Tag : fiduciary-responsibility

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161: 5 Ways Fiduciary Responsibility Guides Auction Advertising

I touch only one part of the auction process: the advertising campaign. So, I’m not someone to consult regarding human resources, bidding software, legal technicalities, facility selection, or bid calling techniques.

I used to think that terms like “fiduciary responsibility” belonged to the part of the auction process that happen away from my office. I know better now.

Cornell University Law School’s Legal Information Institute posted this summary of fiduciary responsibility:

“A fiduciary duty is a legal duty to act solely in another party’s interests. Parties owing this duty are called fiduciaries. The individuals to whom they owe a duty are called principals. Fiduciaries may not profit from their relationship with their principals unless they have the principals’ express informed consent. They also have a duty to avoid any conflicts of interest between themselves and their principals or between their principals and the fiduciaries’ other clients. A fiduciary duty is the strictest duty of care recognized by the US legal system.”

In the auction business, this duty means that we exclusively attempt to achieve the highest possible sale price for our sellers’ assets or at least the highest net financial gain for them. Some auctioneers might assert that this responsibility would also include doing all of the above in the shortest time possible.

Fiduciary duty doesn’t run on altruism, and that’s okay. The higher the asset selling price, the more commission auctioneers typically make. Almost everyone in our culture understands that both the asset owners and the commissioned sales representatives benefit from transactions.

This responsibility influences a lot of the advertising choices that auctioneers make every week. Budgeting decisions, media choices, and even design order can determine whether we as marketers are holding up our end of the fiduciary duty deal.

Pursue the right bidders, not necessarily the most bidders.

In the world of auctions, “something for everyone” probably isn’t even true; but it definitely should’t be the clarion call in our advertising. Getting a lot of spectators or even bidders should not be the goal of our advertising. The goal should be to entice the most motivated buyers. It can be more expensive to chase the most qualified and best-matched buyers, but it’s in our sellers’ best interest for us to take that approach.

Sell our sellers’ assets, not our events.

Does our advertising sell our auction or its assets? A good way to tell where your emphasis lies is by what is mentioned first, most, or largest. It’s not 50/50, either. In the vast majority of situations, the asset should cover far more space in an advertisement than content related to the event. We’re trying to sell the asset. In most cases, consumers will participate in our event only if they want the assets in it.

Sell our sellers’ asset, not our brand or marketplace.

If our logo is at the top of our advertising, we’re putting our needs and wants ahead of our duty to our sellers. When an ad from Amazon or other online retailer shows up in our browser margin, its content is dominated by the asset (or asset category) for sale and not by its source. All these retailers using tracking pixels know you’ll click the link only if you want what’s in the picture or headline—neither of which typically include the name of the store.

Make it as easy as possible for buyers to buy.

The easier it is for buyers to bid, the more likely it is that they’ll bid and continue bidding. So, the easier we make it to bid, the more competition can happen; and the higher sale prices can go. It’s our responsibility as marketers to pursue the most diverse ways and the most convenient times for consumers to place bids—stopping just short of that pursuit encroaching on our sellers’ bottom lines. All auctioneers should be moving toward enabling bids to be placed immediately after a consumer sees an ad, even if it’s just a pre-bid. “Buy now” and “bid now” prove to be powerful calls to action, especially in social media.

Leverage the most effective and efficient advertising possible.

Unless an auction company is using the advertising budget as a secondary revenue stream, our goals typically align pretty easily with our sellers’ hopes on this one. The challenge comes in knowing the best places to advertise as well as the best content to use for various asset categories. We should be constantly experimenting with a portion of our advertising budgets, and explaining to our sellers that this is a “paying forward” strategy that costs all sellers but also benefits all sellers. We should also be consistently measuring and recording the results of both our proven techniques and our experiments to know what is most efficient. It’s a never-ending process, as the media and cultural landscapes continually change.

Whether “fiduciary duty” can be found in our auction contract or not, it is always in our best interest to conduct business as if it is. That decision filter will lead us to make decisions that may not be easy but will be the right thing to do. Some of those decisions will be in our marketing plan.

Stock image purchase from iStockPhoto.com
Editing assistance by Gillian Zimmerman.

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2 Reasons Why You Shouldn’t Use “Auction” in Your Headlines

Every year, the percentage of retail transactions that occur online versus in a brick-and-mortar rises.

If you’ve ever purchased anything online, you know that most of those transactions started with a search engine. So, if we’re selling assets—especially if we’re selling them online—it makes since to discover how people are searching for what they want to buy.

Google gives this information away for free. Anyone can type in any term and see its use over time.

This interactive graph from Google Trends shows the proportional use of five search terms related to online purchases.

If you’ve been in the auction business for any length of time, this might hurt your ego. Worse, it might give you pangs of regret for how you’ve advertised your assets for the past decade.

At the most recent iteration of the Auction Technology Specialist course, one of my fellow instructors asked a room full of auction professionals what they would type into Google to buy a Ford F-150. Not a single one of the 28 industry insiders suggested the word “auction.” He wasn’t picking on them. I don’t type “auction” into a search bar, either, unless I’m researching something for a talk or blog post.

So, if a room full of auction people don’t search for auctions, why would we expect the buying public—many of whom don’t have experience with the auction process or positive associations for the word “auction”—to look for auctions? Sure, there’s a small community of folks who frequent auctions and regularly participate in them; but that quantity pales in comparison to just the people who’ve visited a Walmart this week.

If we want to claim that auction brings true market value, then we need to bring the full market to our sellers’ assets. To bring the full market, we’re going to need to adapt to two truths:

  • People don’t search for auctions. They search for assets.
  • People don’t buy auctions. They buy assets.

Our advertising headlines and subject lines and supporting text needs to focus on the assets being sold. While the marketing vehicle of an auction does connote important information the buyer needs to know, that buyer doesn’t care about those realities until they want what’s being sold. If we have only a few seconds to capture attention and then call to action, it would make sense to focus on what’s important to the buyer. Our fiduciary responsibility to our seller is to sell their assets, not our events.

My guess—and I don’t think it’s possible to acquire more than anecdotal data on this—is that more people search for just the asset in question with none of the words in the Google Trends graph shown above. Buyers might use descriptive terms, product categories, concrete attributes, or brand names; but they’re starting with the asset in some way.

I work with auctioneers who have removed the word “auction” from everything in their advertising except their URL and terms. That might be too extreme for you. (It’s not for me.)  It’s not hiding reality or being ashamed of auctions. It’s not deceit. It’s adaption.  

We can advertise auctions. Or we can sell assets.

Knowing is Half the Battle

Stock image purchased from iStockPhoto.com