Human psychology factors into fundraising auctions in many ways.
- The fear of loss propels a bidder to bid.
- Smart pricing strategies in a raffle influence how many tickets will be sold.
- Properly structured silent auction bid sheets generate 10% to 30% higher sales.
- Well-written auction donation request letters secure more “yes” responses than “no” responses.
- Using a proper method to properly close a silent auction generates higher sales on the most popular items. (E.G. Create an environment whereby the most popular items can receive additional bids. One example is using extended bidding.)
- Donations in a paddle raiser can dramatically improve when donors give publicly and see others do the same.
But beyond psychology is common sense. Some methods just make more sense than others.
Closing the silent auction before the live auction is a common sense approach to raising more money.
Bidders won’t bid as aggressively or donate as passionately unless they know what they’ve already committed to spending in your silent auction.
When I explained this to a new client, one of the committee members immediately grasped the concept.
“That makes sense,” he said.
He reminded the committee of a puppy the hospital foundation had offered in its live auction two years prior.
“I knew one of the doctor’s bidding on it,” he said, “Afterwards he told me he would have been willing to pay $2000 for the dog, but he wasn’t sure what his silent auction total was going to be. At the time of the live auction, he was winning several items in the silent auction, totaling about $1000. He decided to hold back in the live auction, in case he won all those silent auction items later.”
It turns out that the doctor didn’t win all those silent auction items he’d bid on. He could have bid more on the puppy.
But by the time the silent auction closed, the live auction and paddle raiser were way, way over.
Now one might say, “Well Sherry, what does it matter? Won’t those guests just bid more in the silent auction?”
Yes, many bidders will.
But even with these additional bids, you’ll never make up the donation gap you lost in the live auction or Fund a Need.
Consider that for most charity auctions, the live auction revenue dwarfs the silent auction revenue on an item-by-item basis. Among my client base, it’s not unusual for the sale of 10 live auction items to generate the same total as selling 100-150 silent auction items.
- A silent auction item might sell for an average of $100. Average bid increments might be $10.
- A live auction item might sell for an average of $1200. Average bid increments might be $100.
So yes, a guest who loses a live auction item because he didn’t want to increase his bid by another $100 or more could use that money to bid more aggressively in the silent auction.
But your guest would have to bid multiple times in the silent auction to spend another $100 — and the competition in the silent auction rarely warrants that kind of energetic bidding.
Most likely your guest will win the silent auction item by making two or three additional bids (say, $30), which is considerably less than a singular bid of $100 in the live auction.
Think of it this way: Your silent auction is the appetizer of the event; your live auction is the entree. Let your entree be the star of the show.
When you close your silent auction before the live auction begins, guests know what they’ve already spent and can be prepared to bid or donate more generously in the live auction and Fund a Need.