Talk about creating super fans, and interacting with their consumers.  I only need to read the comments to realize how powerful this one little video response would be for EA Sports.  With nearly 1.7 million video views, and over 2,600 comments, they’ve hit a homerun.

Subdivision 1a. (b): No person shall engage in the business of selling used motor vehicles or shall offer to sell, solicit, deliver, or advertise the sale of used motor vehicles without first acquiring a used motor vehicle dealer license.

This is very clear, and takes all auctioneers (and all persons) out of the business of selling used motor vehicles.  There are exceptions that allow the sale of motor vehicles without licensure that come later in the statute.

Subdivision 1a. (h): No person shall engage in the business of auctioning motor vehicles for more than one owner at an auction or shall offer to sell, solicit or advertise the sale of motor vehicles without first acquiring a motor vehicle auctioneer license.

This is very clear that no auctioneer can sell, solicit or advertise the sale of motor vehicles for more than one owner at auction.

Subdivision 5a: No person may solicit, accept, offer for sale, or sell motor vehicles for consignment sale unless licensed as a new or used motor vehicle dealer, a motor vehicle wholesaler, or motor vehicle auctioneer.  This requirement does not apply to a licensed auctioneer selling motor vehicles at an auction if, in the ordinary course of the auctioneer’s business, the sale of motor vehicles is incidental to the sale of other real or personal property.  Incidental means up to a total of ten but no more than ten percent of the items in the posted auction bill are motor vehicles.

In this subdivision lies the loophole. This statute exempts an auctioneer from Subd. 1a.(h) (which states an auctioneer shall not sell, solicit or advertise the sale of motor vehicles for more than one owner at auction) provided no more than ten percent of the items on the auction are motor vehicles.

While the letter of the law indicates by selling ten times the number of smaller items as compared to the motor vehicles, an auctioneer is exempt from motor vehicle licensure.  I believe the spirit of the law would preclude an auctioneer from doing so.  In addition, many auctioneers (many of whom are auto dealers and many who are not) have commonly held that you may not sell for more than one seller at any given time.  This statute seems to go against that belief.  That said, I am familiar with enforcement actions against auctioneers for selling for more than one seller, and for selling more than ten vehicles at a large one-owner auction.

It is quite easy to take the exception from this subdivision at its surface value.  However, when reviewed in the entire scope of the statute, I believe the court would hold that an auctioneer conducting a large consignment auction with 50 vehicles, and 500 other lots, would be subject to licensure, as the spirit of the law in several places appears to preclude an auctioneer from doing so.  However, as you notice, the letter of the law can be read quite different.  Furthermore, my understanding is the State of Minnesota dealer licensure division is interpreting the exception to the letter of the law saying you may sell a number of motor vehicles up to ten percent of the total items on the auction bill, rather than to the spirit of the law.

Subdivision 8. (b) in part: Isolated or occasional sales or leases of new or used motor vehicles are exempt from this section…. “Isolated or occasional sales or leases” means: … (3) sales by a licensed auctioneer selling motor vehicles at an auction if, in the ordinary course of the auctioneer’s business, the sale of motor vehicles is incidental to the sale of other real or personal property.

Again, the exemption granted in Subd. 5a. is stated.  Previously the definition of incidental was given - up to a total of ten but no more than ten percent of the items in the posted auction bill being motor vehicles.

However, I again argue, the spirit of the law should be considered.  While one may argue that the letter of the law allows 50 vehicles from 50 different sellers so long as there are 500 other non-motor vehicle items to be sold and listed on the auction bill, I do not believe the intent of the law was for such an event to occur.

I have also reviewed the applicable Minnesota Administrative Rules and there does not seem to be any further clarification.  A call to motor vehicle licensure department confirmed that the letter of the law is being enforced in many instances, rather than the spirit of the law.

While this loophole exists, and I believe it needs to be closed, I have mixed feelings on the matter.

