auctions

S.2 Episode 3 Live Auction Tricks that Actually Work

Tell us a little bit about you, how does someone get started?

Most people that become an auctioneer grow up in the business. All the auctioneers that work for us, most of them have a family member that was involved. My dad became an auctioneer in 1978 and I had no plans to go into the business. I went to Wilmer high school graduated, went to Hamline University and have a degree in communications. I was working for WCCO tv in college and out of college.

Then my dad had a heart attack and a stroke. He had a stroke the morning of my wedding. I left my job at WCCO and went back to our family business. My dad wanted my sisters and I to go to auction school, the World Wide College of Auctioneering in Mason City Iowa. We all went there, I went in 1994 and in college, I started doing these events when I was 19. I had no money I was living in St. Paul. People found out this kid in Drew Hall at Hamline University had his license. I was 20 years old and I was doing little events to raise money. By the time I graduated from college I was doing 30 of these a year in the early 2000’s. Then it went from 30 to 50 to 90 to 150 and today this year our company will do 300 all over the country.

You fell into it in a way?

I did fall into it. I will tell you a fair amount of growth and success we’ve had is a little bit of God given but also who we are. You have to have a heart for non profits to be successful in this. You have to care about why this is important to the community. You have to care about what it will do for people. It is hard to be successful at what I do if you stand on a stage in front of 1000 people and don’t have empathy for what your raising money for.

Yes you have to be excited about the vause or you can’t do your best job.

The business today is so different than what it was 5 years ago and 10 years ago. The audience can sense if your not authentic. They can sense if you’re there for a paycheck. They can sense if you haven’t done your homework. You can’t just be standing on the stage going through the motions. I tell the auctioneers that work for us all the time is the real key is can you build a bond with the audience. You are building a bond and they are saying I trust this person cares I know what the money is going for. Today, the two portions were involved with, the live auction being one and the fund to need giving moment being the second portion. The second portion is raising 80% of the revenue. I tell people, if I’m on an airplane and somebody asks what I do for a living, my lead answer is I own a company that consults and advises and facilitates giving moments for non profits. So much of the revenue is from people pledging financial support, not me auctioning items.

Maybe you can speak more to someone who doesn’t understand the difference between the live auction and fund to need?

I wouldn’t be here today if the fund to need hasn’t’ grown to what it is. About 20 years ago in the industry, people would do the events, raffles, silent auctions. They identified there are so many people in the room that don’t win or don’t care if they get the wine basket. You have to create an opportunity for guests to pledge financial support. That’s the moment where the MC or auctioneer stands up and makes a case why you should donate to the mission of the organization and people pledge financial support. For those of you listening, if you don’t remember anything I say remember this, do a fund to need and focus 90% of your energy on mission based giving where people can pledge financial support. I think years from now it is absolutely the future and direction of fundraising. It is the total key. The big thing now is a lot of people are not driven by buying something, they don’t care. They’d rather write a check to build wells than purchasing a night on the town.

We have been talking about the shift in millenials and how different the mindset is of giving.

Before the end of the show I will highlight there still are live auction items that are selling really well. There is one interesting that’s happened, last year congress made some tax changes on the deductions you can make. We have seen an uptick in people spending money in live auctions because now there’s a limit to how much you can donate to a non profit to have a tax consequence. Dinners are the best, in home dinner with a chef is the best item, and how we’ll sell those things for $7,000-$15,0000. Some people are wanting to give 15 thousand but in this case I’m giving and getting a dinner.

To your point about millenials, the big change that we’re seeing with younger people aging into the marketplace, this is probably the second most important piece I’m observing right now in the business. 15 years ago this business is about seen to be seen dress to the nines, what is the new hot ice raffle bar etc. What’s the new trick and gimmicka?  The new change is millenials want to think and feel this is important. It’s not what’s the hot new thing, people still like to be entertained, the biggest thing for younger donors is, is there there behind it.

Sometimes people show up to have a party and it’s hard to weave mission and fundraising in that.

Not only is it hard but sadly, the planners have miscalculated what they’ve created has put downward pressure on the fundraising environment. They’ve actually created an environment that is more difficult to raise money because they believe it should have been about a party or something unique or cool.  My wife, when we were dating, she’d come and sit down, I’m going night after night, she’d sit down and in the first 20 minutes she would say I totally get it, I get why this is important. She wouldn’t know about the organization but based off the opening the show, how they communicated she would know. There were other nights where she would sit for an hour and say, I don’t get why people care. The mindset of the donor changes throughout the night.

