Comfort radically influences bidder behavior!
Ebay auctions are a game, and governed by game theory, (remember that movie “Beautiful mind” with Russell Crowe, chronicling the life of John Nash the crazy, but genius professor), yeah, it’s that stuff. Nash is the central figure in much of what is covered in this book and his Nash Equilibrium is the basis of an enormous amount of academic work.
According to Wikipedia, eight Game Theorists have won a Nobel prize for their work, so it’s a widely studied field. It includes fun concepts like ’zero sum game’ and ’win win’ outcomes. Believe me when I tell you, if you’re not a total math geek, you don’t want to get involved in the mathematics behind all the theorems and proofs. It gets very complicated very fast.
What we know for sure based on all of this academic work, and what we can say, (In my opinion), is probably the most important rule for getting a successfully auction completed is a very simple concept:
High comfort = Bold Bidder Action
When a bidder has a high degree of comfort with what is going on, they become bold bidders. As their uncertainty grows, their boldness declines.
People want to know as much as possible about what is going on as the auction unfolds. Feeding your bidders information, and making them comfortable is the single greatest element for success in auctioneering. Violating this basic rule will take tens, hundreds, and even thousands of dollars off the table.
This is common sense when you think about it. The comfort level of each participant with the rules of the game, and the ’reality’ of what is happening radically influences their behavior. As people have unanswered questions, or ‘red flags‘ about even the smallest of details, they temporarily put those concerns out of their head if their desire for the object outweighs their concerns, but as the stakes of an auction get higher and higher, those red flags re-emerge as buzz kills. They become the show-stoppers that turn an active bidder into a watcher.
Let’s imagine a few Ebay listings together to clarify this idea, (and you can assume that they both have terrific pictures related to the item:
Listing #1: “For Sale: 1 pair of Levi’s 501 Jeans worn by actor James Dean the day before his death, as certified by Sotheby’s Auction house in 1966, and held in a Barkley’s Bank Vault until now. All paperwork available for inspection and certified by the Screen Actors Guild. Additionally, the 501 Collectors association value chart, (link provided), indicates that 1966 501s in top condition sell for $2,200 on average. Reserve Price: None. Starting Bid Price: One Cent. (Pictures of jeans and all documents included).
Listing #2: “For Sale: 1 pair of Levi’s 501 Jeans worn by actor James Dean the day before his death, according to Bill Parker, my uncle, who was James Dean‘s best friend, you can Google it“. Jean’s kept in a secret location until now. Starting Bid: $10,000. (Pictures of jeans included).
Obviously this is an extreme example to prove the point, but you get the idea right? The tools involved in creating comfort are not mysteries:
- Clear Facts about the item
- Clear, (high quality) pictures
- Details about who you are, (people buy from people).
- Your credibility indicators
- Social Proof that the item is valuable
- (Credible) third party endorsement
- A very low bid price
- Details about the scarcity versus abundance of the item. Is it one of a kind? Or will you sell another one tomorrow?
Here is the critical lesson in regard to rule #1 – Ebay has set up a lot of the rules of the auction system and people generally know the Ebay rules. But you as the auctioneer set up a whole collection of your rules as well. If you set them up well, people get comfortable. Set them up poorly, or leave them unstated, and people get uncomfortable. The clearer you make your rules, the more comfort the seller will have
If you fail to set up your rules clearly, or don’t set them up at all, your bidders will have a serious comfort problem. This is a huge mistake.
“The only thing we have to fear is fear itself – nameless, unreasoning, unjustified, terror which paralyzes needed efforts to convert retreat into advance.”
This is one famous quote of the late president Franklin D. Roosevelt on his First Inaugural Address on March 4, 1933.
It’s true for auctions too, fear immobilizes people. And if they won’t act because they are afraid of your ‘deal‘, you won’t have a successful auction. Comfort reduces fear.
Make them comfortable!