Selling Out Editors’ Picks for 2014: Pricing
Can you believe 2014 is almost over? The year has certainly flown by for us. To reflect back on it, we’ve pulled together some of our favorite posts on important topics for any live entertainment marketer. This week, we’re looking at pricing, that not-so-fun-but-necessary subject that can make or break an organization. See what Jim had to say about pricing in 2014 (click on any title to read more on the topic):
Variable Versus Dynamic Pricing
“We’re going to spend just a few minutes making sure we all understand the difference between dynamic pricing and variable pricing. If you’re a marketing professional in the live entertainment business, it’s not OK to use these interchangeably, and you really don’t want to be hanging with your colleagues at some fancy ticketing party or convocation and not know what they mean. So here goes …“
Ticket Buyers Don’t Care About Your Costs
“That sounds a little harsh, but it’s essentially true. When it comes time to evaluate what they are willing to pay to see your show, ticket buyers do not care what you are spending to create that show.
Cost is your problem. Price is theirs.
This is a confusing subject for people, and my goal here is to help more live entertainment and arts marketers face reality as it is on the subject of price and costs.“
Five Reasons to Set Prices Too Low
“Let’s talk for a minute about why someone might actually deliberately set ticket prices too low. I can think of five reasons that might — under just the right circumstances — make sense.”
The Perils of a Breakeven Price
“If you’re not careful about the way you evaluate the price at which you need to sell tickets in order to break even, you could be setting yourself up for some big losses.
Here’s how a ‘break-even’ price gets established a lot of the time: Somebody, somewhere takes the total cost of delivering a show and divides it by the number of tickets they believe, based on experience, intuition data or whatever, they will likely sell. … Is that correct?“
Sometimes People Prefer to Pay More
“If your mission (this mostly applies to non-profits) includes accessibility, how do you balance that with charging enough to make sure that you’re placing a value on the work and to fund the organization?
This kind of question is EXACTLY why you give a lot of thought to pricing. Sometimes people who are inclined toward the “mission” side don’t pay as much attention to pricing because they think that to do so puts them in the grubby category of trying to make money. Of course, the very bright people who came to my session saw right through this little trap that other, more experienced people sometimes fall into.
Here’s the answer: In order to achieve accessibility and also generate the value that the work is worth, you have to get more specific about who pays what.”
The Marketplace Is Speaking
“Pricing certainly can be complicated, and getting pricing just right is a hell of a puzzle. Avoiding getting it totally wrong, however, is not nearly as hard.
Let’s talk about the first reality of pricing: You, the supplier, don’t get to decide what people want to pay for your product. You get to set the price, but you don’t get to set the value. You may wish to sell your ticket for $X, but the customer decides whether or not it’s worth that price. If they don’t buy it when given the opportunity, the marketplace has told you something important that you need to pay attention to.
Namely, that your ticket is worth a different price from the one you thought.”
Stay tuned for the rest of the month as we cover topics like marketing, customers, and technology to wrap up 2014 and ring in the new year!
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