15 Thoughts on Pricing in ’15
Last week, I gave a presentation to my good friends at the Aspen Live conference in Aspen, Colo. (I know, it’s tough work, but someone’s got to go!). In it, I talked about the ways in which our experience at Goldstar can help our live entertainment partners think about pricing.
As I said to them, live entertainment marketing is a tough business. Pricing ain’t no cake walk, and I wouldn’t fancy my chances of doing better at pricing shows than many of you smart, experienced, talented marketers who know what your venue and genre and industry are all about.
On the other hand, from my vantage point here, I may see some things about pricing that you don’t see. Tiger’s coach can’t beat him on the golf course, but he can help Tiger be a better golfer.
So with that in mind, I’ve got 15 thoughts for you about how to be better at pricing in 2015 (or really any time). Ready? Let’s go:
1. Good pricing is free money. If you don’t change anything else and if you’re not already doing much to make your pricing optimal, I would expect to increase revenue by 15 to 20% with good pricing. Just like that.
2. Emotional pricing is like drunk dialing. It may feel like the right thing to do at the time, but you’ll be better off if you don’t. Not everything in marketing is about cool, calm, rationality, but pricing is.
3. Don’t argue with gravity. Ticket buyers in the marketplace will behave the way they want to behave, including how they see your event and how they feel about your price. Get comfortable with the reality that you’re not the boss of them and price (and market) accordingly.
4. You can’t tell a ticket buyer what a ticket is worth. Building on 3, don’t try to “explain” to the marketplace that a ticket to your event is worth way more than they’re willing to pay. It’s up to them to tell YOU what the ticket is worth, and it’s your job to adjust to that.
5. Discounts don’t sell tickets. Discounts sell insurance and gasoline because you need them and you don’t care much about which ones you get. But nobody NEEDS an event ticket. By far the easiest thing people can do is not go. First, the buyer has to be interested, and then, maybe, a discount makes a difference.
6. Tickets are worth different amounts to different people. I’ll prove it. Ask your co-worker if there’s a relatively unknown band they’re a fan of, and ask them what they’d pay to see them. Would you pay that amount? Probably not. Same band, same show, two different people, two very different prices. Once you understand this, you’re on your way to understanding how audiences really work.
7. People who really like you should WANT to pay you more. Discounting the deepest to your biggest fans and supporters? Wrong move. These people WANT to give you more and get more from you, and it takes some creativity to deliver that. Don’t go the other way! Everyone loses if you do.
8. Channels are the new advertising. Disappointed that traditional channels (including some traditional digital channels) don’t perform like they used to? It’s not getting any better. Channels, like Goldstar and others, are where the people are, and in fact, you should think of getting into good channels of distribution and use them much the way you once thought about advertising: the best way to reach a big new audience.
9. Most of the “cost” of a ticket is not money. Time, reputation, hassle, preparation, credibility, traffic, parking, babysitter, dressing up, getting less sleep, having to hurry home from work, figuring out which train to take to get to the venue, standing in line for a bathroom, drinking wine from a stupid sippy cup, and more are the “costs” people endure to go to your event. The dollars spent on a ticket could end up looking small by comparison.
10. Measure your sales right, and count the zeroes. If you’re looking at average ticket price and not counting the unsold seats as $0, you’re fooling yourself. Count those zeroes, and see where you really stand. If I sell one ticket for $1,000, my average ticket price is $1,000! Why don’t I just quit while I’m ahead? Because I count the zeroes and get a number that actually means something.
11. Math phobia is for losers. There’s a word in today’s economy for people who take perverse pride in saying, “I don’t do math,” or make a sour face when confronted with fourth grade math: broke. Not being able to understand or be comfortable understanding what’s going on in your business using multiplication, division, addition and subtraction is nothing to be proud of.
12. Forget big data. Just use regular-sized data. There’s really no need to get fancy with data. Don’t let it intimidate you. Data just means information. Take what you’ve got and really understand it. Make it part of your daily work. Play with it. Move it around. Think about it. No advanced math required 99.5% of the time.
13. Gross potential is a beauty contest where you’re both the contestant and the judge. In other words, it’s pretty meaningless. If I accidentally type a higher number in a price section and then correct it, my gross potential dropped — but what really changed? Nothing. If I decide I was right the first time, the gross potential goes up again. What changed? You guessed it.
14. There’s nothing precious about the first price you set. It’s called “trial and error” not “trial and always nail it the first time out because I’m a freakin’ genius.” Well, maybe some of you are, but the rest of us are human beings. Prices change because they’re complex and, wonder of wonders, the world changes, too. Don’t get hung up on a price just because it’s the first one you set.
15. Sell when, where and how people are buying. Don’t overthink it. When you find a way to help customers actually overcome the convenience gap and buy tickets to come to your event, use it to the max! As long as you’ve got a basic grasp of your pricing and it’s healthy, you’ll be fine. The worse mistake you could make is not selling those tickets, because it’s just too easy for people not to come at all.
I’ll explore some of these concepts with more extended posts in the new year, but hopefully, it’s holiday food for thought. Good luck in 2015!
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