The Danger of Inflated Lot Values

The Danger of Inflated Lot Values

At more than one recent event, I have been handed a catalog with inflated values on the live auction packages. There is an inherent danger in this, as it stretches the boundaries of trust with bidders. The desire to establish a high value for the auction packages one works incredibly hard to obtain is understandable, but extremely high lot values can have a chilling effect on an auction. Especially in this economic climate.

A fundraising auction is in many ways an exercise in building and maintaining trust. Attendees come because they trust they will have a good time. They give you money because they trust you honestly need it and that you’ll do good work with it. You have to trust that your crowd will show up and support you at the level you need.

The latter is probably harder to do, but it is also the most important. It takes a big leap of faith to put yourself out there, to put all of the effort into making the event happen, and to trust that your crowd is going to come support you at the level you need. The moment you start inflating the values of your live auction lots, however, you violate that trust. It seldom pays off.

When the values of a live auction are inflated, a couple of things can happen. At best, people feel priced-out of the auction, and start paying less attention. This is bad because we need everyone to feel like the auction is somewhat inclusive, at least until we do the fund a need.

The worst thing that can happen if you inflate the values is that the audience turns on you, because they think you are being greedy. A few summers back I did an event that was lucky enough to have one of San Francisco’s most wealthy and highly-regarded philanthropists in the crowd. The people putting the event on wanted everyone in the room to rise up to said philanthropist’s level, and insisted on inflating all of my opening bids.

Our opening lot was a winemaker’s dinner for 12 people at a then soon-to-open Winery. At the client’s insistence, we changed the opening bid from $2,000 to $4,000 – thereby also changing the implied value of the lot from $4,000 to $8,000. Ridiculous. And I wasn’t the only person who thought as much.

One of the tables was filled with a bunch of bidders I see at many wine auctions in California and beyond. This crowd comes to spend money at an auction. I could see the looks on their faces immediately change when I announced the opening bid, as they all got pissed off and put their paddles down. That same table of people had spent over $30,000 at an event only two weeks before. That day, they didn’t bid once, not once. They turned on the event and sat on their paddles from the opening bid.

It affects my credibility as your auctioneer, as well. If I’m telling a crowd that the lots are worth X and everyone knows they’re worth less than that, people start to doubt what I say. And when people start to doubt what I say, they start to spend less, ultimately having the exact opposite effect of the original intent. There are many keys to getting people to spend more at a fundraising auction. Simply saying the stuff is worth more than it is isn’t one of them.

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