Everyone in our industry has heard countless auctioneers get off the podium and utter the unsatisfying proclamation, “It’s worth what it’s worth,” or when they say, “That’s all they would pay,” or even worse, “I got every dollar in the room .”
Great auctioneers have one charter: get all the money into the room. Of course with technology advances, the room has expanded through the Internet and across our planet. Often the asset class is better suited for online events, and we can’t always blame the auctioneer when your asset advisor shrugs his shoulders and says, “The market spoke.” He or she may actually be right. Before you grin and bear it, make sure these six steps are followed, and always remember: the marketplace needs market makers.
Step One: Asset Knowledge. The beginning of all auction marketing campaigns start with understanding each tool. It is critical to know how many are sold per annum. Prior to commencing any ad campaign, find out if the asset is still state of the art or facing impairment from technological obsolescence. Knowing the asset will define the marketing campaign and assure you the right bidders make a true market. Proper research may tell you that your five year old nuclear magnetic reactor is not suitable for an expanding bio-pharma R & D firm, but there remains a vibrant secondary market to universities for training. If the auction marketing missed the mark by focusing on the OEM and not the universities, then the asset was not truly marked to market.
Step Two: Know Your Audience. Today all of us are receiving ten times the emails and information we can possibly digest. Each work day we are forced to decide what to read, what to save, and what to delete. Can an email for used equipment make its way through that maze? The answer is YES if you know your audience. Shotgun blasts to huge databases produce minimum results; however, maximum asset exposure produces true value. An example would be the sale of a one year old Agilent Spectrum Analyzer. Proper research told you to focus on bio-pharma and semiconductor users globally. However, more detailed research on several websites gave you many other industries to notify. The asset had spirited bidding, and the lab was outbid by a startup organic skin care cosmetic firm. The asset was effectively marked to market.
Step Three: Know Your Competition. Remember, it’s always a buyer’s market in the secondary channel. On rare occasions assets are purchased used at huge premiums due to immediate availability, but the vast majority are acquired secondhand based on the savings versus buying new. It’s critical to know if the manufacturer has a trade-in program. Do they have refurbished tools competing with your asset? Are they a possible buyer? Also, it is critical to understand the dealer channel. Over supply diminishes asset value, but it can also work in favor of smart sellers. When you hear a buyer comment, “I paid too much but I had to protect the value of my other ion implanters, you know you effectively marked to market.
Step Four: Make Sure You Connect. If you have ever had an auction with good assets and poor attendance, it’s not the market; it’s the marketing. When everyone throws their hands up says, “I don’t know what happened, we mailed the entire database and nobody showed up,” the reason may be very simple. For example, you have one hundred generic fork lifts in a plentiful secondary channel. Did your SEO ad just say forklift auction, and did your landing page do the same? Either price, condition, immediate availability or close proximity must compel a buyer to your asset. Seeing the ad is first, but did you connect? Here’s how: “Highest quality and low usage assets,” “All maintenance records,” “Largest inventory at auction this year,” and many more. Connect with your audience.
Step five: Make Sure Your Metrics Matter. We are all inundated with perceived key web metrics like page views, click throughs, and web traffic. The dot-com days of eyeballs are in the rear view mirror; today it’s all about transaction metrics. Telling the seller you’ve received ten thousand page views is not relevant without real metrics on the conversion rates from past campaigns, real metrics on new registrants versus database buyers, and the most important metric—buyer per asset. Having a ton of landing page traffic could mean your PR was great and your site is flooded with curiosity, but not real buyers. Knowing your metrics per asset matters.
Step Six: Manage Your Spend. Maximum recovery is always a net number by a specific date. “How much will I recover, and how long will it take?” are the central questions. The central keys to managing your spend are the two critical T’s of spend management: Timing and Targeting. If the market campaign is too short buyers can’t react, and if its too long the spending is not warranted. It is crucial to know your target to maximize spend management. Resellers and return companies need little time, but large corporations need approvals and more reaction time, as do both new and foreign buyers. Lots of fast ads are great for some assets, but longer, slower campaigns are needed for others. The Two T’s, Timing and Targeting, should control the outcome.
Heritage Global Partners
Asset Advisory and Auction Services
A Legacy since 1937