I recently returned from the Barrett-Jackson car auction in Scottsdale, Arizona. It’s a trip I look forward to every year. What started as an opportunity for me to connect with a co-worker on our passion for classic cars has become an annual event that now includes several of us from Marco.
Barrett-Jackson is where car collectors go to dream, peruse and buy. It started in 1971 and is known as a worldwide leader in collector car auctions and automotive lifestyle events. The auction company has created an experience unlike any other that I have been a part of. This year’s auction garnered over 350,000 people and $100 million in sales.
As I left the event, I could not help but think about how much any business could learn from the Barrett-Jackson model. Here are my takeaways on what I think makes the business successful:
- No one to impress.
I appreciate the casual feel of the auction. I never saw anyone in a shirt and tie or looking like they were about to spend hundreds of thousands of dollars. Yet, six-figure transactions were happening constantly and some cars went for over $1 million. Justin Bieber’s car went for $435,000 and the lucky new owner of Burt Reynolds’ Smokey and the Bandit car paid $235,000 for it. Not everyone is there to buy and there is certainly no pressure to, but everyone contributes to the services and revenue generated.
- Attract premium buyers.
Most businesses would prefer to attract premium buyers. Barrett-Jackson has been able to do just that and in my experience, it is the single reason why the business model has been so successful. It has allowed the company to make strategic decisions based on the customer profile and expand their services beyond the cars. Yes, the cars drew the crowds, but there were many other related products and services marketed to the audience because they have the money to buy them.
- No minimum prices set (no reserve).
Most high-ticket auctions – like most businesses – set a minimum price they will sell a product for. At Barrett-Jackson, there are no reserved auctions. Whatever the car sells for is the price. While it may sound risky for the seller, it’s not because of the premium group of collectors the auction attracts each year.
- Know what your customer wants and is willing to pay for.
When it comes to classic cars, older is not always better or even more valuable. Typically, car collectors prefer cars popular when they were born or started driving. While I am interested in muscle cars of the 60s and 70s, younger buyers like my son might prefer classic trucks. The traditional car collectors who sought what we would call antique cars today are no longer in the buying mode and that market has diminished. Barrett-Jackson has stayed ahead of the curve on this to ensure the vehicles they’re auctioning appeal to the buyers of today.
- Create interactive experiences.
Barrett-Jackson has diversified the auction experience to give attendees – and the vendors – better outcomes. Want to drive a new Hellcat or Shelby? You can. In exchange for the experience, attendees provide personal information, share feedback and also test drive one of the more practical, everyday road vehicles that the car manufacturer is promoting. While attendees are taking dream drives in the newest products, the manufacturers are building databases and formulating their marketing.
Barrett-Jackson is far more than a classic car auction. Obviously there are many ways to buy cars, but they have figured out how to align the buyers with the sellers to create a customer experience that keeps people like me coming back year after year. I’m already looking forward to next year’s event.