In this economy, one strategy to help you maintain a strong overall sale value of a party is by splitting up the value among many bidders. Here’s how it works.
Remember the adage, “The whole is greater than the sum of its parts?” For example, a house is more valuable than the individual pieces of sheetrock, bricks, and carpeting so the whole (the house) is greater than the sum of each individual item (the construction materials). On the flipside, sometimes the parts are greater than the whole. For instance, when a corporation sells off a division of its company, perhaps that segment of business has been identified as holding more valuable to someone else than it does to the business itself.
At your annual auction, consider the potential of the latter. You may find that you are able to raise more money selling something in “parts” or “pieces” than you can if you offer the whole. For example, a common auction item is a themed party donated by a family. One of my clients has a well-known family donate a fun house party each year. Recently the theme swirled around the glamour of an Emmy party. The entire night was laid out to take advantage of the theme with a long red carpet rolled out to meet guests at the driveway, a pseudo paparazzi with press and screaming fans greeting guests as they emerged from their vehicles, and a Hollywood worthy menu complete with champagne toasts.
There were two options for selling tickets to this party. One option was to allow sell it to one person who could then invite 50 people (that is, selling it by the sum). The second option was to sell 25 couples a pair of tickets (i.e., selling it by the parts). The hosts indicated the donation value was $2000, or $40 a person for the night’s entertainment.
To earn at least the value of the party, the auction needed one bidder to pay $2000 or 25 couples to pay $80. An $80 investment per couple for this particular group seemed modest. The committee thought that a couple would easily pay $100 or $125 for that experience, but it was unlikely that any one person would pay $2000 for the entire party. That committee knew their audience. Twenty-five couples paid $100 per couple netting $2500 for the Emmy party.
For maximum revenue, the committee opted to break the party apart – selling 25 pairs of tickets to the party instead of selling one party – in order to sell it.
In your part of the world, a $10 or $20 ticket price might be more reasonable, so don’t focus on the specific pricing from my client. Ticket prices for this type of experience will vary widely depending on your location. Yet the process of “selling the parts instead of the whole” works in every location.
As your auction committee brings in donations and packages items, see where you can apply the strategy to sell parts versus the whole. You’ll find opportunities to generate more revenue while tapping more supporters to your cause!
About the Author: Sherry works with volunteer auction chairs who want to plan their most successful charity auction yet. In addition to offering the auctioneer “fast talk,” she works with clients nationally to teach them the tricks of auction procurement, audience development and marketing. She regularly provides advice and tips for charity auctions on her blog at RedAppleAuctions.com/blog.