Negotiating tips for your gala event, from an auctioneer

Mike Hanley Charity Auctioneers

An auctioneer is, at heart, a negotiator. After all it’s his or her job to “negotiate” the best and highest price for an item with a bidder.

Negotiations are defined as a discussion or discussions aimed at reaching an agreement. It surprises me how many nonprofits and charities do not negotiate with their vendors at all, and I’d like to examine this.

Most nonprofits consider negotiation as soliciting bids from several vendors. They ask for bids from caterers, florists, event management companies, and auctioneers and then select the most competitive bid (Which usually means the lowest.) But why stop there? The art of negotiating can continue and quite possibly add thousands to your bottom line and get you the vendor you really want. It just takes a little creative thinking.

Counter offers

We do this all the time when we buy cars, real estate and even jewelry. Ever buy something at a pawn shop? If you have found a band, florist or caterer you really want because they do such a good job (or because your committee insists that they must be the ones you get) why just abandon them if their price is beyond your budget? Or why pay the higher price? Counter offer to them. Add in a long-term option: “We will pay you this (20% less than your quote) but we will sign a 3 -year contract with you to make it worth your while to give us the better deal.”

Why pay all the fee in cash? Let’s look at this scenario:

Your gala is at the JW Marriott Resort & Spa. You will fill a Ballroom with 750 guests and you are paying for dinner, drinks, parking, wine, etc. Your organization is about to drop how many thousands of dollars to this venue, so why not ask them to sweeten the deal with a free block of five rooms for two days for some of your VIP guests? That hotel event planner wants to close this deal. And if the JW won’t do it, how do they know the Four Seasons won’t? Ask for five and get two. (Always start high)

Now the auction company you really want (again your committee insists upon them) quotes you a price of $______ for auction services at your gala. You counter with $_______ but also a weekend at the JW Marriott Resort. How much have you reduced costs? You can also use this method with some nice silent auction items that you can offer as “trade for services”.

Pay for performance

Paying a percent of revenue generated is not a bad thing. It’s not even unethical if it’s clearly understood at the start and everyone is going into the arrangement with open eyes. This can be used when contracting with event software, silent auction procurement companies, and auction companies, any vendor that promises more revenue or better results. Why not share the risk? If they quote a flat fee, counter with a much lower guarantee but a large percent bonus if certain targets are met.

 

Timing is everything

This is tricky. If you are calling a vendor a week-to-10 days prior to the event, you might have an advantage in the negotiations. We have all seen the automobile dealerships and the “We must make room for next years models” commercials. Also, if you have ever worked with someone on commission at the end of the month or year, you know they have targets to meet or bonuses that depend on meeting certain targets by a certain time.

A florist (for example) who has a greenhouse full of Christmas poinsettias on December 23rd is anxious to make a deal and a fireworks stand at 4 PM on the 4th of July is making deals right and left. So, a caterer who has nothing going on the night of your event and is not likely to get another call might give you a great deal. But you run the risk of everyone being booked for your night and left scrambling. If a vendor senses this, they might dig in and not budge on their price. (This is business after all)

There is also the off-season discount. There are not a lot of galas or event on Wednesdays in June. If you are having a fundraiser during that time, you should be in a very good position to negotiate a very good price from an auction company or silent auction procurement company. This would not apply to bands or florists, however, since there are a lot of weddings in the summer. The off-season discount is different depending on the industry.

A few words of caution

You can’t get free services with any of these techniques. Cash is still the king, and you will most likely have to pay something for valuable services. These ideas can be used to save you money not get something for nothing.

“Exposure” and “promotion” are not commodities that can be used as negotiation tools. Most vendors require as standard a listing in the program and most auctioneers (in particular) require in their contracts that you post their websites on your social media marketing and web pages for events. I don’t have time to recount the numerous stories of auctioneers being seduced by the promise of “You’ll get so much exposure” and realizing nothing from it. Any vendor of any kind with more than one year of experience will not accept “exposure” as payment of any kind.

The key take away is this: Ask or the answer is no. It’s no different than donor solicitation. The donor who is not asked for a gift will not give it. The vendor who is not asked for a consideration will not just wake up and say, “You know, we thought it over and we will take 25% less.”

Good luck!

Mike Hanley is a 29-year veteran fundraiser with the Boy Scouts of America and a Licensed Auctioneer in the State of Texas. He is easy to find. Just visit www.austinauctioneer.com