Auctions aren’t just about selling, they can also make a significant contribution to building a brand. Customers don’t just buy goods via an online auction, they ‘win’ them. This is the crucial difference and transforms what could be a simple and routine transaction, into a complex and emotional engagement, which starts with the first bid.
When we bid online, we will wait, check back in, receive ‘outbid’ messages and feel a real connection to the item and brand. This provides multiple opportunities, not only for brands to communicate with their customers, but also to influence their behaviour.
Many brands are starting to experiment with loyalty point auctions. This already works well in the sports market, where people are used to seeing philanthropic auctions for clubs – a sportswear brand offering the chance to run round the track with a famous athlete, for example, or a football club auctioning off goalie gloves or ‘meet & greets’.
But what we are seeing now, is a greater sophistication in the use of loyalty point auctions. Customers who are running low on points can be incentivised to collect more points in exchange for any number of actions – fill out this form so we know you better, tweet about this auction, ‘like’ this on Facebook, buy your season ticket early for more points. In this way, customers can be encouraged to become brand advocates, a significant part of the marketing drive – essentially flying your flag in a much wider setting.
One of the biggest issues with loyalty schemes is the large amount of ‘non-movers’, in other words, participants at the lower end, who may not have enough points for a meaningful redemption. Getting these people to actively participate is key to the success of a loyalty scheme.
Awarding points in exchange for brand advocacy has been shown to overcome this inertia and get this potentially inactive group of members fully engaged and motivated.
We can also introduce what we call a ‘pay-to-bid’ auction model, as demonstrated by so called ‘penny bid’ auctions, where bidders increase on the previous bid by a penny. In this type of scenario, the price is largely inconsequential, the last person to bid wins and a ‘bid’ is purchased for a set number of points. With this model, our loyalty scheme non-movers, can use their low level of points to buy the chance to bid for a heavily discounted product, which would normally be out of their reach. They are happy to use the points for this purpose, as the alternative would be to do nothing with them.
Once consumers leave the auction website, brands can leverage more tools for engagement. The communication doesn’t need to end there and they can be contacted on multiple occasions with updates, from ‘outbid’ warnings, to ‘auction ending’ notices. This process has been proven to increase site visits, but also allows brands to communicate other news and sign post other areas or sites, they would like them to visit.
Online auctions can also act as a valuable tool, to increase the profile of a brand’s sponsors. Bidders who may have lost out on the chance to win a holiday or VIP flights, can be directed to the airline’s website, or contacted via email with a discount flight or holiday offer. This can be used to maximise sponsorship relationships and continue to bring both your own, and your sponsors’ brands front of mind.
Social and digital are leading the communication field, but in this crowded online space, brands who can integrate auction technology with their digital campaign will stand out, building meaningful and engaging customer relationships. Online auctions are a powerful new addition to any brand’s marketing toolkit.