My master class in procurement (Big Ticket Procurement Secrets) launched last week. We started the 3-week intensive discussing how psychology can be used to improve your auction revenues. Here is an excerpt from that first class.
When considering the auction procurement process and the number of silent auction items needed to hit your goal, it’s impossible to do much without first understanding human behavior. Let’s look at both your behavior and your guests’ behavior.
The natural behavior of you — the procurement chair — is to procure as many items as possible. The typical mentality is that “the more I procure on behalf of my charity, the more we will raise.” You have an innate desire to cast your procurement net wide, hoping to secure many donations. This is a chronic problem with schools in particular, but most groups, to a degree.
Ironically, the natural behavior of your guest is to bid less when your auction has more items. Isn’t that interesting!? Guests will bid and spend more when you offer less.
This concept relates to the economic principle of scarcity. In high school economics, you might have studied supply and demand. This is that principle manifesting in your event. (And you thought you’d never use economics in real life.)
Many people vying for a few things will yield you more money than offering many items and having only a few people available to buy them. When you cast the procurement net wide and have many items in relation to the crowd size, you are fostering a yard sale mentality. Guests perceive the opportunity to get a deal. This is the exact opposite culture of what we are trying to foster in a benefit auction.
If you have a problem with guests thinking your auction is a ‘place to get a deal’ instead of ‘a place to contribute to the cause,’ it often correlates to the number of items you are offering. You’re setting up a conflicting culture and then complaining about your guests’ behavior. When someone walks into your auction and sees fewer items, they experience scarcity. In this case, the scarcity improves demand for your items, thereby raising prices.
To create scarcity, you have two paths of action. You can either limit the number of your silent auction items or expand your audience.
Expanding the audience is much harder than limiting your offerings. In addition, expanding the guest count often falls outside the realm of the procurement chair. In some nonprofits, the gala chair is responsible for filling the seats at the event, whereas the auction chair is responsible for getting items to sell. Therefore, it’s up to the auction chair (or procurement chair, depending on your terminology and roles) to limit the number of items in relation to the guest count.
In my current Big Ticket Procurement Secrets course, we talk about the first option: creating scarcity by limiting your offerings. To learn how to do this and implement several other psychological-based tactics into your auction, enroll in Big Ticket Procurement Secrets today.