I.    If the motor vehicle licensure department is indicating the auctioneer seeking consignments, and selling motor vehicles is acting within the letter of the law so long as no more than ten percent of the items are motor vehicles, should we as an association be pushing for closure of the loophole?

II.    I believe the auctioneer is not acting in good faith, or within the spirit of the law. When reading the statute, it seems clear the intention was to disallow auctioneers from conducting regular consignment auctions of vehicles without being subject to the dealer license laws.  This makes sense to me on several levels including matters of liability, bonding, sales and transfer taxes, and insurance.

III.    I do not believe the board or executive committee can act without the direction of a majority of the membership. To lobby for a law change when the state is accepting of the position is not, in my opinion, within the board’s power. That said, if legislation were proposed or the membership desired the loophole closure, the association would need to take a position on the topic, and could then begin the necessary lobby efforts.  This is a reactive approach and quite the opposite of how I would like to proceed. I would much prefer to head off any troubles prior to them beginning.  However, it is best either to wait for legislation from outside the structure of the association, and to respond at that time, or to pursue closure of the loophole at the direction of the membership.

IV.    I am aware of many auctioneers in the State of Minnesota who also hold their motor vehicle dealer license.  They are acting in good faith, and should not be subject to competition from others who are not acting in good faith and are circumnavigating the intent of the statute.

V.    I believe revision of the definition of incidental from “Incidental means up to a total of ten but no more than ten percent of the items in the posted auction bill are motor vehicles” to “Incidental means up to a total of ten motor vehicles” would sufficiently remove the loophole.

At the end of last week, I was informed that an auction I’ll be doing next week was going to provide me with some challenges.  The challenge was/is there is no cellular coverage in the building.  Although, immediately out the front door, there is tremendous coverage.  At least, that’s what the coverage map seems to indicate.  My solution to this problem was a bit more creative.

I picked up a high gain booster antenna, and a Cradlepoint CTR500 EVDO Travel Router.  This allows me to do several things.  The first is to plug the antenna into my existing aircard, and increase the reception by one to two bars.  This will be important for those less than good signal moments.  The second is that the router allows me to plug the aircard directly into it.  This allows me to setup the router and aircard in an area where I have the best signal.  I then can either broadcast the signal wirelessly with the router, or use my Ethernet radios to transmit the wireless signal a long distance (60 miles direct line of sight, or through up to 10 walls).

With the upcoming auction where there is no connection inside.  I’m going to setup my travel router, aircard and antenna near an outside door.  In theory, I’ll have a good strong signal from that location.  I’m then planning on hooking the router to my Ethernet radio, and point to point broadcasting the Ethernet signal to my laptop which will be hooked to my other Ethernet radio.  It may sound like a cumbersome arrangement, but I’m hopeful this arrangement will allow me to increase the effectiveness of my wireless setup in those locations where signals are hard to come by.

That peaked my interest, and this morning I decided I’d take a look at the numbers for 2008 year-to-date.  The results surprised me a bit:  33.61% direct traffic, 25.64% referring sites, and 40.75% search engines (google makes up 35.08% of the total or 86% of all search engine traffic).  The results got me to thinking.

In a typical advertising campaign, we expend 90% of our ad dollars to generate the 33.61% direct traffic, and 10% to generate the referring sites traffic, and 0% to generate the search engine traffic.  Yet the results seem to show a completely different result than what one might expect.  Note, realize I’m generalizing this over the year to date numbers.  In a typical year we are running about 20 active marketing campaigns (about two weeks in length each, with some overlap), and the other weeks we are running passive marketing campaigns.

I’m wondering if we kicked the advertising spend around a bit, say 80%, 10%, and 10%, if we’d see increased traffic to our website?  I’m guessing we’d see increased traffic.  I’m wondering if that traffic would convert to a respectable ROI.

Increasingly, as general newsprint becomes less influential, and web becomes more influential, and specifically web searches, it is going to be important for small companies to make the transition.  Now, it shouldn’t be an overnight, immediate shift.  However, a slow steady trend to 10% advertising directed at the search engine traffic that generates 40.75% of our traffic would be beneficial to our company and companies of similar size.

