Does Your Box Office Software Support Yield Management?

In previous posts, we discussed the advantages of ticketing systems that enable assigned seating and the associated pricing strategy of assigning different prices to different seats. Doing so drives substantially more revenue and serves your customers better.
Assigning different prices to different seats is just one dimension of what airlines and other industries like to call yield management – maximizing the number of filled seats at prices people are willing to pay.
There are other dimensions, for example:

Price by Seats
Age/Status Pricing
Time by Pricing

Scenario
Let’s use an example of a community theatre that has a venue with 1000 seats. Suppose the demand curve (how many people are willing to buy tickets at different price points) is the following:

Price
   $10
$15
$20
$25
$50

Demand
1,000
900
700
500
   0

 This demand curve is represented graphically below.

Pricing by Seats 
In the previous posts, we showed that box office software that allows you to assign different prices to different seats increases the overall revenue. The extra revenue is gained by providing better seats for more money to folks who want to pay for them and by allowing people who will only pay lower amounts still attend.
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Age/Status Pricing
Another way of maximizing seat yield is the practice of charging children, students or seniors a lower price.  A student may not be willing to pay $20, but may be willing to pay $15. Similarly, a parent may not want to take her young child to the event at the full price of $25 for the preferred seats, but may be willing to bring the child if the children’s ticket were $15.

In this case, we are setting different prices for any one seat. For example, this community theatre may decide to offer children tickets for $10 less than the adult tickets. This is a common way of driving revenue and giving customers what they want. Your box office software should be able to support this approach.

Time based Pricing
Although we may not call it that, some event organizers practice time based pricing.  For example, giving a discount to early buyers has the advantages of capturing those ticket buyers who wish to pay less but are willing to buy early.

Similarly, providing last minute discounts is a form of maximizing yield through time-based pricing. Suppose the community theatre expected the demand curve shown above, but it turns out that demand is actually less than expected. Here’s where last minute deals such as half-price tickets make sense.Again, we are increasing revenue at the same time as delighting customers. The people who bought last minute at the reduced rate are delighted to be able to go. Meanwhile, the people who paid full price were happy to do so in order to secure their tickets. Your box office software must have the ability to administer these types of discounts.

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