc. -- but she was also a major bidder in the auction who raised her paddle to bid for most of the items.

At one point the auctioneer said, “It looks like you’ve had a few drinks, so we don’t want to take advantage of you, and have you bid more than you’re comfortable bidding. Sir, are you her husband? Will you confirm that you approve this bid? Okay, wonderful, we’re at $2,500 … now  can we get $3,000?”

And each time she bid, the auctioneer would look again to the husband for confirmation. By doing that, the auctioneer ensured that she was not being taken advantage of just because she was drunk.

Her bidding clearly helped the auction, but she also talked a lot. She kept yelling out to the auctioneer, “Hey! … Hey! …. I’ve got a question.”

The auctioneer would stop, listen to her question, answer it, and then continue. She definitely extended the length of the auction and slowed everything down.

She’s one example, but we’ve seen dozens of instances in which drunk people just create too much noise, too much distraction and too much chaos during the live auction.

The other problem that you’re going to encounter with people who drink too much is that when they wake up the next morning, they might not remember exactly what they did, or they might regret what they did. So when you try to collect the money for the item(s) they purchased, the say, “I didn’t mean to do that. I was drunk, and I did not mean to purchase this trip. I don’t want it.”

Then you’re in a tough spot.

So the strategy for achieving your live auction goals should not rest on having an open bar and hoping that people will drink too much.

STEP 25: DECIDE WHETHER YOU WANT A FAST-TALKING AUCTIONEER OR AN AUCTIONEER WHO SPEAKS NORMALLY

The first thing we’ll tell about this topic is that we are biased.

We prefer auctioneers who speak like regular people, and don’t have a fast auctioneer’s chant.

However, despite our bias, we recognize that determining whether you need a traditional fast-talking auctioneer or a more modern normal-talking auctioneer depends on the type of event you’re hosting, the atmosphere you’re trying to create and what your audience prefers.

Some groups absolutely love the cowboy auctioneer who’s wearing a cowboy hat, tuxedo jacket with blue jeans and boots and has a smooth rhythmic chant and a crew of ring men working the room screaming “Yep!” … “Hey!” ….

There’s an energy a crew like that brings into the room, and a well-oiled auctioneering team can be a marvel to watch.

That is absolutely the right fit for some events.

On the other side of the coin are auctioneers who speak at a regular speed, say normal things and do not use an auction chant.

a sober person in their party.

Here’s where our bias shows up. We’ve been to many auction fundraising events with fast-talking auctioneers, and we believe that while the chant from the auctioneer and the hollering from the ringmen is exciting and interesting at first, we believe that excitement and interest fades in the first few minutes and most of the audience simply checks out.

They don’t understand what’s happening, aren’t sure what the auctioneer is saying, and keeping track of it becomes a chore rather than a form of entertainment. So they chat with their neighbors, go get a drink at the bar, visit the restroom, get on their phones, etc. but they are not paying the slightest attention to what’s happening on the stage.

We’ve also seen that bidders can be very confused by the fast-talking auctioneer. Can you imagine how intimidated you would feel if you went to a cattle auction to buy cattle, or an auto auction to buy used cars? You’d be standing in a crowd of professional buyers, trying to keep up with what the auctioneer is saying, trying to recognize when he has accepted your bid and trying to know where the bidding is and where you stand in the bidding at all times. It would be extremely intimidating and confusing.

We think that same intimidation and confusion exists when that cattle or auto auctioneer comes to your gala and starts his or her fast-talking patter on the stage.

We believe that benefit auctions are primarily social gatherings. People will be drinking and socializing with their friends, taking selfies, checking their Facebook and Instagram, sitting at round tables that guarantee roughly a quarter of the audience will have its back turned to the stage.

In this environment, speaking clearly and at regular speed is important to helping the bidders understand where they are, keeping the audience engaged and ensuring that the crowd is still in the room ready to participate in the paddle raiser.

STEP 26: DO YOU WANT TO WORK WITH A TEAM THAT ALREADY KNOWS HOW TO EXPERTLY EXECUTE THESE STEPS?

At The Gala Team, we are experts at all of the Steps listed in this document. We have helped hundreds of nonprofits make adjustments to their live auctions that have produced thousands and sometimes tens of thousands of extra dollars of fundraising revenue. 

Meet the Auctioneers

 

Helpful Resources

Experts Share their Fundraising Secrets
Experts Share their Fundraising Secrets
Read
26 Steps to Your Best Live Auction
26 Steps to Your Best Live Auction
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Record Breaking Paddle Raiser Guide
Record Breaking Paddle Raiser Guide
Read
Crank Up the Volume Silent Auction Guide
Crank Up the Volume Silent Auction Guide
Read

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