The interview is an interesting read.  However, what really caught my attention was the question about why new supplies aren’t coming online.  The last statement of his answer made the light bulb go off in my head.  It was one of those, oh yeah, no crap moments in life.  The statement:

[T]he bulk of the growth in the future needs to come from the national oil companies, and perhaps price will no longer be the main determinant when they make their [production] decisions, because for many countries, oil is their only natural endowment. And those countries legitimately value and want to leave their one and only natural endowment for future generations.

Once I read the statement, I instantly realized that the problem with oil supplies are not as simple as drilling for more oil.  It’s a matter of survival for the countries with oil supplies.  It’s not supply and demand - it’s survival.  It’s the controlled release of a scarce/sacred “natural endowment” from countries that otherwise have little to no chips in the game of prosperity.  If we’re going to beat the rising cost of oil, we’ve got to understand it’s more than just increasing supply.  We’ve got to figure out how to ensure survival for the countries with oil supplies.

It appears several large corporations are taking the path of least resistance.  Rather than rising up to meet the expectations of their customers, they are forcing their customers to reevaluate their expectations, and lower them.  First Time Warner and now Comcast is rolling out metered internet connections.  This means if you use the internet to download large amounts of data, you either will be capped, or pay extra-ordinary charges for your usage.  This policy is directly attributable to the slowdown and ‘fill-up’ of network capacity of internet service providers, and rather than upgrade their systems, they are taxing the use, and in some cases limiting the use of the internet to provide a better overall product.

Everything I have ever learned about customer service, retention, and loyalty points to changing your business model to meet the expectations of your customers.  Which reminds me of a customer service story I heard once (maybe I read it, I’m not sure anymore).  However, the story went something like this.  A busy candy shop in a popular tourist destination was continually being approached by customers and asked if they had ice cream.  The employees repeatedly got frustrated and said, “No, we don’t sell ice cream, we only sell these fine candies.”  In fact, the employees became so frustrated, they posted a large sign near the front door that said, “WE DO NOT SELL ICE CREAM.”  It wasn’t a few months before their business began to tail off.  The employees couldn’t figure it out.  But you see, it was simple, the decline in business was directly tied to the ice cream shop that opened up a few doors down from the candy shop.  Customers continually expected ice cream from the candy shop.  However, the candy shop continually said no, and forced their customers to reevaluate their expectation for ice cream from the candy shop.  

The moral of the story: “If you find yourself continuously saying no to your customers, first, you may be saying no to your next big revenue stream, and more importantly, you likely are driving your customers to someone that will say yes.”

But as the business of buying and selling over the Internet has matured, the thrill and novelty of auctions have given way to the convenience of one-click purchases. Hershenson will hold his last eBay auction June 3. “The auctions are nothing like what they once were,” he says. “They won’t ever come back.”

…

At the current pace, this may be the first year that eBay generates more revenue from fixed-price sales than from auctions, analysts say. “The bloom is well off the rose with regard to the online-auction thing,” says Tim Boyd, an analyst with American Technology Research. “Auctions are losing a ton of share, and fixed price has been gaining pretty steadily.”

…

What happened to auctions? Not only do shoppers want convenience, they’re also looking for value. And the proliferation of pricing information online has made it easier for consumers to bargain-hunt and lessened the need to risk overbidding in an auction.

As a traditional auctioneer, some of the above information is concerning to me.  However, most of the commentary doesn’t surprise me.  In fact, it confirms what I’ve believed for a few years.  The auction industry is completely different from what it was several years ago, and it needs to continue to evolve if it is to remain the first choice to for individuals to sell their assets.

“The bloom is well off the rose with regard to the online-auction thing.”  Scary.  The traditional auction industry has only begun to grasp the “online-auction thing.”  This year marks the first year where there are as many (or more) online only auctions in the local papers as there are live auctions.  The scary thing is that the bloom is off the rose for most industries, yet the bloom has only begun in the auction industry.  

