Auction Managers: Watchers and Drivers

How important is the auction manager to the success of your reverse auction?

At TradingPartners the auction manager is central to the whole process – from the supplier selection and training through to actively driving the negotiation during the reverse auction itself.

For example during a TradingPartners auction the auction manager can be seen communicating via instant messaging with bidders in order to encourage additional bidding. I have written before about how judicious use of instant messaging increases bidding activity and therefore savings.

My moles in other providers tell me that many other purveyors of auction systems seem to treat the auction itself as a technical activity that pretty much runs itself, barring any technical mishaps. The auction manager’s role is a more “up front” role to get bidders ready for the auction. On the day of the auction event the auction manager’s role is to watch the event rather than to drive it, and to respond to technical issues rather than to stimulate further competition.

When I have discussed the role of instant messaging with non-believers the usual riposte I get is something like: “Ok, you have shown how sending an instant message at 10 minutes into the auction got you an extra bid and more savings, but even without that instant message, you would have got that bid in the revese auction extensions.” It is impossible to prove one way or the other what ‘would have happened’ so it’s an impossible argument to refute. When it’s been my budget up for grabs I’ve been keen to take every possible opportunity to get the best possible result rather than leaving things to chance.

If you are planning reverse auctions as part of your sourcing strategies take the time to consider whether you expect your auction managers to be watchers or drivers, and understand what your vendor/provider’s approach is.

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7 thoughts on “Auction Managers: Watchers and Drivers

  1. John Hatton

    Like Alan, I’m a huge believer in the power of instant messaging – and in the importance of the role of the auction manager. And not just because I’m an ex-employee of TP.

    I’ve seen events run well and some run badly. But what I am sure about is that careful control of the event – via messaging and the potential to flex certain auction parameters – enables the buyer to flex the approach according to what’s happening on the day.

    I’ve debated instant messaging with one large global auction provider and we agree to differ. Their view is that, when the buyer sends a message, he/she is ‘handing some power’ over to the supplier. I assume this means the buyer is starting to look desperate for sharper bids.

    My view is that instant messaging is not just about sending specifically-targeted, or generic messages to encourage keener bidding. It can also be used to ‘soften’ or ‘humanise’ what is an otherwise somewhat cold and mechanical process. Something that bidders actually appreciate – and without engaged bidders, your next auction will surely fail…

    jph Feb ’09

    1. Hi JPH

      So it seems that this company actually believes that communicating with suppliers during an auction is a sign of weakness and is counterproductive? I wonder whether they have actually ever seen effective communication in negotiation with suppliers in practice, or whether they are talking from a purely theoretical standpoint. Or, heaven forbid, whether they are spinning you and are trying to sell you a lack of capability in their process/system/technology as a positive 🙂

    2. Nick Wright

      Hi Alan, John, Everyone else

      I’ve only come across this blog today and am greatly interested in this practice of instant messaging bidders. With the tool I use I am able to send these – but what do you actually communicate to the bidders? Is it just words of encouragement?(is that enough?)

      I generally run ‘ranked auctions’ where bidders only know if they are either winning or not winning. Would I message those bidders who are not winning and hint how close they are? If this is the case is it fair and transparent?

      Thanks in advance for any advice

  2. marc Halpin

    Hey Al,

    Great article and a critical part of the process- messaging that is. Fact is e-auctions managed well are just that they’re ‘managed’ by great people who know what they’re doing. Do you think we should change to Mac’s BTW? 🙂 Marc

  3. Hi,

    Can I see a demo about how your auction manager tools work? Also, we make an Auction SaaS tool for firms who create auctions to implement for bulklister and tech issues.

    Would be interested in speaking with the Owner or VP of Marketing about an Affiliate Marketing Partnership.

    Sincerely,

    Joan Ambrosio
    Rifluxyss
    510-429-8709

  4. I don’t think the value of instant messaging should be played down, when done effectively it can liven the bidding up and help make significant improvements on previous bids.

    I personally don’t agree with the handing over of power from provider to supplier, i think clear communication between the two parties can only help proceedings and build stronger relationships that will thrive in the future.

    And to be quite honest, any auction manager that doesn’t see the merits of instant messaging shouldn’t be listened to

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