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.
Just curious as to whether the opposite is true. If people see what they bid in the silent section and are disturbed at their spending so don’t spend more in the Live. It seems from your logic and experience this leans the other way but wanted to get your thoughts.
Sherry Truhlar says
No, I haven’t seen that.
I’m not sure I can explain this concept well in writing, but it’s also is good to keep the idea of competition in mind.
* Silent auction items can appeal to 80% of the bidders.
* Live auction items are generally pulling action from 10-20% of the bidders.
Because there’s more competition in the silent, odds are that the item will go home with any number of guests (up to 80% of the crowd) versus the live auction items (which are likely to go home with 10-20% of the crowd). But of course, guests don’t really think through the odds. Instead, heading into the live auction, they think, “I’m the lead bid on 20 items. That’s $XXXX! I can’t bid in the live!”
(In reality, it would be unlikely that they’d win all the items because the competition is greater in the silent auction. But they won’t know for sure until the silent closes. So your “most valuable” 10-20% deep-pocket spenders are more likely to play it safe when they bid in the live, and that’s not what you want.)
Silent auction average sales are (say) $120 per item and live auction item sales are 10x that, a 10-20% bidder would have to win dozens of silent auction items to affect his bidding in the live auction.
The issue with closing the silent AFTER the live is just that he doesn’t know. It’s the unknown factor that dampens the live.
Betti Adams says
This does make sense and we have used that logic in our Online/Silent/Live Auction hybrid that we do every year. But we have a question that comes up. Is it improper to take an item from the Silent Auction that has only had minimal bids INTO the Live Auction? Is it unfair to the high bidder in the Silent Auction who thought their bid was the highest?
Thanks for all the wonderful information that we have gotten and continue to get from your website, blog, etc.
Sherry Truhlar says
When a commercial retailer has an item that no one buys, they put it on sale to get rid of it. Usually it’s stuck on a clearance rack at the back of the store. The Store Manager does NOT showcase the unpopular item in the front window, thinking it will tempt more people to enter the store.
So why should you?
In short … no, I’m not a fan of pulling unpopular, low-bid silent auction items into the live auction in order to sell them. In effect, it’s saying, “This item is so bad! But we’re going to reward the donor of it anyway. We’re going to take this donation that isn’t so great and highlight it in our live auction. Oh sure, we received better things that *could* have gone into the live auction. But instead, we’re going to take 3 minutes of your time to tell you about something you already saw and rejected … because we think it should sell for more. You just need to hear about it again.”
Sure, there are exceptions. Concert tickets that are donated late in the procurement cycle, aren’t pre-marketed, and get “buried” in the silent auction. Maybe it’s a nice donation with a confusing or poor display. With a FEW, RARE exceptions, you could take an item from the silent and put it into the live. But it would be exceedingly rare.