“What happened to auctions?  Not only do shoppers want convenience, they’re also looking for value.”  This has always been true.  Nothing has changed here, except for a how much convenience “shoppers” want.  It used to be that an auction was a day long activity.  Buyers showed up early, and spent the day at the auction looking for value.  Now buyers show up minutes before their item of desire (if they know when it will sell), and leave shortly after the item sells.  In our experience, the majority of buyers leave an auction by 1pm - regardless of the start time.  We’re now experimenting with earlier start times (8:30 in some cases) to leverage this pattern.

I’m not completely convinced it’s the convenience factor that “happened to auctions.”  Rather, I am convinced it’s the busy factor of life.  Buyers overwhelmingly indicate they enjoy auctions.  However, they have so many other commitments (irons in the fire, if you will) that they cannot spend an entire day waiting for an item to sell.  Perhaps, this points to auctions being an inconvenient way to find value.  I’m not convinced.  If you can’t spend the day, all companies will allow a buyer to leave a bid on an item, and most will allow a buyer to bid via phone on an item.  In some instances, auctions include online bidding (pre-bidding), and live online bidding.  All are convenient ways to participate in an auction without the time commitment.

We’re continually looking for ways to adapt our business and increase the convenience factor while maintaining value for both our buyers and sellers.  Earlier start times are just one step.  Other steps we’re considering are the inclusion of online bidding (pre-bidding) on major items, and online only auctions (eBay style - despite the bloom being off the rose).  All three steps are an effort to make auctions more convenient to buyers, while maintaining prices for sellers.  I’ve got another idea that I’ll explore another time concerning “buy-it-now” options for live auctions.

The technology happens to be an expensive set of industrial ethernet radios (replacement cost close to $2,000.00).  The radios broadcast an ethernet signal from one location to another.  My current set has a range of 60 miles (clear line of sight).  My experience is primarily in non-line of sight applications, and I’ve successfully used the radios at distances approaching a mile.

What the radios allow me to do is be completely mobile with the live online bidding.  I’m able to be live in the sound truck or auction ring with high speed internet.  Gone are the days of sitting in a back room with a two-way radio trying to hear the auctioneer selling, and relaying bids.  Live online bidding with ethernet radios has become a seamless integration into the “normal” operations of live auction companies.

While the cost of the radios is a bit high, the benefits to a company that is regularly conducting live online auctions are high.  The online bidders are no longer limited to lag times associated with multiple operators, and technology links.  There is better communication between the auctioneer and the online operator, and as a result, increased online sales.

BEFORE YOU START

1. Establish Clear Business Objectives and Metrics
2. Reframe Your Notion of Marketing Communications
3. Clarify Your Positioning

RAMPING UP

4. Identify the Influencers
5. Listen Before You Launch
6. Integrate Social Media With SEO

DIVING INTO SOCIAL MEDIA

7. Engage Your Audience
8. Engage Your Employees
9. Engage Your Customers
10. Be Honest and Authentic
11. Define Metrics According to Business Objectives
12. Fail Quickly. Fail Cheaply.

For each of the 12 tips, there is a detailed explanation.  If you’re serious about jumping into the social conversation without drowning, the paper is a must read!

Key ideas that I took away from the paper include:

Marketers need to see themselves not as owners of market share but as members of a market community, and their communications not so much campaigns as conversations with the market.  Whereas the typical marketing program begins wrapping up when a campaign is pushed out the door, that’s where a social media program begins. It’s all about authentic engagement with the market community at every stage of the customer life cycle, not just during lead-gen and loyalty campaigns.

How very true.  In the past it was sufficient to push out a marketing campaign and wait for the market to react.  Now it’s become important to take the campaigns to the next level and engage with our community.  It is as simple as “authentic engagement” and networking with all members of our community.  It’s about being transparent in all our dealings.

It’s important to recognize that influencers are not always your customers, but their impact on your revenue stream can be significant. They may be former customers who have become disaffected; they may be champions of a competing product; or they may simply be agnostics with a strong market perspective that challenges your own. Being able to see beyond the scope of your own customer base to understand how your market is influenced is one of the most important advantages of a social media program.

