In last week's post, we discussed a simple yet often overlooked principle of fundraising auctions: analyzing the different spending tiers of bidders at your event.
Today we share 4 practical steps to use this information by customizing your live auction with top tier spenders in mind.
- Set Live Auction Goals
- Determine the Distribution of Guests' Spending Capacity
- Procure Top- and Mid-Tier Items
- "Double Up" and Sell Multiples
Gaining a deep understanding of your audience, then applying it to the auction, is a game-changer for many organizations - and a surefire way to bust through any fundraising plateau.
Step 1: Set Goals
The first step to reaching a goal is setting one. If your auction committee is not yet goal-oriented, it's time to change that.
"Sometimes first-time organizations will tell me, 'Well, of course we don't have a goal—we haven't had a live auction yet'," shares benefit auctioneer Heath Hale of Cowboy Auctioneers and recent Winspire webinar guest. "These folks are operating under the 'take what you can get' mentality."
Even if it's your first auction out of the gate, you'll need a goal that guides the entire planning and procurement process.
"When I begin prospecting a potential client, my very first questions are: What’s your venue? How many people will attend? And, most importantly, what is your goal and how do you expect to get there?
"I can tell almost immediately if they’re going to reach or exceed that goal," Hale says.
Indeed, understanding your goals and creating a plan to reach them, is a must-have conversation between your organization and benefit auctioneer.
Step 2: Determine the Distribution of Guests' Spending Capacity
It's common for auction chairs to want as many people as possible participating in the live auction. After all, who wouldn't want every guest to be engaged, having fun and supporting the cause?
But in the case of the live auction, having too many people participate - and win - can actually stunt fundraising.
The reason: Your packages need to be valuable enough to feed the top tier spenders. And the very best should only be purchased by the few people in the room with the greatest giving capacity. For more on this important topic, see...
Step 3: Procure Top- and Mid-Tier Items
Customizing the live auction to meet your top spenders' giving capacities is critical to reaching your goals.
To properly 'feed' top-tier bidders, you need top-tier items. These are the 2 or 3 most exciting, whiz-bang and over-the-top items you can procure, with target bids that specifically address the top tier's spending propensity.
Top-tier items are typically exclusive and unique experiences - think group dinners, lengthy or far-off vacations, private meet-and-greets, backstage tours and the like. These are buzzworthy items everyone wants and can start bidding on, but only the top tier of spenders can survive.
While any item in a live auction should be premium, valuable and highly sought after, these items are directly targeted to the top 5%'s budget and interests.
(For timing reasons, we usually recommend including about 7 to 12 items total in the live auction; this figure can go up or down based on audience size. This allows your benefit auctioneer to facilitate the live auction in under an hour, keeping donor energy levels up and respect everyone's time.)
Next in line are mid-tier items: items that are just one step below those exciting, once-in-a-lifetime excursions. These could be travel packages with shorter flights, wine trips, red-hot sporting or entertainment tickets and more.
Let's say your goal for the live auction is $100,000, and your top tier of spenders is 20 couples who can spend between $5,000 to $7,000.
One strategy would be to procure 12 or 13 items that can bring in $5,000 to $7,000. To maximize fundraising, you can double or triple sell the most popular items - more on this in Step 4.
Now let's say your live auction goal is still $100,000, but your top tier of spenders is five couples who can spend $10,000 to $15,000. This will completely change your approach to procurement! Now it's smarter to focus on getting three great $15,000 packages for those five spenders to fight over.
Then you can procure a handful of $7,000 to $10,000 packages for your middle tier of spenders.
The middle tier is where no-risk travel packages like Winspire shine. The majority of our trips are priced in a typical mid-tier price range, so you can mark up the packages and still receive a significant return.
In the example above, this strategy allows the charity to exceed their goal in just 7 to 8 packages. The timeline is shorter, and the audience is happier.
After the middle tier is lower-value items geared toward the remaining 75% of your auction attendees: everybody else who might participate in the live auction but won’t win anything. Instead they’ll be focused on the silent auction, raffle and fund-a-need.
Step 4. "Double Up" and Sell Multiples
The "double up" technique refers to the practice of selling one item to multiple interested bidders. This is key for the middle-tier packages where, by definition, there are more bidders vying for these lower-priced (but still premium!) items.
Nearly all Winspire packages can be sold limitless times. When the auctioneer is able to create a bidding frenzy over, say, tickets and a meet-and-greet with cast members of Broadway'sHamilton—then sell the same package several times to multiple interested couples - this is often the highlight of a fundraising event. (And yes, this has happened several times before!)
Bottom line: "Any organization hosting a benefit auction should know their top tier," Hale says. "I analyze their goals. I analyze their top tier of spenders. And then I recommend building the live auction in terms of how many over-the-top packages and middle tier packages we should have."
"Double Up" Webinar: Watch On-Demand
Want to learn the latest techniques and insider secrets for selling items multiple times? Check out our free webinar all about easy strategies to amplify event revenue with multiple sales.
Whether you're facilitating the auction or would like some background when discussing with your benefit auctioneer, this is a must-see for anyone planning a live auction.