BiddingForGood Gives 7 Reasons the 100 Year Old Silent Auction Model Reduces Fundraising Outcomes
How the internet eliminates all of them
Cambridge, Mass., March 22, 2010 —BiddingForGood, the leading platform for online fundraising auction events announces 7 reasons why the 100 year old silent auction model is migrating to the web to eliminate inherent inefficiencies and invite an entirely new audience of cause-minded consumers to participate in this growing $16 billion marketplace.
The 7 Inefficiencies of Silent Auctions;
1. Non attendees, typically 70% of a constituency, cant (and don't) bid
2. Suppressed competition - clipboards don't exactly follow you around a room when you have been outbid
3. Can the ending be any more awkward? Many bidders are reluctant to be aggressive enough to fight it to the bitter end, thus leaving money on the table
4. Social distractions suppress bidding. Would a professional auctioneer really hold an auction in the middle of a party? Note; in recognition of this issue most galas effectively stop the party for the "live" auction. Why? Because they intuitively know a non-distracted bidder = more bidding= more dollars.
5. Many attendees are put off by being forced to "fight the crowd" which suppresses bidding. In focus groups women are especially vocal on this topic
6. Item performance data is not tracked and stored so that next year's committee has a solid handle on what items to go get. Losing bidder contact information is not kept
7. The minimal (unmeasured) marketing value to item donors means less items in a increasingly competitive item acquisition environment
According to Jon Carson, CEO of BiddingForGood, "Silent auctions put a number of dampers on bidding and by limiting bidding with artificial time and place constraints of the event many constituents are simply unable to bid." Carson adds, "These bidders are often affluent consumers who have real purchasing power who can help drive up the price of any number of items."
One of the key behavioral drivers of auctions is "competitive arousal". This win at all costs is alive and well in a live auction, but suppressed in the silent auction format. Fighting the crowd, the awkward ending, social distractions- these all serve to suppress bidding competition. Deepak Malhotra, a professor of negotiation who studies the psychology of bidding behavior at the Harvard Business School has noted, "The online environment has a number of attributes that can stimulate competitive arousal (e.g., instant bid alerts) that in-room silent auctions simply don't have."
In addition, item performance data is not tracked and kept and logistical issues inherent to the silent auction model can be overwhelming. "Try managing 15 silent auction volunteers, lugging 150 items into a room, setting them up, taking unsold items back to the office late at night, and dealing with long checkout lines - it isn't easy", says Judi Elkin, a seasoned fundraiser and former Executive Director of the New England chapter of the American Liver Foundation.
The Power of the Internet; Now contrast this with the efficiencies that putting a silent auction online can bring.
1. 100% of donors can bid from anywhere 24 x 7 (more bids = more money)
2. No fighting the crowd. No awkward ending. (more competition = more money)
3. Item donors get added and measureable marketing exposure in a competitive economy giving them one more reason to donate (more items = more money)
4. Online sponsorships offer existing sponsors more marketing value, or an upgrade opportunity for more/better items (= more money)
5. All bidding data is organized into reports, compared with other like organizations, and stored for next time
6. Constituents can email the auction to friends and family expanding the bidding pool
7. email addresses of winning AND losing bidders can be stored for next year
In the years ahead, nonprofit fundraisers will need the very best fundraising toolbox possible and an online auction fundraiser will increasingly be a standard tool in that toolbox. The e-commerce trend is too strong and the advantages vs. inefficiencies of online vs. silent too obvious.
Conclusion; Over time most silent auctions in whole, or in part, are going to be held online.
BiddingForGood is the leading cause-related e-commerce platform connecting consumers and marketers to non-profit fundraising auction events. Online auctions powered by BiddingForGood have generated over $100 million for non-profit organizations by allowing them to expand their bidder universe and access a new source of items. Clients can secure more items by delivering a stronger and more measureable marketing value to item donors to ultimately raise more money from more participants as well as BiddingForGood's donated item program. The company works with dozens of brand marketers through a unique product advertising program to enable them to efficiently reach affluent donors just as they are spending in a trusted environment. This cause marketplace can be experienced at www.BiddingForGood.com.