207: Have The Easier Hard Conversation With Your Sellers
The single greatest irony of my job is my advocacy for analytics.
First, you’d think my clients would be the ones pushing to know if my advertising works and what aspect of it is working. They’re not. Only about five to maybe ten percent of my clients track their signs, direct mail, and newspaper efficacy with separate URLs. Some of the ones that do implement such tracking use URLs longer than the name of their business. So, it’s easier for the interested party to Google the business rather than use the tracking URL.
Second, I make a significant percentage of my income each year on media that my clients don’t know whether or not is effective. Because they don’t know whether it’s working or not, neither do I. For job security, you’d think I’d want that ignorance to continue. I kinda do, but that’d be shortsighted.
This is going to sound heretical, but hear me out. Auctioneers still get stuff sold, but sold isn’t a complete metric. What if it could’ve sold for more? What if you spent a large chunk of your budget on ineffective media, when that money could’ve been spent somewhere that would’ve brought more bidders to the table? (We all know more bidders usually equates to higher sale prices.)
From talking to my clients, I know that auctioneers sometimes face uncomfortable post-sale conversations with their sellers because they aren’t having tough pre-sale conversations with their sellers. When absolute auctions bomb and when bidding in reserve auctions doesn’t meet the minimum, the question is always, “Did we do enough to market this auction?” or “How many bidders weren’t here that could’ve been?”
Nobody will ever be able to answer those questions, but high sale results can keep sellers from asking their auctioneers those questions. Those superlative sales results will also convince future sellers that the auction method can be trusted. If we want fewer interrogations by current sellers and more sales contracts from future sellers, we need our advertising hitting on all cylinders for every auction.
Recently, I ribbed one of my auction buddies, a long-time client. He had spent the large majority of his budget on newspaper ads, which across the country right now cost auctioneers anywhere from 50 to 900 times per website visit as Facebook advertising. I looked down at thousands of dollars devoted to a medium he wasn’t tracking and thought about the thousands—maybe tens of thousands—of prospective buyers I could’ve pushed to his website with that spend on Facebook, where tracking is built in.
He told me he had to spend that money there because his seller was elderly and believed in newspapers. I get that line of thought, but elderly people don’t want to waste money any more than younger adults do. The seller would’ve been appalled to know she had thrown thousands of dollars at inefficient media. She never knew that media was less effective, because the auctioneer couldn’t prove it. I’m not picking on my friend, because to be fair, neither could most of the auction industry—even though this kind of tracking typically costs less then $50 per year.
I’m not sure most auctioneers want to learn that they’ve been wasting their money or their seller’s money, either. It’s apparently more comfortable having tough post-auction conversations than finding out how they’ve been underserving their sellers (probably for years). It’s easier to have “what if” thoughts instead of generating a report to show the cost per bidder (or buyer) acquired via each medium used.
I’m not discounting the challenge of convincing gray-haired sellers or first-generation auction company owners that several years’ worth of analytics trump their assumptions from the 1980’s. That’s stout work, for sure. Concrete, objective statistics change the nature of those conversations, though. Instead of opinion vs. opinion, it’s opinion vs facts.
I’m also not saying dump newspaper or any medium completely. I’m not saying to double your sign size or spend all of your money on Google or Facebook. I’m not saying postcards are always better than brochures. What I recommend is continually—for the rest of your existence as an auction company—testing and tracking your media to know what works for what assets in what geographic areas. Sometimes, inefficient media brings in your biggest buyers. Other times, you need tens of thousands of cheap website visitors to get enough bidders to sell the asset(s) at hand. You can’t throw everything at every auction. So, you have to determine your best advertising options for each scenario.
You can show that older client or sale manager a suggested budget with the media you recommend and let them pay extra for their assumptions. Or you can present them with media in order of efficiency and let them have line-item veto power over what media you’ll purchase on their behalf. By contrast, your data might show them (and you) that some of your less-efficient media bring the best bidders.
Sellers hire you as an expert—not in talking fast but in getting unique, luxury, distressed, difficult, or diverse assets sold. Prove your expertise. Have the easier hard conversation, but have it with data in hand.
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