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November 1, 2007

Bidders/Donors Are Better After Church

By Mark Hrywna
Call it the Sunday Effect: A message with a charitable appeal is more likely to get an online auction bidder to re-bid when they’ve been outbid on a Sunday, but a competitive message is more effective when they’re outbid on a day other than Sunday.

The hypothesis is that Sunday is when most people go to their place of worship, said Deepak Malhotra, assistant professor at Harvard Business School in Cambridge, Mass.

cMarket, a Cambridge, Mass.-based online auction company, presented some more in-depth findings of its data analysis during a New York Regional Users Group meeting in October. Survey data compared bidders who said they go to their place of workshop regularly, versus those who go occasionally, rarely or never. The Sunday Effect holds true for those who go to their place of worship regularly.

If someone has only one other rival bidder, they are 50 percent more likely to bid on the last day of auction, Malhotra said, while if someone has multiple rivals, a charitable message works better, said Malhotra, a member of cMarket’s advisory committee.

Intelligent bid alerts can send charitable messages until the final 48 hours of an auction, when data have shown that competitive messages spur more activity from bidders.

cMarket has analyzed data from almost 3,000 of its online auctions, with more than 1,200 bidders responding to surveys. “We’re only on the 10-yard line, we’re only at beginning of this,” said CEO Jon Carson. Since the auctions are on servers “they’re really measurable,” helping to turn auctions into more of an art than a science. “It’s not magic, it’s a math problem,” he said.

Carson said they learn from clients how to make auctions more effective. Art, particularly high-end art, historically is not a good online auction item because people need to inspect it. The Brooklyn Academy of Music (BAM) offers that opportunity by having a kickoff gala to its online auctions.

In another instance, someone had a Coach handbag donated to an auction and spiked interest even more simply by adding three lottery tickets to the bag. Another best practice learned from clients is to close out up to half of the lower-end items online, before the live auction, leaving the more interesting items in the room, Carson said.

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This article is from NPT Instant Fundraising, a publication of The NonProfit Times.

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