12 Dec Case Study: How Minds Matter Made 2x ROI with a Live Auction
The auctioneer stopped in the middle of bidding and asked me to come on stage.
The bidding stopped at $2,000 for a 7-night, luxury vacation for 10 to any of Inspirato’s destinations.
It was easily worth over $15,000.
And no one’s hands were going up.
Inspirato’s “Inspired Giving” program required a $6,000 minimum and we weren’t close.
In the audience were executives from the company… watching uncomfortably.
I was Chairman of the Advisory Board for KIPP Colorado Schools so I knew people in the room, but I had never auctioned.
As I started to hype the trip, I must’ve said some inspiring or at least entertaining things, and then it happened:
A hand went up…
“Three-thousand dollars to you” said the auctioneer.
And then another hand. And another. And another.
The bidding ended to a roar of applause and at the end we had sold 6 Inspirato trips and raised $36,000 for KIPP on that single item alone.
After I stepped off stage, a prominent family asked if I could do that for their nonprofit.
And that’s how I became an Accidental Auctioneer.
Fast forward to today. I’m now the board chairman at Minds Matter. Over the 14 years that we’ve been here in Denver, 100% of our graduates have gone to college with scholarships.
We owe A LOT of that achievement to our amazing mentors, but we couldn’t reach that level of success without our live auction fundraisers.
Last year, our live auction generated a 2x ROI compared to the year before and your nonprofit can do the same if you follow some key tactics.
Use this as a roadmap to plan your live auction and discover what it feels like to smash fundraising records, resuscitate your nonprofit’s budget, and leave your crowd inspired.
#1. Define The Experience
You need a live auction experience that gets your audience in the giving mood.
Start by getting your entire committee in the right mindset. Your live auction is not an event. Your live auction is an extravagant experience. Donors don’t get inspired by frugality.
I cover the details on how to crush a fundraiser in a different article — everything from choosing a venue to hiring a DJ — but when it comes to a live auction specifically, you need to start with the planning committee. Everyone in the committee needs to be on board with the live auction because if you screw this up, your fundraiser will lose money.
Once everyone understands this mindset you need to flesh out the specifics inside planning meetings, starting with the stage.
#2. Carefully Set The Stage
The first point I want to make about setting the stage is that the actual stage needs to be elevated so that everybody, whether they’re seated or standing, is looking UP.
The biggest mistake people make with the stage is keeping it at eye level. The crowd is then staring at the back of someone’s head instead of the auctioneer. People tune out when that happens.
Questions to ask at your planning meeting:
- Where’s the stage going to be located?
- How high is it going to be elevated?
- Where are the table sponsors and big donors sitting in relation to the stage?
The last question is really for the auctioneer so they can acknowledge big donors while on stage. They’ll know who to keep their eyes on throughout the live auction.
The Run of Show
The second point about setting the stage has to do with WHO actually gets to be on it. The only people to hit the stage at all Minds Matter live auctions are the emcee (who is also be the event chairperson), the student speakers (the people our nonprofit benefits), and the live auctioneer (that’s me).
Powerful stories inspire donors to give, not your board of directors. Get them off the stage at your live auction.
We removed all of the superfluous commentary from the night and focused exclusively on the people we’re impacting. Minds Matter really wants to nail the testimonial part of the evening so we run 3 to 4 rounds of auditions before selecting the final students. We also provide speech coaching to all of our testimonial speakers. This alone takes 10-15 hours and it’s worth every second.
The speech coaching is a small way we can give back to our student speakers by providing valuable training and on-stage experience….BUUUUUT it’s also a way to increase ROI. Powerful stories inspire donors to continue giving.
#3. Mingle Strategically During Cocktail Hour
The auctioneer should go up to everybody and greet the folks that you know are capable of making significant contributions to the evening.
This builds a rapport between the auctioneer and the donors so when the auctioneer sees these people start to bid, there’s a mutual understanding to continue the bid.
Mingling strategically during cocktail hour isn’t about being deceitful. No one likes that. It means joking around, putting names to faces, and then MAYBE calling people out on stage. Imagine you’re sitting in the audience and I say:
“Oh, James, thank you so much! $2,000 to James. That’s awesome, man. I appreciate you doing that.”
No one goes to a live auction to bid anonymously. At the same time your crowd isn’t expecting any recognition, so they get a jolt of happiness when they do get it.
Sometimes I’ll even look at what donors are wearing and use that on stage. I might say:
“Oh, man. I know you got that fly suit on.You could do an extra five-hundy.”
#4. Limit & Order The Items For Bid
The number of items typically ranges between 5 and 10 items depending on the crowd size. The main point is that you don’t want the auction to drag on, so having the right amount of items is important.
You want 5 to 7 items for a crowd of 150 to 250 people. Anything over 250 people and you want between 7 and 10 items.
Once you have your items, you need to order them correctly. I always look at it from a bell curve perspective. Start with something that everybody can bid on. Something that’s easily accessible, lower cost, and high-value.
The goal is to pick an item that will get everyone’s hand up so they feel more comfortable. Then work your way up the bell curve and bring it back down. Never place a value on any of the items because people will anchor to that number and try to bid below it.
[Hint: Make your auctioneer’s life easier by choosing items that do not have a traditional retail value. If you can buy it at the store, then it’s not suitable for a live auction.]
During the evening you need to display all the auction items on large screens so people know exactly what they’re bidding on, no questions asked. List the items on the programs as well.
#5. Don’t Limit The Drinks
Drinking lowers your crowd’s inhibitions. When your crowd has lower inhibitions, they’re more willing to bid irrationally.
Not to mention their emotions will run a little higher when they get to hear the powerful stories and testimonials of the people your nonprofit is helping.
At Minds Matter we have 3 rules when it comes to the alcohol.
- No drink tickets.
- Open bar.
- Middle-shelf liquor.
#6. Sequence The Evening
This is a no-brainer from a planning perspective, but there are a few ways to order your evening that’ll improve your fundraiser’s ROI. This is what we do at Minds Matter:
- We start with a student speaker. They’ll come on stage and share their story, making it uplifting and inspirational to set the mood.
- Then we move immediately to the live auction.
- The second student speaker comes out after the live auction. This student shares a break-your-heart type of story.
- Keep the students up on stage and ask for the paddle raise. People will want to make more donations at this point because the vibe has changed.
#7. Consider Adding Special Touches
The foolproof formula for killer ROI at live auctions is to get your donors high on emotion and low on inhibition. That’ll whip them into a frenzy and keep the bids coming.
Over the years, I’ve created a “show” that feels more like a concert:
- A custom light-show designed by my friend who does lights for Bruno Mars, Beyonce, and Gaga.
- Sounds effects and beats laid down by my DJ that are impromptu choreographed to what I’m saying.
- Cryo cannons and handguns that go off on cues and ad-hoc.
- Coordinate transitions with the lights and DJ. One example: play DJ Khaled’s “All I Do Is Win” song – just that phrase – once an item is purchased.
- Immediately deliver a bottle of champagne to the person who won the bid. Their entire table will celebrate with them.
A live auction isn’t something you throw together. Your live auction IS the entertainment.
It’s something you plan your entire fundraiser around, so you better do it correctly.
By putting these tools to practice, you’ll inspire your crowd to reach into their wallets a little deeper and finally reach the level of success you’ve been dreaming of.