How I spent my
summer vacation
JESSE ALLEVA
Saving the family auction business
an auction house built upon failure
Grubstake Auction was founded in 1980 and specializes in real estate, heavy
equipment, and vehicle auctions. Throughout the years, we’ve established
ourselves as the largest auction company in the state and sell everything from
diamonds to dumptrucks. Some of our most exciting auctions are bankruptcy
liquidations. Growing up in the auction business, I’ve seen and learned how
many different businesses in Alaska have failed. Either failed to innovate or
innovated too fast and ultimately exploded. The key to Grubstake’s success,
and what I would say is ingrained in me from all my experience, is quickly
learning market dynamics of various sectors to find buyers for these failing
businesses’ assets. It take a curious and agile mind to run an auction business
as inventory is constantly changing.
However, in recent years, Grubstake was starting to go the way of the
businesses it helped liquidate; consigners and bidders fled to online and rival
companies, overhead costs soared, and the business model broke. If problems
weren’t addressed, Grubstake itself could be next on the auction block.
regular auctions
bankruptcy auctions
real estate
brewery
heavy equipment
airliner
vehicles
jewelry store
(CLICK HERE)
THE PROBLEMS
Losing market share and customers to online and local competitors
IT and web presence stuck in 1990s
Lack of quality and quantity of information on website for users
Slow customer check-out and outdated auction processes
PROBLEM SOLVING METHODS
gut instinct
data analytics
gut instinct
data analytics
my 20+ years in the auction business guided
what was wrong and pathways to solutions
gut instinct can only go so far…
what can data tell us about:
customers wanted:
up-to-date information on inventory and
auctions
faster check-in/check-out at auctions
great deals
the auction business:
why are we losing market share to online
and local competitors?
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problems:
it and web presence stuck in 1990s
lack of quality and quantity of
information on website
outdated auction operations
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possible solutions:
redesign website and online auction site
upgrade it and new auction software
solutions
marketing campaign and brand redesign
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customers:
what are the different demographics of
auction goers?
how are their needs unmet?
how best to market to these demographics?
inventory:
what predicts final bid prices?
what kinds of bidders buy what kinds of
items?
data informed solutions:
smart marketing campaigns
pricing models
forecasting tools
problem: outdated webiste
banner ads
difficult to
navigate
calendar
difficult to
update
aol image
search
sourced clip
art
too many
calls to
action
no
hierarchy to
design
lack of
design to
users needs
SOLUTION: WEBSITE DESIGN
adobe muse prototype
Cleaner design
• Easier to navigate
• Hierarchy to customer needs:
• Joining e-mail list
• Viewing auction calendar
• Consigning items to Grubstake’s auctions
• Price appraisals
Problems with Adobe Muse prototype:
• Extremely different from original website
• Very off-putting to old users when testing
• Designed to my tastes instead of to the taste of our customers
• Difficult to update quickly
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squarespace final version
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Easier to update than Adobe Muse prototype
Dynamically resizes across different devices
Easy to maintain by novice webmaster
Similar design to old website
Excellent integration with e-mail marketing program
Excellent analytics to track customers and page views
E-MAIL AND WEBSITE ANALYTICS
after launch of new website
c
102
26%
86%
274%
231%
New
users/week
E-Mail list
growth
Open rate
growth
Click rate
growth
Web traffic
growth
DATA ANALYTICS
customers, cars, and marketing
HISTORICAL CAR AUCTION DATA
3064
1751
DATA POINTS
BIDDER PROFILES
56
CAR MAKES
354
CAR MODELS
3
“In God we trust; all others must bring data”
W. Edwards Deming
YEARS OF DATA
QUESTIONS TO BE ANSWERED TO HELP
INCREASE REVENUE AT CAR AUCTIONS:
• what are the best predictors of car
price?
• what are the different segments of
customers?
• how are they different?
• what are the best marketing channels
to reach these segments?
DATA ANALYTICS
End User
Re-Seller
most sold vehicle
bidder profiles
# of Auctions Attended:
Average Price Paid for Car:
Average Age:
% of Cars Purchased by Group:
Increase in Price of Car per Bidder:
Typical Intended Use for Car:
Marketing Channel:
*
1-2
3+
$812
$620
35
57
22%
+$40.54
Daily driver
TV, E-Mail
77%
1994 Ford Explorer
Current Retail Price: $4200
Avg. Auction Price: $662
*pricing
model
year
price
1951-1995
$424.50
1996-1998
$724.40
1999-2004
$1207
2005-2014
$2884
+$0
Re-sale or parts
Newspaper
MANUFACTURE YEAR BEST PREDICTOR OF WINNING BID PRICE
MARKETING CAMPAIGNS
(CLICK HERE)
newspaper
television
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Targeted to “Nascar Dads”
NASCAR
NFL games
MLB games
Fox News
Jeopardy
Late Night
online &
newsletter
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Most Grubstake customers
still check classified section
Must use newspaper to
satisfy contracts with
government agency clients
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YouTube ad conversion rate
absymal
Twitter page remains
unfollowed
Much better results with
Facebook ads
RESULTS OF MARKETING CAMPAIGN
$900.00
$825.00
$750.00
$675.00
$600.00
29
No
v
15
No
v
1
No
v
25
ct
O
O
ct
11
4
ct
O
27
Se
pt
Se
pt
6
$375.00
30
Increase in
End Users
$450.00
Au
g
62%
$525.00
average weekly price of vehicle sold at auction
problem: customer experience
OLD PROCESS
3-5 Min.
1-2 Days
37 Hours
Average
customer
wait time
Processing
time for
new inventory
Additional
man-hours
to set up and
run auction
OLD PROCESS
pre-auction
Inventory Specialist
types inventory list into
computer
Pictures of inventory
are taken
Photos imported into
computer
Customer bids
and win an items
Customer waits for
clerk’s sheet to be
delivered
Manually copy
inventories and
pictures to auction
computers
Exports and uploads
inventory to website
Customer waits for
cashier to enter clerk
sheet information into
computer
Customer waits for
background check
auction
Customer hand writes
information for bidder
card
Customer waits for
information to be
typed into the
computer by cashier
Customer pays for
and receives item
$
Bid #
87
Cashier checks
auction computer to
make sure the
inventory specialist
updated inventories
Cashier types
information into
computer
Cashier generates bid
card from customer’s
information
Clerk writes winning
bidder number and
price paid on sheet
Clerk delivers “clerk
sheet” to cashier
every 10 items
Cashier types
information from
clerk sheet into
computer
If necessary, cashier
performs background
check on winning
bidder via telephone
NEW PROCESS
pre-auction
Inventory Specialist
loads inventory list
into Cloud
Pictures taken using
tablet and attach to
inventory in the Cloud
auction
Inventory automatically
updates to all auction
computers running
Cloud client
Items automatically
post to online auction
website
Online bidder done
simultaneously to live
bidding
Customer hands ID to
cashier
Customer bids on
items
Customer wins item
Customer can
immediately check out
Bid #
87
Customer pays for and
receives items won
$
Bid #
87
Cashier
accesses
auction data
from Cloud
Cashier scans
customer’s ID, autopopulates fields and
stores information in
Cloud
Cashier generates bid
card from customer’s
information
Clerk enters winning
customer’s bid
number and bid into
tablet. Tablet wireless
transmits to cashier’s
station.
Auction software
calculates purchases
and total due by
customer
If necessary,
background check is
completed
automatically via
internet
NEW PROCESS RESULTS
20 Sec.
10 Min.
35 Hours
Average
customer
wait time
Processing
time for
new inventory
SAVED
man-hours
to set up and
run auction