dynamic pricing and premium pricing
Stjepan Rajko
Commentary: We don't need to be afraid of dynamic pricing
Posted by Rebecca Mead on the blog 2AM Theatre, May 24, 2010
Ah, Dynamic Pricing. The holy grail of entertainment earned revenue. Has worked for the airlines for YEARS. And yet we are still deeply afraid of it. Under this model, you advertise your lowest price with the phrase "Starts at $XX." Then you make sure the lowest advertised price requires [patrons] to buy early, come to the least popular performance night and sit in the very visible but not very good seats right up front on the side. If they want a better night, a better seat, or the chance to wait until the last minute, it will cost them more. And if you haven't advertised your additional prices in advance, you can adjust these numbers on the fly, experimenting until you find the right price breaks for this audience for this particular show. Yeah, but does it work? I was introduced to the idea at a conference. I brought it back for discussion at my current theater and our Marketing Director was game to try it. We omitted the price lists from our website. We worked with our IT staff to figure out how to build in stepped price increases into our ticketing system that could be activated when capacity hit certain key markers. We crossed our fingers, squeezed our eyes shut tight, covered our ears and pulled the switch. And to our amazement, our earned revenue and average ticket prices started to steadily climb, even as we were able to continue offering aggressive discounts to special groups and Facebook fans to reach our new audience and accessibility goals. All with nary a peep of complaint from our patrons -- even the ones who, in some cases, paid as much as $15 more per ticket than the original price.
Commentary: We don't need to be afraid of premium pricing
Posted by Goldstar's Jim McCarthy on his blog Live 2.0, May 24, 2010
Would you pay $1750 for a folding chair? Before you say "no," imagine that it came with the ability to sit in it in the first row of a Bon Jovi concert. And you got a bunch of other cool Bon Jovi stuff. Still no? Well, sure, that's what a sane person would say, but the point of selling such a package is that some people are insane, at least when it comes to the stuff, almost always entertainment, that they love. Remember [this] when someone says that prices are too high for a given show: they are too high when people aren't buying them. Period. How do you think Dino-Rockers like Bon Jovi still have vibrant careers? They've managed to collect the small portion of the crowd cheering the loudest for them into one place. Your passionate people want more and will pay for it. The question is how to give it to them in a way that not only makes money but also draws them even closer to you. This means not pushing it as far as you possibly can price-wise, because if you do, you're maximizing today's revenue, but probably not building trust and loyalty for the future. If a person feels they've paid dearly for something, even if they like it, they'll remember that feeling. If they feel like they got a good value, even if they paid a lot for it, they'll remember that feeling too, and then they'll want more.
Tim Roberts ARTS Australia
"Rather than individual pricing, personalised discounting based on
behaviour" http://fullhouses.org/2010/06/02/a-twist-not-individual-pricing-but-personalised-discounting-based-on-behaviour/
referring to a recent article in the New York Times Times "Sam’s Club
Personalizes Discounts for Buyers".
On May 30, 8:55 am, Stjepan Rajko <stjepan.ra...@gmail.com> wrote:
> Hi all,
>
> I just wanted to share a couple of items from a recent "You've Cott Mail"
> that might be relevant to ATHENA Tix (maybe not for the first release, but
> perhaps to keep in mind):
>
> pricing*<http://r20.rs6.net/tn.jsp?et=1103434152485&s=3367&e=001qHzlYTuUn2MKdK...>
>
> *Posted by Rebecca Mead on the blog 2AM Theatre, May 24, 2010*
> Ah, Dynamic Pricing. The holy grail of entertainment earned revenue. Has
> worked for the airlines for YEARS. And yet we are still deeply afraid of
> it. Under this model, you advertise your lowest price with the phrase
> "Starts at $XX." Then you make sure the lowest advertised price requires
> [patrons] to buy early, come to the least popular performance night and sit
> in the very visible but not very good seats right up front on the side. If
> they want a better night, a better seat, or the chance to wait until the
> last minute, it will cost them more. And if you haven't advertised your
> additional prices in advance, you can adjust these numbers on the fly,
> experimenting until you find the right price breaks for this audience for
> this particular show. Yeah, but does it work? I was introduced to the idea
> at a conference. I brought it back for discussion at my current theater and
> our Marketing Director was game to try it. We omitted the price lists from
> our website. We worked with our IT staff to figure out how to build in
> stepped price increases into our ticketing system that could be activated
> when capacity hit certain key markers. We crossed our fingers, squeezed our
> eyes shut tight, covered our ears and pulled the switch. And to our
> amazement, our earned revenue and average ticket prices started to steadily
> climb, even as we were able to continue offering aggressive discounts to
> special groups and Facebook fans to reach our new audience and accessibility
> goals. All with nary a peep of complaint from our patrons -- even the ones
> who, in some cases, paid as much as $15 more per ticket than the original
> price.
>
> pricing*<http://r20.rs6.net/tn.jsp?et=1103434152485&s=3367&e=001qHzlYTuUn2OyS0...>
>
> *Posted by Goldstar's Jim McCarthy on his blog Live 2.0, May 24, 2010*
> Would you pay $1750 for a folding
> ? Before you say "no," imagine that it came with the ability to sit in it
Justin Karr
the floor the New York State Legislature: http://nyti.ms/dtkxg7
To those building a ticketing system, this kind of chatter is great,
because it gives us a perspective on all of the things people may want
to do. Whether or not dynamic pricing or premium pricing or brokering
are good things, that at least some producers (and patrons) want them
means that we need to plan for a system that can support them. That
governments feel that they should have some sort of say in how such
things happen means that we need to plan for a system that can support
that too.
I'd love to see all the cool and tricky problems you can throw at us
on this issue.
Consider: If you wanted to create a premium price, otherwise change a
price, or send some tickets out to a third party seller, who is
involved? Who comes up with the idea, who approves it, who actually
makes the change and who follows-up? How does input and confirmation
work? How are these changes audited? How do you prevent fraudulent
behavior on the part of actors? How do you make sure no one sets the
price to $1.00 instead of $100 by mistake?
Many thanks,
Justin
On Jun 6, 4:04 am, Tim Roberts ARTS Australia <art...@gmail.com>
wrote:
> "Rather than individual pricing, personalised discounting based on