When people come to these events you can tell the ones that came because they wanted a party vs the ones that are there to have fun, but they are there for the cause. I want to get back to the statement about how the planners can make it more difficult to raise money. What are things they can do to make it easier?

We now know, on any given saturday night that we will raise more money at 8:20 than 9:05. You will raise a significant more money, they are more engaged there mindset is more clear, their buzz is a little bit better. It is significantly easier to raise money earlier. Timing is a really big thing, the time at night. One of the greatest mistakes you canmake is getting into your fundraising too late.

The second big thing is it has to be mission focused. Does it really make a personal connection about why this is important. Design your showflow so it leads in right before the fund to need, are they sitting in their seats and are they able to say I get it. There has to be clarity in messaging as well. A lot of event planners will set it up but do not connect the dots on what it means and what it will do.  Talk to people in advance see the momentum donors. When I am standing on stage and trying to raise money, 99 times out of 100 when I am asking for a large sum I know one or two people will give. They are called seeded or momentum gifts. If you don’t have that in place, people don’t want to be the first one to raise their cards, but after 2 or 3 people do it they’d be happy to do it. You have to alter the mindset, if 2 or 3 people give 25 thousand dollars there’s 600 people sitting in the room and they think more about there donation. Create the perception there is organic enthusiasm around what you are raising money for.

The program length is critical, tell me what’s the perfect program like?

Almost everyday we get a call from a new perspective client. I’m handling these calls and I’ll tell people now, we will roughly know how you will do three days before your event. After we look through the shoflo, we know who is in a more tricky spot and whos going to be in a great spot. The right length of the program, if you can make it about an hour and fifteen minutes I think that is helpful, that’s assuming a fifteen – twenty minute break for dinner. You have to build in time for the live auction, air on the side of caution.

How many items for a live auction?

It depends, it’s changed, the short answer is fewer today is better. There are nights now where we are doing two or three items because the fund to need has grown, it is rare in the midwest to see events with other 500 people with more than 9 live auction items. A general answer would be someplace 4-7 live auction items depending on the size and history of your event.

Often times we will raise more money with fewer items. You’re not creating competition within itself for the items, and the environment and energy around the live auction is usually higher. The other thing we are evaluating is if the fund to need giving moment is coming after the live auction, I’m looking at how much money and energy is there in the room, because those two items are contingent on eachother.

You’ll laugh when I say this, there are so many nights that I walk out and think, why did people ever hire me when I was 23 years old?  In the moment, the decision you are making and experience helps, you have to be intuitive and thoughtful, you have to be data driven. In the moment many clients don’t realize the choices and decisions the auctioneer makes makes a $7500 difference in the moment.

The other piece, if you ask me aside from mission based giving and fund to need, if I said where’s this business at five years from now, I would say it’s not based on just how much money we raise night after night. That’s a big mind shift. It’s a shift about how we are thinking about this. We also have to make decisions based on how to keep donors more active and involved and keep those relationships strong regardless of the financial gift they make that night. The big thing is the auctioneers I hire, they have to be mission focused, look at the big picture, and they have to make people feel valued and appreciated. It can not be driven by did we top last year’s financial goal. Now there are so many non profits, the real question is can you keep your donors longer than anybody else. It can’t be a revenue equation, it has to be a relationship equation that is built on trust, accountability, communication, and authenticity.

The other thing that surprises you over the years, there’s nights where somebodies giving $100 and maybe that’s all they can give or used to giving. Then six months later they will gift a farm to them. Sometimes these relationships that are based on a $100 gift, the long term upside to sincerity and thankfulness is a big deal.  

I’ve seen some of your tricks, what tricks do you have?

When you have a double item you can sell twice, it’s super helpful. A lot of committees don’t understand how complex and in the moment that is for the auctioneer. A lot of times when I am doing that I can’t sell that second dinner unless I’m at x amount for an example. Then I have to get both of these people and keep them both with me. As they are bidding you have to gauge their interest. You have to stop before you lose the second person. It’s a lot of dynamics and in the moment.

A really helpful trick or experience is, so much of the value of these items has nothing to do with the item, it’s the relationship around the item.

How should an auctioneer be charging for their services?

Some charge a flat rate or a commission fee. A flat fee is better in the nonprofit world. I don’t want people to think we are giving different advice based on our compensation. The fees across the country vary, and they’ll change. A lot of auctioneers will prorate their fee based on their revenue. I also tell folks whether they hire us or somebody else, I encourage them to grill the auctioneer before they hire. If you spend a half hour asking the tough questions you’ll figure out who the right fit for you are. You should interview a couple two or three. The challenge depending on the size of your event, we schedule a year or two out so you have to be really on top of that.

Meeting Minds by EideCom