Recipe for Record-Breaking Results

Understanding your Guest Demographics

Understanding your guests WHY.  Why they attend your event; why they’re committed to your organization; and why are familiar with your mission, programs and population is the first step in determining why they will part with their disposable income level on your behalf.

Click here for a cheat sheet on generational behaviors.

The 50/50 Principle

The first concept to grasp, is that in most audiences there are two types of individuals. The first type will support you at special appeal or paddle raise with their hard-earned cash because they believe in your organization, they are moved by your mission, and are confident that the dollars they gift will be allocated for the best use. The second type really does believe in your organization and mission, but they need to win a widget to part with their hard-earned dollars. They want to buy auction items such as vacations, jewelry, dinners, experiences, etc. In most audiences, these two types of individuals are split 50%-50%. This 50/50 Principle supports rationale of conducting both a live auction and special appeal together.

5%, 40%, 55% Principle

While every audience is unique, there is another basic concept from which to begin the demographic conversation. We call it the “5%, 40%, 55% Principle.” A few years ago, we studied the buying habits of thousands of guests from more than 75 of our live auctions. What this research showed, was that only 5% of any audience is prepared to spend several thousand dollars on live auction items or during the paddle raise; 40% of any audience is not prepared to raise their bidder number at all on live auction or the paddle raise; and 55% would absolutely LOVE to raise their bidder number and perhaps win an auction item, but most organizations either forget about this segment, or choose to leave them out. Let’s take a more in depth look at each segment.

The 5%

While it’s true that most organizations generate 70% of their event night revenue from the 5%, the question remains: What do you need to do to engage, inspire and motivate your 5% to show up, not only physically, but financially as well?

The 40%

This section of your audience adores your organization, but usually the ticket price is all they can bear. They would move heaven and earth to help, but will do that through non-cash methods such as referring friends and colleagues, volunteering or spreading the word about your organization.

The 55% – Your Hidden Opportunity

55% of your audience REALLY, REALLY, REALLY wants to play. They want to feel their heartbeat rise when they lift that bidder number for the first time. Male or female, they are thrill junkies and want to WIN. In many cases, these individuals have attended numerous benefit auctions, but have always “checked out” either physically or mentally when the live fundraising began because they knew they couldn’t compete with the big dogs.

This 55% is a HUGE opportunity for every organization to increase revenue. This 55% segment has a spending threshold between $200 and $1,000 depending on the specific event demographics. Imagine if you designed one or more items that you could sell to this demographic 10, 20, 30 or 50 times. You would win big on two levels. First, you would be engaging a tremendous number of guests, who would have not been engaged before. Next, if you sell one type of item to 30 of those guests at $300 each, you would raise $9,000.

Once you begin to engage the 55%, many will transition into the 5% over time. Similarly, when the 40% sees the 55% bidding and winning, they too will evolve into the 55%. This is a WIN, WIN, WIN, WIN strategy.

Sign up for our Blog to the left of this page, and look for articles about the best auction items for nonprofits and how to engage the 55%. If you need more information now, we are just a phone call away: 303-596-4640.