How very true.  The conversation is not always influenced by our customers, and those “other influencers” have incredible impact on our revenues.  We need to look beyond the trees (our customers), and see the forest (the influencers of our market), to provide a revolutionary product or experience that will positively impact our revenue stream.

The combination of continually fresh content, extensive page inventory from individual blog posts, content expansion through comments and trackbacks, and incoming links from other blogs far surpasses the optimization potential of almost any static website.

The days of static webpages dominating are over.  In order for our company to flourish, we must push beyond the static model of other companies, and embrace the dynamic “continually fresh content” approach to websites.  Not only will it drive traffic to the website, but it will engage the community, and enable us to join the ranks of influencers.

One of the most promising areas of social media is the opportunity to bring your customers into the marketing process by allowing them to provide their own ideas and feedback about your products and programs…. [I]t’s important to recognize that your customers are a fertile source of new ideas and innovations, and social media makes that source more accessible than ever.

The trick is to engage the customers into the process.  The scary part is the engagement, and fear of rejection.  When I initially designed our website, I considered allowing comments on all auctions, real estate listings, and updates.  This idea was brushed under the table.  However, the more and more I think about the matter, I think it has great merit.  Think about going to a real estate/auction website and being able to leave comments on the listings and auctions.  As auctioneers and real estate agents, we’d be getting instant feedback on properties, and while we may not agree with the feedback, it’d be real and honest.  I think it may even give us credibility within the community - I know the comments are being made, it’s just I’m not there to hear the comments or respond to the comments.  I think this has real merit.

Social media is here to stay.  In fact, it will and is reshaping how businesses interact with their communities.  The key is to be an early and savvy adopter of the technology, and engage the customers.  In my industry (auction), there are few companies that are pushing the envelope and exploring social media, and its impact on their revenues.  However, one must push forward in hopes of creating an open dialogue with our clients, and in return reap the rewards of engaged customers.

Online Reputation Management Best Practices to Build Trust

• More than 88 percent of respondents said they would like organizations to give them more choices over the content and frequency of the emails they receive, including options on advertisements, special offers, articles, newsletters, white papers and other specific content options.

• More than 80 percent of participants favor doing business with organizations that use opt-in permission to send them email.

• Monthly emails and content and frequency options positively impacted a company’s reputation.

• Three of every four respondents prefer engaging with organizations that exhibit strong privacy practices.

• Only 12 percent of respondents acknowledged making one or more purchases from businesses they did not know.

Online Business Practices to Avoid

• As many as one in four respondents lose some degree of faith in an organization that is unable to deliver email reliably.

• Daily email messages ranked with pop-up advertisements as the most damaging online tactics to a company’s online reputation.

• On average, about 80 percent of respondents are not comfortable with businesses sharing their email address.

• Internet users believe that about two thirds of companies are likely to share their email addresses with third parties.

• More than 80 percent feel that a business’ reputation is negatively affected if it shares customer email addresses with third parties.

There are some excellent lessons to be learned from this information.

1. Trust the client to know what they want and when they want it.
2. As discussed in my previous post, use of an opt-in mailing list is a business advantage.
3. If you don’t already, have a strong privacy policy on your website.  Our website has a privacy policy that is linked on all pages of the website - while it’s not viewed very often by visitors to the website, I have often referred to the policy with customers requesting information about how we handle their private information.
4. Do not share your customer’s email addresses.  Plus, when you say you will not share their email addresses, don’t!  Even if you think it will help your business, it will only hurt your reputation!

Are you dealing with your customers via email?  I’m aware of several auction companies that regularly dissuade customers from contacting them via email.  If you’re not, you are forcing your customers to interact with you in ways they would rather not, and in the end you are likely losing business.  We have several customers that we interact with solely on an email basis - several of them are our largest auction buyers who we have never met in person much less talked to on the phone.