IAVM’s Performing Arts Managers will meet in Las Vegas for the annual
Performing Arts
Management Conference on February 9-12, 2013. One of the sessions we are looking forward
to will discuss Dynamic Ticket Pricing. Steven Roth, President at The Pricing Institute, will lead
the session. We spoke to him to find out what we can look forward to during his presentation.
Here is a short summary of our discussion.
Mr. Roth, how many venues do you see today that are using dynamic ticket pricing?
Many venues and cultural organizations are familiar with revenue management, and more and
more organizations are beginning to understand the benefits of dynamic pricing. It’s not just
about increasing your ticket prices it’s about discounting and raising ticket prices strategically.
There is a right way to scale your house, and organizations that do this well have a few things in
common. They collaborate internally with their marketing and ticketing departments and
externally with their producers and presenters. By developing a strong communication plan
these venues are much more successful.
And the communication doesn’t end at the venue’s doors. Everyone needs to understand the
value – including the customer. The language you use to describe pricing makes a difference.
Using statements like, “Tickets starting at” or “Prices subject to change” can help prepare a
customer. Overall it’s about how you market the ticket. You need to emphasize the value of the
product versus the price of the ticket. That’s where the science and the art of selling come
together.
It’s important to gather data to understand your patron’s buying habits so you can see things
like the fact that, with a particular performer, buyers wait until the last week before they buy
tickets. With this knowledge venues are able to adjust ticket pricing to maximize revenue. Some
organizations rescale their house all together, increasing pricing for a Saturday night vs. a
Tuesday performance. You don’t have to be selling out the house to take advantage of dynamic
pricing. For instance, you may analyze your sales and find particular sections of the house that
sell well. Venues can scale tickets in that particular section and leave other sections alone.
Mr. Roth was also quick to warn that dynamic pricing is not an exact science, you can look at
the data to set your prices, but it’s also ok to make adjustments as you move along. Without giving too much away, is there any new research on the horizon that excites you?
The newest direction of research is Behavioral Economics. The data we are gathering on
consumer behavior and irrational consumer behavior will be things I see gathering momentum
as we learn more about dynamic pricing. How consumers respond to a pricing increase from
$80 to $100 is more negative than the same $20 increase when a ticket goes from $30 to $50.
These are the interesting things to begin looking at when we consider dynamic pricing.
Register now to attend valuable sessions like Dynamic Pricing at PAMC 2013.