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Clarity is the key to understanding auctions, too

Ears and fears – we all have them. Have you ever thought about them in the same context? Probably not. I want you to do that now. For the sake of relevance, think about them in relation to auctions. So what do ears, fears and auctions have in common? I’ll explain by sharing five important principles and an example to demonstrate them.

Language is extremely important because it is the medium for communications and communications convey information. Nothing means more to understanding communications than clarity in the language used; yet often, communications are confusing, with the result being misunderstanding, disappointment and even harm.
Oral communications can be even thornier than written ones. This is because they typically require faster comprehension and are not usually in a form that allows careful review. When I referred to “ears,” I was referring to oral communications, although the principles I’m addressing apply to writings, too.

Principle 1 – understanding: There are two primary reasons communications fail. First, a speaker uses less than clear language to express an intended message. Second, a listener fails to grasp the meaning a communicator intended. Frequently a combination of both underlies a breakdown.

It doesn’t matter how correct you are in communicating something to someone. Your success or failure will be determined by whether the recipient understands what you mean.

Principle 2 – differences: When you speak, you know exactly what you are trying to impart. That doesn’t ensure anyone else does. Even if you use clear language the meaning may not come through to the listener. This is due in part to the differences in people.
No two people are the same. Instead, we are the varying products of our parents, genes and the influences of everyone we come in contact with, plus our experiences, fears, education, interests, beliefs, desires, prejudices, values and everything else that pours through our heads. This is why different people can interpret the same thing in varying ways.

Example: Seller: “I’m really counting on this auction.”
Auctioneer: “At the end of the day, you will have gotten the best prices for your things.”

The seller means he is under duress and needs a lot of money from this sale to meet his needs. The auctioneer may or may not recognize this, but she intends only to give a simple answer that reflects what an auction does. She means she will sell each lot to the highest bidder in the auction crowd.

Nevertheless, the seller may interpret this statement as a guarantee that the auctioneer will get the top prices that might be paid anywhere for these goods. Furthermore, the seller may ascribe a guarantee of satisfaction to the auctioneer’s statement – something the auctioneer never intended.

A misunderstanding between the seller and auctioneer would result from both of them using loose language, instead of stating clearly what each meant. This indefiniteness would be compounded by the wide variance in their views of the auction. The seller sees the auction as an extraordinary event needed to solve a pressing problem by maximizing selling prices. The auctioneer looks at the auction as a routine event where the broad goal is always the same: To sell things and make a commission.

Principle 3 – self interest: A key reason for the seller’s different interpretation of what the auctioneer said is this is what the seller wanted to hear. The seller doesn’t care about the auctioneer’s interests; the seller cares about his own interests. His interpretation of the statement supports his interests. Given the chance, most people will interpret a communication in the manner that best serves them.

This explains why a speaker should not allow a listener wide latitude in interpreting a message. That interpretation might be far from what the speaker intended. The obvious solution is that speakers should be precise and accurate in crafting communications. Likewise, listeners should pay close attention to messages to enhance their chance of understanding them.

Principle 4 – fear: Many times speakers are nebulous in framing communications because they want to be. They fear being clear where they see the potential that genuine understanding might cause trouble. In such a case, the speaker will bury the message in “general-speak” in hope a problem never arises.

The auctioneer in the example gave a simplistic response to the seller. She could have fully explained her view of the matter like this: “Based upon the desirability of your things and the effectiveness of our advertising, we’re going to have a group of bidders at the auction. We don’t know how many. You and I both hope these folks will bid a lot to buy what you’re selling, but there’s no way to know that in advance and no guarantee of any outcome.
“What I can tell you is that at the end of the day, you will have gotten the best prices for your things that crowd would pay.”

Part of the last sentence is the same as the example. Everything else is additional explanation. A lot of auctioneers wouldn’t want to give this expanded explanation to a seller. They would fear that a hint of uncertainty or weak results might frighten the seller and trigger questions and issues they wouldn’t want to deal with – maybe even lead the seller to cancel the auction.

Yet, everything I stated in the longer explanation is true. Presented in the right way it would not scare the seller off, but would inform the seller on the process and help prevent what could be an unpleasant surprise if the sale’s result is disappointing.

Principle 5 – candor: Be candid and clear with the people with whom you deal. Failure to communicate candidly and clearly on an important matter could be the path to trouble that could have been avoided. Smart people don’t want trouble and try to avoid it – but they don’t avoid the truth. They address the truth candidly and work with it positively, because, after all … it’s the truth.

Steve Proffitt is general counsel of J.P. King Auction Co., Inc., online at www.jpking.com
He is also an auctioneer and instructor at both Reppert School of Auctioneering in Auburn, Ind., and Mendenhall School of Auctioneering in High Point, N.C. He welcomes questions from readers about auctions and auctioneering. Readers’ communications may be reprinted in whole or part.

Proffitt will answer selected questions but cannot provide personal answers. His answers do not represent legal advice or the formation of an attorney-client relationship. Please submit questions to sproffitt@jpking.com

7/18/2008