#MondayMotivation: Interest Equals Action at the Right Price
Looking for a little #MondayMotivation? We’re pulling out past stories that are still just as relevant today. Here’s a pearl from Jim: Pricing Is Not a Marketing Campaign.
Everyone knows that pricing of tickets affects sales, and the main way this is usually observed is when prices drop, ticket sales go up.
What does this mean? Why does it work like this? Is it the equivalent of a word-of-mouth marketing campaign that gets people excited and talking about the tickets for sale?
Not really, at least not usually. The way price usually works is more like this: There’s a potential customer who’s aware of an event. Let’s call her Alex again. For this event, which happens to be Monkey Choir, she’s got an interest in the event, but that interest is only going to translate into action at the right price. This is always true, but we’re going to put her price preferences right out in the open to see how it works.
If you ask her for $100 for this show, she’s out. No sale. No real consideration. That’s just how she feels about Monkey Choir: It’s not that she’s not interested. It’s just that she’s not interested at that price.
At $75, it’s a likely no. She’d need some other influence to kick in, like maybe more information or a friend who keeps pestering her about seeing it together.
At $50, she’s a likely yes. She may not yet be determined to see the event, but that price lines up for her.
At $25, she’s a certain yes. Definitely buying.
Let’s say that you have 100 Alexes in your base and that at $75, only 25% buy. That’s 25 buyers at $75 or $1,875 in revenue. At $50, you get 75 buyers, but they’re worth less each. Still, the total is much more at $3,750. At $25, you get all of them, but at a really low price, so the revenue is $2,500.
In this example, the “likely no” price unsells tickets, and the “certain yes” price gives away money. This is how pricing works on a given audience, and your goal is to get to that correct optimal point.
But what does it do for anyone who doesn’t know about or care about the show? …
Read the rest of Jim’s post: Pricing Is Not a Marketing Campaign.
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