BiddingForGood's Suggestion - Shift Your Focus
This week is all about shifting the ol’ vantage point a bit. I’d like to build on the most recent post by my [very tall] colleague, Thomas. He explored how a non-profit could benefit from behaving more like a for-profit business. Non-profits often get the short end of the stick when this conversation comes up. I’m not suggesting a drastic overhaul of the non-profit model…there are tons of non-profits out there that can teach a for-profit company a thing or two (or two hundred). Forbes Magazine agrees. I’m talking about looking at your non-profit auction through a different lens.
Today’s lens: simple logic and economics. There are two major concepts that I think a non-profit running an auction can take advantage of: segmentation and supply/demand.
Whenever I hear “segmentation”, I’m reminded of how my fiancée believes that her stomach is segmented into compartments for dessert (90%) and everything else (10%), but that’s not quite what I mean. In fact, we’ve talked about this…here.
The main point of the above post was identifying the different groups that make up your community and then using that information to identify auction items and potential donors that will perform well! (Basically, if you have a group of middle-income preschool families attending your event, they probably aren’t springing for the $7,000 trip to Paris).
That brings us to supply and demand. Remember this guy from Microeconomics? Of course you do. When I talk to people about BiddingForGood they sometimes ask, “Can I limit my auction to only my community?” The answer I give is, “You certainly can.” I then ask a simple question, “What is the purpose of running this auction?” The answer is always something along the lines of “To raise money for our cause, you silly goose.” (Maybe I added the last part, but I can hear it in their tone). I save them the economics lecture, but we then talk about if the object is to raise money for this cause, it benefits you to have as many people as possible looking at your items. More people equals more demand. And as you can see here (I’m walking up to the chalkboard and emphatically drawing the dotted line) when you increase the demand, your prices are going to go up. It is literally Economics 101. (It might have been 102 when I took it, I can’t remember).
This concept is far from mindboggling. You don’t need a Nobel laureate sitting at your committee table to help you figure out the benefits here. I would say 80% of the people I speak with who are looking for more money out of the auction know that "get more bidders" is one of the levers they can pull to make that happen but are not quite sure how to do it.
Happy curve shifting.